Section 7501. Purpose of article. 7502. Definitions. 7503. The Life Insurance Guaranty Corporation. 7504. The guaranty fund. 7505. Taxes. 7506. Companies excluded from article. 7507. Authorization for member companies. S 7501. Purpose of article. The purpose of this article is to continue the life insurance guaranty fund, a fund arising from assessments upon domestic life insurance companies to be used for the promotion of the stability of such companies and the performance of their contractual obligations. In the judgment of the legislature, the foregoing objects and purposes are not capable of accomplishment by a corporation created under general laws, so the continuation of the non-profit corporation, "The Life Insurance Guaranty Corporation", is provided by this article. S 7502. Definitions. In this article: (a) "Board" means the board of directors of The Life Insurance Guaranty Corporation. (b) "Assessment" means a payment made by a company into the guaranty fund. (c) "Contributor" means a company paying an assessment. (d) "Corporation" means "The Life Insurance Guaranty Corporation." (e) "Fund" means the guaranty fund provided by this article. (f) "Member company" means any domestic life insurance company having a representative serving as a director upon the board of directors of the corporation. (g) "Policies" means insurance policies; "contracts" means annuity contracts; both terms include policies or contracts of reinsurance issued by a member company. S 7503. The Life Insurance Guaranty Corporation. (a) The non-profit body corporate known as "The Life Insurance Guaranty Corporation" created pursuant to chapter four hundred eighty-one of the laws of nineteen hundred forty-one, is hereby continued. It shall be composed of the superintendent ex-officio and one representative of each life insurance company incorporated or organized under any law of this state which shall have actively and continuously transacted business in this state for a period of at least three years prior to the effective date of article seventy-seven of this chapter. No company shall be eligible for membership in the corporation if a proceeding instituted by the superintendent pursuant to article seventy-four of this chapter is pending against it in which event such company shall not be eligible until the superintendent shall certify that it is so eligible. (b) Every such company which shall become eligible for membership in the corporation shall, within forty-five days from the date on which it becomes so eligible, file with the superintendent a certificate designating its representative for the purposes of such corporation. Upon failure of any company to make such designation within the forty-five day period, the superintendent shall forthwith make such designation for and on its behalf and by mail give notice thereof to such company. The designation, whether made by the company or the superintendent, may be revoked by the company at any time with or without cause. Any vacancy by death, resignation or removal shall be filled in the same manner as for the original designation of a representative. (c) Each such representative shall also be known as a director and all representatives and the superintendent shall constitute the board of directors which shall have complete charge and control of the management of the corporation in accordance with the corporate powers hereinafter set forth, including power to adopt administrative rules, regulations and by-laws advisable for the purposes and objects of the corporation. The superintendent shall be ex-officio chairman of the board. (d) No director, officer, agent or other representative of the corporation shall be individually liable to any person, firm or corporation, including the corporation, for any act or omission to act, or for any liability incurred or assumed, on behalf of the corporation or by virtue hereof. Any such liability so incurred or assumed shall be collectible only out of the fund; nor shall any member company be subject to any liability except for assessment as herein provided. (e) The corporation shall be under the immediate supervision of the superintendent and shall be subject to such provisions of this chapter as the superintendent shall deem applicable. (f) The corporation shall have the power: (1) To use a corporate seal, to contract, to sue and be sued and to possess and exercise all powers necessary or convenient for the purposes of this article. (2) With the approval of the superintendent, to assume, reinsure or guaranty, or cause to be assumed, reinsured or guaranteed, partially or wholly, any or all policies or contracts of any member company and to make available from the fund such sums as may be necessary for such purposes. (3) To carry out the provisions of this article, the corporation shall have and may exercise all necessary rights, powers, privileges and franchises of a domestic life insurance company except that it shall not be authorized to issue contracts or policies unless they replace contracts or policies representing obligations in whole or in part of another domestic life insurance company or of the corporation. (4) To borrow money for the purposes of the fund with or without security and pledge such assets in the fund as security for such loans and in connection therewith to rehypothecate any securities or collateral pledged to it by a company. Obligations of the corporation shall be legal investments for domestic life insurance companies and to the extent authorized by the superintendent may be carried as admitted assets. (5) To collect, or enforce by legal proceedings, if necessary, the payment of, all assessments for which any contributor may be liable under this article; to collect any obligation due to the corporation or to the fund.
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S 7504. The guaranty fund. (a) The corporation shall provide a guaranty fund from which all corporate administrative costs may be paid as well as such payments and advances as may be made in connection with any assumption, reinsurance or guaranty agreement. Such fund shall be raised by assessments which may be made from time to time by the corporation upon all member companies in proportion to their admitted assets as shown by their annual statements required by this chapter for the year next preceding the date of such assessment. The net realized gains and income from investments of the fund shall belong, and be refunded, to the contributors in proportion to the amounts contributed by them. The corporation may provide by resolution or by-law the necessary procedure for making assessments, the payment thereof, and the refund of any net realized gains and income from investments of the fund. (b) The amount of the fund shall be kept at such a sum as will enable the corporation to meet its immediate obligations and liabilities. (c) Upon payment of assessments the corporation shall issue to the contributors certificates showing the dates and amounts of such payments, and any other matters deemed proper. All outstanding certificates shall be of equal dignity and priority irrespective of amounts or dates of issue. Such certificates may be carried by member companies as admitted assets to the extent authorized by the superintendent. (d) Whenever the amount of the fund exceeds the immediate requirements of the corporation, with the approval of the superintendent, the corporation may distribute such excess by retirement of the aforesaid certificates previously issued or any part thereof. Such distribution shall be made pro rata upon the basis of outstanding certificates, except that by unanimous consent of all the directors and with the approval of the superintendent any other method of retirement of the certificates may be adopted. (e) Upon dissolution of the fund by the repeal of this article or otherwise, the fund shall be distributed in the manner provided for the repayment or retirement of certificates. If the amount of the fund at the time of dissolution exceeds the outstanding certificates, the excess shall be paid in such equitable manner as shall be approved by the superintendent. (f) The aggregate of the outstanding certificates shall at no time exceed fifty million dollars. S 7505. Taxes. (a) The corporation shall be exempt from all taxes and fees imposed by this state or by any county, municipality, or local authority or subdivision, except that real property owned by the corporation shall be subject to county, municipal or local authority or subdivision taxation to the same extent, according to its value, as other similar real property. (b) Any company whose policies have been assumed, reinsured or guaranteed by the corporation shall remain liable for the taxes required by article thirty-three of the tax law, and shall remain liable as to taxes accrued before January first, nineteen hundred seventy-four, which were required by section one hundred eighty-seven of the tax law as in effect before January first, nineteen hundred seventy-four, on all premiums received on policies issued by it, but payment of such taxes shall be suspended. Payment of or on account of such taxes shall be made under such terms and conditions as the superintendent prescribes, except that no such payment may be required or made if such company would become impaired by the making of such payment or if such payment would reduce its capital and surplus below the minimum statutory requirements for organization of a like new life insurance company. No dividends to shareholders shall be declared unless all premium taxes have been fully paid. S 7506. Companies excluded from article. There is hereby excluded from the provisions of this article any life insurance company organized and operated, without profit to any private shareholder or individual, exclusively to aid and strengthen charitable, religious, missionary, educational or philanthropic institutions by issuing policies or contracts only to or for the benefit of such institutions, to individuals engaged in serving such institutions and to members of their immediate families. S 7507. Authorization for member companies. Each member company and its officers, directors and agents shall have authority to do and permit to be done any act and to make any payment herein authorized or
