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.