New York Legislation Would Impose Group Capital Calculation Requirement

Parent companies of insurers doing business in New York would be required to file a "group capital calculation," or GCC, with the Superintendent of Financial Services under legislation introduced in the state Senate on May 3, 2022. The GCC requirement, which parallels efforts by the National Association of Insurance Commissioners (NAIC) across the states, would for the first time require a New York insurer to quantify needed and available capital at its group, rather than individual legal entity, level. The bill was assigned to the Senate floor calendar on May 9, 2022.

GCC has been a controversial topic since its introduction at the NAIC a few years ago, with carriers expressing concern that what started as a regulatory tool would morph into a hard requirement with regulatory teeth, i.e., penalties for perceived capital deficiencies. When the GCC and related liquidity stress test framework was added to the NAIC's Insurance Holding Company System Regulatory Act