NYDFS Amends Insurance Regulation Related to the Group Capital Calculation Filing Requirement

The National Association of Insurance Commissioners’ (“NAIC”) group capital calculation (“GCC”) was enacted into law in New York pursuant to amendments to New York’s insurance holding company laws, effective as of August 23, 2023 (as amended, “NY’s Holding Company Laws”). These laws require an ultimate holding company to submit an annual GCC to the New York State Department of Financial Services (“NYDFS”) when New York is the group’s lead state regulator. Under NY’s Holding Company Laws, the GCC filing obligation is subject to general exemptions that are consistent with those set forth in the NAIC’s Insurance Holding Company System Regulatory Act (the “Holding Company Act”), as amended in 2020.

NY’s Holding Company Laws also provide that the Superintendent of Financial Services (the “Superintendent”) has the discretion, when New York is the lead state, to exempt a holding company from filing an annual GCC or accept a limited group capital filing in accordance with criteria as specified by the Superintendent in a regulation. The NYDFS recently adopted the Third Amendment to Insurance Regulation 203 (Enterprise Risk Management and Own Risk and Solvency Assessment; Group-wide Supervision) (the “Third Amendment to Regulation 203”) to establish the criteria for the additional GCC filing exemptions. Similar to above, the changes to Regulation 203 are consistent with the provisions set forth in the NAIC’s holding company amendments from 2020. The NYDFS did not receive any comments on the proposed draft of the Third Amendment to Regulation 203, and it became effective immediately upon publication on June 18, 2024.

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