S T A T E O F N E W Y O R K
________________________________________________________________________
3967--B
2011-2012 Regular Sessions
I N A S S E M B L Y
January 31, 2011
___________
Introduced by M. of A. MORELLE, P. RIVERA -- read once and referred to
the Committee on Insurance -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee --
again reported from said committee with amendments, ordered reprinted
as amended and recommitted to said committee
AN ACT to amend the insurance law, in relation to exempting large
commercial insureds from certain rate and policy form requirements
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Subsections (a) and (b) of section 6301 of the insurance
2 law are amended to read as follows:
3 (a) Notwithstanding any provision of this chapter, the superintendent
4 shall, pursuant to regulations promulgated by [him] THE SUPERINTENDENT,
5 permit exemption from filing requirements only with respect to rates and
6 policy forms, where applicable, for any of the kinds of insurance
7 [authorized to be written in this state] SPECIFIED IN SUBSECTION (B) OF
8 THIS SECTION.
9 (b) [No] AN exemption pursuant to subsection (a) [hereof] OF THIS
10 SECTION shall be permitted in relation to the kinds of insurance set
11 forth in [paragraph one, two, three, fifteen, eighteen or twenty-three]
12 PARAGRAPHS FOUR THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH
13 TWENTY-TWO, TWENTY-SEVEN AND TWENTY-NINE of subsection (a) of section
14 one thousand one hundred thirteen of this chapter[, or to] AND SUCH
15 INSURANCE AS THE SUPERINTENDENT DEEMS TO BE SUBSTANTIALLY SIMILAR TO ONE
16 OF THE FOREGOING KINDS, EXCEPT NO EXEMPTION MAY BE PERMITTED FOR: (1)
17 coverage for personal lines to natural persons for non-business
18 purposes; (2) INSURANCE SPECIFIED IN SUBSECTION (B) OF SECTION TWO THOU-
19 SAND THREE HUNDRED FIVE OR SECTION TWO THOUSAND THREE HUNDRED
20 TWENTY-EIGHT OF THIS CHAPTER; (3) INSURANCE REQUIRED TO SATISFY ANY
21 FINANCIAL RESPONSIBILITY REQUIREMENT OF THIS STATE; OR (4) A POLICY
22 WRITTEN ON A GROUP BASIS. However, any risk pursuant to paragraph one,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05245-04-1
A. 3967--B 2
1 two or three of [such] subsection (A) of [such] section ONE THOUSAND ONE
2 HUNDRED THIRTEEN of this chapter, MEDICAL MALPRACTICE INSURANCE (EXCEPT
3 FOR PHYSICIANS AND SURGEONS), or personal lines risk (except private
4 passenger, non-fleet automobile insurance) shall be exempt pursuant to
5 subsection (a) [hereof] OF THIS SECTION if it is included by the super-
6 intendent on the list maintained by [him] THE SUPERINTENDENT pursuant to
7 subsection (a) of section six thousand three hundred three of this arti-
8 cle.
9 S 2. Section 6302 of the insurance law, paragraph 3 of subsection (c)
10 as amended by chapter 534 of the laws of 1985, is amended to read as
11 follows:
12 S 6302. Special license. (a) An authorized insurer, as a condition
13 precedent to the obtaining of such exemption, shall obtain a special
14 license from the superintendent.
15 (b) Before such special license shall be issued or renewed the
16 prospective licensee shall file in the office of the superintendent an
17 application in such form and supplements thereto as the superintendent
18 prescribes. Such license shall be subject to annual renewal with an
19 annual fee of [one] TWO thousand dollars.
20 (c) Such license may only be issued to:
21 (1) an authorized insurer [which] THAT maintains at all times a
22 surplus to policyholders of at least [twice the minimum surplus to poli-
23 cyholders required to be maintained for the kinds of insurance which it
24 is authorized to write in this state] THE AUTHORIZED CONTROL LEVEL AS
25 SET FORTH IN ARTICLE THIRTEEN OF THIS CHAPTER;
26 (2) a United States branch which maintains at all times a trusteed
27 surplus of at least [twice the minimum trusteed surplus required to be
28 maintained for the kinds of insurance which it is authorized to write in
29 this state] THE AUTHORIZED CONTROL LEVEL AS SET FORTH IN ARTICLE THIR-
30 TEEN OF THIS CHAPTER; or
31 (3) an insurer initially licensed on or after July first, nineteen
32 hundred eighty-two pursuant to article forty-one of this chapter, or
33 pursuant to article forty-two of this chapter as an accident and health
34 insurer, or pursuant to article sixty-one of this chapter as a recipro-
35 cal insurer, if such insurer is at least meeting the minimum surplus to
36 policyholders requirement or the minimum trusteed surplus requirement
37 imposed upon such insurer by the provisions of the article pursuant to
38 which it was initially licensed.
39 (d) The superintendent may revoke, suspend, or refuse to renew such
40 license if, after notice and a hearing, [he] THE SUPERINTENDENT finds
41 that such action will protect the best interests of the people of this
42 state.
43 S 3. Section 6303 of the insurance law is amended to read as follows:
44 S 6303. Limitations. (a) The exemption [which] THAT may be granted
45 pursuant to this article shall apply only if the business is underwrit-
46 ten and transacted from an office within this state; and [(i)]:
47 (1) the risk, as defined in regulations of the superintendent, produc-
48 es a minimum annual premium in excess of one hundred thousand dollars or
49 such higher amount as the superintendent may prescribe by regulation;
50 [or (ii)]
51 (2) the coverage is for a risk or class of risks which is of an unusu-
52 al nature, a high loss hazard, or difficult to place, pursuant to a list
53 promulgated or amended by the superintendent; OR
54 (3) THE POLICY IS ISSUED TO A LARGE COMMERCIAL INSURED THAT EMPLOYS OR
55 RETAINS A RISK MANAGER TO ASSIST IN THE NEGOTIATION AND PURCHASE OF A
56 POLICY EXEMPTED UNDER THIS ARTICLE.
A. 3967--B 3
1 (b) [All policies] FOR THE PURPOSES OF THIS SECTION:
2 (1) "LARGE COMMERCIAL INSURED" MEANS AN ENTITY THAT GENERATES ANNUAL
3 COMMERCIAL RISK INSURANCE PREMIUM IN EXCESS OF TWENTY-FIVE THOUSAND
4 DOLLARS WITH RESPECT TO THE KINDS OF INSURANCE SPECIFIED IN PARAGRAPHS
5 FOUR THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH TWENTY-TWO
6 AND TWENTY-SEVEN OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED
7 THIRTEEN OF THIS CHAPTER AND:
8 (I) HAS A NET WORTH OF AT LEAST SEVEN MILLION FIVE HUNDRED THOUSAND
9 DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE
10 POLICY'S EFFECTIVE DATE;
11 (II) HAS GROSS ASSETS EXCEEDING TEN MILLION DOLLARS AND A NET WORTH OF
12 AT LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S
13 FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
14 (III) IS A FOR-PROFIT BUSINESS ENTITY THAT GENERATES ANNUAL GROSS
15 REVENUES EXCEEDING FIFTEEN MILLION DOLLARS, AND HAS A NET WORTH OF AT
16 LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S
17 FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
18 (IV) IS A FOR-PROFIT BUSINESS ENTITY THAT HAS GROSS ASSETS EXCEEDING
19 TEN MILLION DOLLARS AND GENERATES ANNUAL GROSS REVENUES EXCEEDING
20 FIFTEEN MILLION DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY
21 PRECEDING THE POLICY'S EFFECTIVE DATE;
22 (V) IS A NOT-FOR-PROFIT ORGANIZATION OR PUBLIC ENTITY WITH AN ANNUAL
23 BUDGET EXCEEDING TWENTY MILLION DOLLARS FOR EACH OF ITS THREE FISCAL
24 YEARS IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
25 (VI) HAS FIFTY EMPLOYEES OR, TOGETHER WITH ITS PARENT, SUBSIDIARIES
26 AND AFFILIATES, ONE HUNDRED EMPLOYEES, AS OF THE INSURED'S FISCAL YEAR
27 END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; OR
28 (VII) IS A MUNICIPALITY WITH A POPULATION OF FIFTY THOUSAND OR MORE
29 PERSONS.
30 (2) "RISK MANAGER" MEANS AN INDIVIDUAL WHO HOLDS THE PROFESSIONAL
31 DESIGNATION OF CPCU, ARM, OR CRM WITH AT LEAST FIVE YEARS EXPERIENCE IN
32 THE ANALYSIS AND TREATMENT OF RISK, LOSS EXPOSURE, INSURANCE COVERAGES,
33 AND ALTERNATIVE METHODS AND PROGRAMS, WHO IS NOT EMPLOYED BY THE INSURER
34 ISSUING THE POLICY OR ANY PERSON IN THE INSURER'S HOLDING COMPANY
35 SYSTEM, AND WHO IS LICENSED AS AN INSURANCE PRODUCER PURSUANT TO ARTICLE
36 TWENTY-ONE OF THIS CHAPTER, UNLESS EXEMPTED FROM LICENSING THEREIN.
37 (3) "MUNICIPALITY" SHALL MEAN ANY COUNTY, CITY, TOWN OR VILLAGE.
38 (C) EFFECTIVE ON THE FIFTH JANUARY FIRST OCCURRING AFTER THE DATE OF
39 THE ENACTMENT OF THIS SUBSECTION AND EACH FIFTH JANUARY FIRST OCCURRING
40 THEREAFTER, THE AMOUNTS SPECIFIED IN PARAGRAPH ONE OF SUBSECTION (B) OF
41 THIS SECTION MAY BE ADJUSTED TO REFLECT THE PERCENTAGE CHANGE FOR SUCH
42 FIVE-YEAR PERIOD IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS
43 PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE DEPARTMENT OF LABOR.
44 THE SUPERINTENDENT MAY CONDUCT A PUBLIC HEARING TO DETERMINE WHETHER
45 SUCH INCREASE IS NECESSARY.
46 (D) EVERY POLICY issued pursuant to the provisions of this article
47 shall contain a notice to the policyholder that the rate and policy form
48 are not subject to the filing requirements of this state and such other
49 notices required by the superintendent pursuant to regulation.
50 [(c)] (E) The superintendent may by regulation prescribe limitations
51 on the total amount of business [which] THAT an insurer may transact
52 pursuant to this article OR REIMPOSE FILING REQUIREMENTS WHERE AND TO
53 THE EXTENT THAT THE SUPERINTENDENT DEEMS IT IN THE INTEREST OF THE POLI-
54 CYHOLDERS.
55 S 4. Subsection (b) of section 2307 of the insurance law, as amended
56 by chapter 508 of the laws of 1998, is amended to read as follows:
A. 3967--B 4
1 (b) (1) Except as otherwise provided herein, no policy form shall be
2 delivered or issued for delivery unless it has been filed with the
3 superintendent and either [he] THE SUPERINTENDENT has approved it, or
4 thirty days have elapsed and [he] THE SUPERINTENDENT has not disapproved
5 it as misleading or violative of public policy.
6 (2) After notice and hearing to the insurer or rate service organiza-
7 tion which submitted a policy form for approval, the superintendent may
8 withdraw approval of such form on finding that the use of such form is
9 contrary to the legal requirements applicable at the time of withdrawal.
10 The effective date of the withdrawal of approval shall be prescribed by
11 the superintendent but shall be not less than ninety days after notice
12 of withdrawal.
13 (3) With regard to residual value insurance, policy forms and any
14 amendments thereto shall be filed with the superintendent within thirty
15 days of their use by the insurer. For purposes of this subsection,
16 "residual value insurance" shall have the same meaning as set forth in
17 paragraph twenty-two of subsection (a) of section one thousand one
18 hundred thirteen of this chapter, provided however, for the purposes of
19 this subsection such insurance shall only be utilized for commercial
20 purposes, and shall not include personal lines of insurance as defined
21 in paragraph two of subsection (a) of section three thousand four
22 hundred twenty-five of this chapter or any commercial auto insurance,
23 and, provided further that applicants for such insurance shall sign a
24 statement that the applicant has an appropriate level of knowledge and
25 understanding of the use of residual value insurance.
26 (4) POLICY FORMS FOR INLAND MARINE RISKS WHERE THE RATES FOR SUCH
27 RISKS BY GENERAL CUSTOM OF THE BUSINESS ARE NOT WRITTEN ACCORDING TO
28 MANUAL RATES OR RATING PLANS SHALL NOT BE FILED PURSUANT TO PARAGRAPH
29 ONE OF THIS SUBSECTION, UNLESS THE SUPERINTENDENT DIRECTS THAT THEY BE
30 FILED.
31 S 5. This act shall take effect immediately.