S T A T E O F N E W Y O R K
________________________________________________________________________
3967
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
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 shall be
10 permitted in relation to the kinds of insurance set forth in [paragraph
11 one, two, three, fifteen, eighteen or twenty-three] PARAGRAPHS FOUR
12 THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH TWENTY-TWO, TWEN-
13 TY-SEVEN AND TWENTY-NINE, of subsection (a) of section one thousand one
14 hundred thirteen of this chapter[, or to] AND SUCH INSURANCE AS THE
15 SUPERINTENDENT DEEMS TO BE SUBSTANTIALLY SIMILAR TO ONE OF THE FOREGOING
16 KINDS, EXCEPT NO EXEMPTION MAY BE PERMITTED FOR: (1) coverage for
17 personal lines to natural persons for non-business purposes; (2) INSUR-
18 ANCE SPECIFIED IN SUBSECTION (B) OF SECTION TWO THOUSAND THREE HUNDRED
19 FIVE OR SECTION TWO THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER;
20 (3) INSURANCE REQUIRED TO SATISFY ANY FINANCIAL RESPONSIBILITY REQUIRE-
21 MENT OF THIS STATE; OR (4) A POLICY WRITTEN ON A GROUP BASIS. However,
22 any risk pursuant to paragraph one, two or three of such subsection of
23 such section of this chapter, MEDICAL MALPRACTICE INSURANCE (EXCEPT FOR
24 PHYSICIANS AND SURGEONS), or personal lines risk (except private passen-
25 ger, non-fleet automobile insurance) shall be exempt pursuant to
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05245-02-1
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1 subsection (a) hereof if it is included by the superintendent on the
2 list maintained by [him] THE SUPERINTENDENT pursuant to subsection (a)
3 of section six thousand three hundred three of this article.
4 S 2. Section 6302 of the insurance law, paragraph 3 of subsection (c)
5 as amended by chapter 534 of the laws of 1985, is amended to read as
6 follows:
7 S 6302. Special license. (a) An authorized insurer, as a condition
8 precedent to the obtaining of such exemption, shall obtain a special
9 license from the superintendent.
10 (b) Before such special license shall be issued or renewed the
11 prospective licensee shall file in the office of the superintendent an
12 application in such form and supplements thereto as the superintendent
13 prescribes. Such license shall be subject to annual renewal with an
14 annual fee of [one] TWO thousand dollars.
15 (c) Such license may only be issued to:
16 (1) an authorized insurer [which] THAT maintains at all times a
17 surplus to policyholders of at least [twice the minimum surplus to poli-
18 cyholders required to be maintained for the kinds of insurance which it
19 is authorized to write in this state] THE AUTHORIZED CONTROL LEVEL AS
20 SET FORTH IN ARTICLE THIRTEEN OF THIS CHAPTER;
21 (2) a United States branch which maintains at all times a trusteed
22 surplus of at least [twice the minimum trusteed surplus required to be
23 maintained for the kinds of insurance which it is authorized to write in
24 this state] THE AUTHORIZED CONTROL LEVEL AS SET FORTH IN ARTICLE THIR-
25 TEEN OF THIS CHAPTER; or
26 (3) an insurer initially licensed on or after July first, nineteen
27 hundred eighty-two pursuant to article forty-one of this chapter, or
28 pursuant to article forty-two of this chapter as an accident and health
29 insurer, or pursuant to article sixty-one of this chapter as a recipro-
30 cal insurer, if such insurer is at least meeting the minimum surplus to
31 policyholders requirement or the minimum trusteed surplus requirement
32 imposed upon such insurer by the provisions of the article pursuant to
33 which it was initially licensed.
34 (d) The superintendent may revoke, suspend, or refuse to renew such
35 license if, after notice and a hearing, [he] THE SUPERINTENDENT finds
36 that such action will protect the best interests of the people of this
37 state.
38 S 3. Section 6303 of the insurance law is amended to read as follows:
39 S 6303. Limitations. (a) The exemption [which] THAT may be granted
40 pursuant to this article shall apply only if the business is underwrit-
41 ten and transacted from an office within this state; and [(i)]:
42 (1) the risk, as defined in regulations of the superintendent, produc-
43 es a minimum annual premium in excess of one hundred thousand dollars or
44 such higher amount as the superintendent may prescribe by regulation;
45 [or (ii)]
46 (2) the coverage is for a risk or class of risks which is of an unusu-
47 al nature, a high loss hazard, or difficult to place, pursuant to a list
48 promulgated or amended by the superintendent; OR
49 (3) THE POLICY IS ISSUED TO A LARGE COMMERCIAL INSURED THAT EMPLOYS OR
50 RETAINS A RISK MANAGER TO ASSIST IN THE NEGOTIATION AND PURCHASE OF A
51 POLICY EXEMPTED UNDER THIS ARTICLE.
52 (b) [All policies] FOR THE PURPOSES OF THIS SECTION:
53 (1) "LARGE COMMERCIAL INSURED" MEANS AN ENTITY THAT GENERATES ANNUAL
54 COMMERCIAL RISK INSURANCE PREMIUM IN EXCESS OF TWENTY-FIVE THOUSAND
55 DOLLARS WITH RESPECT TO THE KINDS OF INSURANCE SPECIFIED IN PARAGRAPHS
56 FOUR THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH TWENTY-TWO
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1 AND TWENTY-SEVEN OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED
2 THIRTEEN OF THIS CHAPTER AND:
3 (I) HAS A NET WORTH OF AT LEAST SEVEN MILLION FIVE HUNDRED THOUSAND
4 DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE
5 POLICY'S EFFECTIVE DATE;
6 (II) HAS GROSS ASSETS EXCEEDING TEN MILLION DOLLARS AND A NET WORTH OF
7 AT LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S
8 FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
9 (III) IS A FOR-PROFIT BUSINESS ENTITY THAT GENERATES ANNUAL GROSS
10 REVENUES EXCEEDING FIFTEEN MILLION DOLLARS, AND HAS A NET WORTH OF AT
11 LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S
12 FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
13 (IV) IS A FOR-PROFIT BUSINESS ENTITY THAT HAS GROSS ASSETS EXCEEDING
14 TEN MILLION DOLLARS AND GENERATES ANNUAL GROSS REVENUES EXCEEDING
15 FIFTEEN MILLION DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY
16 PRECEDING THE POLICY'S EFFECTIVE DATE;
17 (V) IS A NOT-FOR-PROFIT ORGANIZATION OR PUBLIC ENTITY WITH AN ANNUAL
18 BUDGET EXCEEDING TWENTY MILLION DOLLARS FOR EACH OF ITS THREE FISCAL
19 YEARS IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
20 (VI) HAS FIFTY EMPLOYEES OR, TOGETHER WITH ITS PARENT, SUBSIDIARIES
21 AND AFFILIATES, ONE HUNDRED EMPLOYEES, AS OF THE INSURED'S FISCAL YEAR
22 END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; OR
23 (VII) IS A MUNICIPALITY WITH A POPULATION OF FIFTY THOUSAND OR MORE
24 PERSONS.
25 (2) "RISK MANAGER" MEANS AN INDIVIDUAL WHO HOLDS THE PROFESSIONAL
26 DESIGNATION OF CPCU, ARM, OR CRM WITH AT LEAST FIVE YEARS EXPERIENCE IN
27 THE ANALYSIS AND TREATMENT OF RISK, LOSS EXPOSURE, INSURANCE COVERAGES,
28 AND ALTERNATIVE METHODS AND PROGRAMS, WHO IS NOT EMPLOYED BY THE INSURER
29 ISSUING THE POLICY OR ANY PERSON IN THE INSURER'S HOLDING COMPANY
30 SYSTEM, AND WHO IS LICENSED AS AN INSURANCE PRODUCER PURSUANT TO ARTICLE
31 TWENTY-ONE OF THIS CHAPTER, UNLESS EXEMPTED FROM LICENSING THEREIN.
32 (3) "MUNICIPALITY" SHALL MEAN ANY COUNTY, CITY, TOWN OR VILLAGE.
33 (C) EFFECTIVE ON THE FIFTH JANUARY FIRST OCCURRING AFTER THE DATE OF
34 THE ENACTMENT OF THIS SUBSECTION AND EACH FIFTH JANUARY FIRST OCCURRING
35 THEREAFTER, THE AMOUNTS SPECIFIED IN PARAGRAPH ONE OF SUBSECTION (B) OF
36 THIS SECTION MAY BE ADJUSTED TO REFLECT THE PERCENTAGE CHANGE FOR SUCH
37 FIVE-YEAR PERIOD IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS
38 PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE DEPARTMENT OF LABOR.
39 THE SUPERINTENDENT MAY CONDUCT A PUBLIC HEARING TO DETERMINE WHETHER
40 SUCH INCREASE IS NECESSARY.
41 (D) EVERY POLICY issued pursuant to the provisions of this article
42 shall contain a notice to the policyholder that the rate and policy form
43 are not subject to the filing requirements of this state and such other
44 notices required by the superintendent pursuant to regulation.
45 [(c)] (E) The superintendent may by regulation prescribe limitations
46 on the total amount of business [which] THAT an insurer may transact
47 pursuant to this article OR REIMPOSE FILING REQUIREMENTS WHERE AND TO
48 THE EXTENT THAT THE SUPERINTENDENT DEEMS IT IN THE INTEREST OF THE POLI-
49 CYHOLDERS.
50 S 4. Subsection (b) of section 2307 of the insurance law, as amended
51 by chapter 508 of the laws of 1998, is amended to read as follows:
52 (b) (1) Except as otherwise provided herein, no policy form shall be
53 delivered or issued for delivery unless it has been filed with the
54 superintendent and either [he] THE SUPERINTENDENT has approved it, or
55 thirty days have elapsed and [he] THE SUPERINTENDENT has not disapproved
A. 3967 4
1 it as misleading, PREJUDICIAL TO THE INTERESTS OF POLICYHOLDERS, UNJUST,
2 UNFAIR, INEQUITABLE, DISCRIMINATORY, or violative of public policy.
3 (2) After notice and hearing to the insurer or rate service organiza-
4 tion which submitted a policy form for approval, the superintendent may
5 withdraw approval of such form on finding that the use of such form is
6 contrary to the legal requirements applicable at the time of withdrawal.
7 The effective date of the withdrawal of approval shall be prescribed by
8 the superintendent but shall be not less than ninety days after notice
9 of withdrawal.
10 (3) With regard to residual value insurance, policy forms and any
11 amendments thereto shall be filed with the superintendent within thirty
12 days of their use by the insurer. For purposes of this subsection,
13 "residual value insurance" shall have the same meaning as set forth in
14 paragraph twenty-two of subsection (a) of section one thousand one
15 hundred thirteen of this chapter, provided however, for the purposes of
16 this subsection such insurance shall only be utilized for commercial
17 purposes, and shall not include personal lines of insurance as defined
18 in paragraph two of subsection (a) of section three thousand four
19 hundred twenty-five of this chapter or any commercial auto insurance,
20 and, provided further that applicants for such insurance shall sign a
21 statement that the applicant has an appropriate level of knowledge and
22 understanding of the use of residual value insurance.
23 (4) POLICY FORMS FOR INLAND MARINE RISKS WHERE THE RATES FOR SUCH
24 RISKS BY GENERAL CUSTOM OF THE BUSINESS ARE NOT WRITTEN ACCORDING TO
25 MANUAL RATES OR RATING PLANS SHALL NOT BE FILED PURSUANT TO PARAGRAPH
26 ONE OF THIS SUBSECTION, UNLESS THE SUPERINTENDENT DIRECTS THAT THEY BE
27 FILED.
28 S 5. This act shall take effect immediately.