Financial Stability and the Department of Financial Services
One of the New York State Department of Financial Services’ primary functions is overseeing the financial stability of insurance companies. A company’s financial stability helps to assure the consumer that the company will be there to pay claims in the future. Few company failures have occurred in the past, and the Department remains confident that the statutory and regulatory framework currently in place will continue to afford the consumer the greatest protection and the least disruption to their coverage. When necessary, the Department will work with an insurer to take all reasonably feasible actions to rehabilitate its financial situation, including supervision of the reinsurance or sale of one or more blocks of business.
To date, New York has not experienced a company’s financial failure involving long term care insurance. Several published opinions by the Department have concluded that the Life Insurance Company Guaranty Corporation is applicable to long term care insurance policies issued by life insurance companies authorized to transact accident and health insurance in New York. Under this guaranty fund, life insurance companies that are members meet their obligations to the guaranty fund by offering coverage to those individuals who lose coverage under the insolvent firm. The coverage may or may not be the same as the prior coverage. This fund applies only to insurers organized as life insurance companies.