S. 5431-B(Seward)/A. 8831-A(Weprin)

Fraternal Benefit Society Modernization

Summary:  The bill amends the Insurance Law to provide fraternal benefit societies with the same opportunities to engage in investment practices that are currently provided to life insurance companies, and to give the Superintendent authority to ensure fraternal benefit societies remain solvent.  Specifically:

• The Superintendent is provided the authority to mandate that all fraternal benefit societies maintain a surplus.

• The Superintendent is provided the authority to require fraternal benefit societies to submit records describing each society's communal activities and take other actions that the Superintendent deems appropriate in his efforts to oversee the society's investment activities.

• The Superintendent is provided enhanced authority to ensure that fraternal benefit societies that wish to engage in certain investments in New York, remain solvent.

• The provisions of Insurance Law § 1105, pertaining to insurance companies authorized in New York voluntarily ceasing to maintain a license in New York, is made applicable to fraternal benefit societies.

• Certain fraternal benefit societies are permitted to engage in the same investment practices that life insurance companies may engage in pursuant to sections 1402, 1403, 1405, 1406, 1410, 4240, and Article 17 of the Insurance Law.

Effective Date:  Immediately.

Last Action: Approved and signed by the Governor on March 4, 2008 (Chapter 22 of the Laws of 2008).