Current through Register Vol. 46, No. 39, September 25, 2024
(a) Underwriting members shall be subject to
the provisions of all sections of article IV of the Insurance Law, except as
follows:
(1)
(i) subdivisions 1-4 of section 40;
(ii) subdivision 5 of section 40, except that
whenever the superintendent shall determine, after notice and hearing, that any
underwriting member is doing business in a manner detrimental to the people of
this State, or its further conduct of business may jeopardize the interests of
other members, associate brokers or policyholders or has failed or refused to
take such steps as may be necessary to remove from office any officer or
director of such underwriting member whom the superintendent has found, after
notice and hearing, to be a dishonest or untrustworthy person, he may remove,
with respect to such underwriting member, any exemptions granted in this
Subpart and proceed according to article XVI of the Insurance Law; the
superintendent shall furnish the exchange with a copy of any notice issued
pursuant to this subparagraph;
(iii) subdivisions 6 and 7 of section 40;
or
(iv) subdivision 9 of section
40, except that no entity which is controlled through stock ownership, by
management contract or otherwise, by another state of the United States or by a
foreign government or by any political subdivision of either, or which is an
agency of any such state, government or subdivision, may become an underwriting
member of the exchange without the prior approval of the superintendent;
provided, however, that no underwriting member which was not so controlled at
the time it was admitted as an underwriting member of the exchange, and which
thereafter becomes so controlled, may continue as an underwriting member of the
exchange unless it has received the prior approval of the
superintendent.
(2)
section 42;
(3) section 43, except
that no individual underwriting member shall be permitted to do business in the
exchange under a corporate or fictitious name or under any name, style or title
other than the true name of such individual;
(4) sections 44; 44-a; 45;
(5) section 48, provided that if the
applicant for underwriting membership is a corporation the following conditions
are met:
(i) that this exemption is for the
limited purpose of permitting formation of a corporation under section 402 of
the New York Business Corporation Law or for the limited purpose of granting a
foreign corporation authority to do business in this State under section 1304
of said law;
(ii) that the
corporate name of such corporation shall not include the word exchange,
reinsurance or any word prohibited by section 301(a)(5) of the New York State
Corporation Law;
(iii) that this
exemption neither authorizes nor licenses said corporation to transact an
insurance business in this State, except to participate as or to be a
participant in an underwriting member of the exchange;
(iv) that this exemption shall terminate
simultaneously with the termination of the authority granted to the corporate
underwriting syndicate pursuant to the constitution; and
(v) that upon termination of the underwriting
member's authority granted pursuant to the constitution, the certificate of
incorporation of the member shall be amended to delete the corporate purpose to
participate as an underwriting member of the exchange;
(6) sections 48-a; 49; 51; 52; 53; 53-a;
section 59, provided that each underwriting member designates the exchange as
its lawful agent for receipt of service upon any such underwriting member;
sections 59-a; 62-a; 63; 64; and 66.
(b) An underwriting member of the exchange
shall be exempt from the capital and surplus requirements of the Insurance Law
and shall be subject to the capital and surplus requirements of section 6,
article VII of the constitution.
(c) The capital and surplus amounts required
for approval by the board to be an underwriting member shall consist of United
States currency, securities of the types described under paragraph (a), (b) or
(c) of section 79 of the Insurance Law (valued at market at the time deposited)
or a letter of credit or a surety bond, equal in the aggregate to such required
amounts. Such currency, securities or letter of credit shall be on deposit in
accordance with rules and regulations adopted by the board. No underwriting
member shall transact any business on the exchange until the amount of capital
and surplus required pursuant to the constitution is on deposit for the account
of the underwriting member with a solvent financial institution which is either
a member of the Federal Reserve System or a bank licensed by the New York State
Banking Department, in United States currency or in securities permitted under
paragraphs (a), (b) and (c) of section 79 of the Insurance Law. The provisions
of this subdivision shall not be applicable to the initial deposit required
pursuant to section 4, article XIII of the constitution.
