The Business Council SUPPORTS this legislation that would amend §1201(a)(3) of the insurance law to remove the requirement that the proposed incorporators of a New York insurance corporation must publish in a newspaper their residence address and require, instead, that they need only publish their city and state of residence. Section 1201 (a) (5) (B) (v), (vi) & (vii) of the insurance law would be amended to: reduce the minimum size of the Board of Directors for insurance corporations in New York to seven; to reduce the New York State residency requirement for insurance corporations in New York to one director; and to require that only the city and state of residence of the incorporators of an insurance corporation must be contained in the corporate charter. This bill would also amend §1202(a)(2) of the insurance law to make consistent the reduced minimum board size of seven and clarify the rules for increasing or decreasing the number of board members on insurance corporations in New York. Lastly, §1209(b) &(c) of the insurance law is being amended to authorize a minimum board size of seven for mutual insurance corporations in New York and to reduce the requisite number of principal officers required for such corporations from the current two to one.
Currently, incorporators of a new insurance company in New York must publicize their home addresses resulting in an unnecessary invasion of privacy. This legislation would help to protect individuals' privacy by amending the insurance law to require only the publication of city and state residence information and the company charter.
This legislation modernizes requirements for a minimum board size from thirteen to seven; reduces New York State residency requirements to one director; and requires that only the city and state of residence of the incorporators of an insurance corporation must be contained in the corporate charter.
Most other states have established their minimum board size at a lower level than required in New York State. The average board size in corporate America is approximately ten. Furthermore, given the increased demands pursuant to Sarbanes-Oxley Act, lowering the required board size would enable insurance corporations to identify and select the most qualified individuals.
Similarly, this bill changes the requirement that the minimum board size for insurance corporations in New York must be thirteen or nine to meet a specific “small company” threshold and clarifies rules for increasing or decreasing board members.
Lastly, this legislation authorizes a minimum board size of seven for mutual insurance corporations and reduces the requisite number of principal officers required from two to one.
Accordingly, The Business Council supports A.1005.C (Bing)/S.3635-B (Breslin).