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New York, May 4, 1999

LEVIN CITES MORE THAN 250 INSURERS FOR FAILING TO FULLY COMPLY WITH STATE’S Y2K DISCLOSURE REQUIREMENTS

Department Warns Companies That Failure to Comply Will Result in Regulatory Action

Superintendent of Insurance Neil D. Levin today cited more than 250 companies for failing to comply with the state’s Y2K disclosure requirements, warning that failing to provide full and fair disclosure will result in regulatory action. Companies were required to submit to the Department by April 1, 1999 Y2K readiness information as part of the supplement to their annual financial statements.

"We are warning companies that failing to provide full and fair Y2K disclosure is unacceptable and that failure to refile the necessary information in a timely manner will result in regulatory action," said Levin. "Consumers have a right to know about the status of their insurer’s preparations for the Year 2000 and how they might be impacted. We have spent two years working with companies to ensure Y2K compliance, and now the last step in this process is for the companies to fully disclose this vital information to the public."

For the first time, insurers without publicly traded securities will be required, in accordance with Securities and Exchange Commission guidelines, to disclose their state of readiness, a description of their costs to address Y2K issues, the risks associated with their Y2K issues, and their contingency plans. By requiring mutual insurers and other nonpublic companies to disclose this information, policyholders will now be able to review the companies’ Y2K plans. In total, the Department has sent warnings to 152 Property insurers, 93 Life insurers, and 21 Health insurers.

The Department was recently commended by Congress for leading the charge in its effort to ensure that all insurance companies doing business in the State have Y2K readiness plans in place. In a letter written to the General Accounting Office regarding its Y2K report, Representative John D. Dingell (D-Michigan), the ranking member of the U.S. House of Representatives Committee on Commerce, states that New York has taken a strong and wide ranging approach in the Y2K compliance area. He commended the Department's surveys, quarterly reports and targeted exams that treat both New York domiciled companies and nondomiciled companies the same on this issue.

Highlights of the Department's Y2K compliance initiatives include:

  • Requiring insurers to have a written plan and budget to assure computer systems are Y2K compliant;
  • Requesting that a senior officer of the company providing an ongoing status of all Y2K initiatives sign all quarterly surveys to the Department. These quarterly status updates provide ongoing reports on all Y2K initiatives by addressing budgets, vendor status, contingency plans and communications to policyholders, shareholder and customers;
  • Performing on-site targeted Y2K examinations of the companies;
  • Requiring company CEOs to submit signed certifications to the Department once all systems are determined to be in compliance;
  • Convening a monthly internal Y2K task force to review industry status chaired by the Executive Bureau; and
  • Creating a Y2K section on its website.

 

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