S T A T E   O F   N E W   Y O R K
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                                  6808

                            I N  S E N A T E

                             March 23, 2012
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to domestic  excess  line
  insurance companies

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new article 58  to
read as follows:
                                ARTICLE 58
                DOMESTIC EXCESS LINE INSURANCE COMPANIES
SECTION 5801. PURPOSE AND APPLICABILITY OF ARTICLE.
        5802. DEFINITIONS.
        5803. ORGANIZATION AND APPROVAL.
        5804. TAXATION.
        5805. POLICY RATE AND FORMS.
        5806. APPLICABILITY OF OTHER LAWS.
        5807. EXEMPTIONS.
        5808. MANDATORY DISCLOSURE NOTICE.
  S  5801.  PURPOSE  AND  APPLICABILITY  OF ARTICLE. THE PURPOSE OF THIS
ARTICLE IS TO FACILITATE THE FORMATION AND OPERATION OF DOMESTIC  EXCESS
LINE INSURANCE COMPANIES WITHIN THE STATE OF NEW YORK.
  S  5802.  DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A) "CERTIFICATE OF ELIGIBILITY" MEANS A  WRITTEN  AUTHORIZATION  FROM
THE  SUPERINTENDENT  PERMITTING A DOMESTIC EXCESS LINE INSURANCE COMPANY
TO:
  (1) ENTER INSURANCE TRANSACTIONS THROUGH EXCESS LINE LICENSEES PROCUR-
ING EXCESS LINE INSURANCE;
  (2) PROVIDE INDEPENDENTLY PROCURED INSURANCE TO THE  EXTENT  PERMITTED
BY LAW; AND
  (3)  CONDUCT  AN EXCESS LINE AND/OR SURPLUS LINE BUSINESS IN ANY OTHER
STATE WHICH GRANTS THE INSURER ELIGIBILITY.
  (B) "DOMESTIC EXCESS LINE INSURANCE COMPANY" MEANS:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14540-02-2
              

S. 6808                             2

  (1) AN INSURER ORGANIZED AND INCORPORATED IN NEW YORK  AS  AN  INSURER
WHICH  IS  NOT  AN  AUTHORIZED INSURER AS DEFINED IN SECTION ONE HUNDRED
SEVEN OF THIS CHAPTER BUT WHICH IS GRANTED A CERTIFICATE OF  ELIGIBILITY
BY THE SUPERINTENDENT TO INSURE:
  (A)  RISKS  PLACED  BY EXCESS LINE LICENSEES OF THE KINDS OF INSURANCE
SET FORTH IN SECTION TWO THOUSAND ONE HUNDRED FIVE OF THIS CHAPTER;
  (B) INDEPENDENTLY PROCURED INSURANCE TO THE EXTENT PERMITTED  BY  LAW;
AND
  (C)  EXCESS  LINE AND/OR SURPLUS LINE RISKS FOR ANY INSURED WHOSE HOME
STATE IS A STATE OTHER THAN NEW YORK PROVIDED THE INSURER IS ELIGIBLE TO
WRITE SUCH RISKS IN SUCH STATE.
  (2) A DOMESTIC EXCESS LINE INSURANCE COMPANY IS DEEMED  A  NONADMITTED
INSURER  FOR  PURPOSES OF THE DODD FRANK WALL STREET REFORM AND CONSUMER
PROTECTION ACT, PUB. L. NO. 111-203.
  S 5803. ORGANIZATION AND APPROVAL. (A) A DOMESTIC EXCESS  LINE  INSUR-
ANCE  COMPANY  MAY BE INCORPORATED AND ORGANIZED IN THE MANNER DESCRIBED
IN SECTION ONE THOUSAND TWO HUNDRED ONE OF THIS CHAPTER, EXCEPT AS MODI-
FIED BY THE PROVISIONS OF THIS ARTICLE.
  (B) UPON INCORPORATION AND COMPLETION OF THE REQUIREMENTS OF ORGANIZA-
TION UNDER SECTION ONE THOUSAND TWO  HUNDRED  ONE  AND  SUBJECT  TO  ALL
PROVISIONS OF THIS ARTICLE, THE SUPERINTENDENT SHALL, WITHIN THIRTY DAYS
OF  RECEIPT  OF A CERTIFIED COPY OF A RESOLUTION ADOPTED BY THE BOARD OF
DIRECTORS DECLARING THAT THE INSURER INTENDS TO ACT AS A DOMESTIC EXCESS
LINE INSURANCE COMPANY, ISSUE A CERTIFICATE OF ELIGIBILITY.
  (C) EVERY DOMESTIC EXCESS LINE INSURANCE COMPANY MUST HAVE  AND  MAIN-
TAIN  PRIOR TO ISSUANCE OF A CERTIFICATE OF ELIGIBILITY AND AT ALL TIMES
THEREAFTER A MINIMUM CAPITAL AND PAID IN SURPLUS IN AN AMOUNT  EQUAL  TO
OR  EXCEEDING  THE  GREATER OF FORTY-FIVE MILLION DOLLARS OR THE MINIMUM
AMOUNT REQUIRED BY NEW YORK FOR FOREIGN AND ALIEN  INSURER  EXCESS  LINE
ELIGIBILITY  AS SET FORTH IN A REGULATION PROMULGATED BY THE SUPERINTEN-
DENT.
  (D) TRANSACTIONS UNDER THIS ARTICLE  SHALL  NOT  CONSTITUTE  DOING  AN
INSURANCE  BUSINESS  WITHOUT A LICENSE IN VIOLATION OF SUBSECTION (A) OF
SECTION ONE THOUSAND ONE HUNDRED TWO OF THIS CHAPTER.
  (E) UPON ISSUANCE OF A CERTIFICATE OF ELIGIBILITY  THE  DIRECTORS  AND
INCORPORATORS  SHALL HAVE NO FURTHER LIABILITY FOR THE DEBTS AND LIABIL-
ITIES OF THE INSURER.
  S 5804. TAXATION.  (A) THE TAX SET FORTH IN SECTION TWO  THOUSAND  ONE
HUNDRED  EIGHTEEN  OF  THIS  CHAPTER  SHALL  APPLY TO THE GROSS PREMIUMS
CHARGED LESS THE AMOUNT OF PREMIUM RETURNED TO SUCH  INSUREDS  ON  EVERY
POLICY  PROCURED  BY  AN  EXCESS LINE LICENSEE WHEN NEW YORK IS THE HOME
STATE OF THE INSURED. IT IS THE DUTY OF THE EXCESS LINE LICENSEE TO  PAY
SUCH TAX.
  (B)  EVERY DOMESTIC EXCESS LINE INSURANCE COMPANY IS EXEMPT FROM ARTI-
CLE NINETY-ONE OF THIS CHAPTER, SECTION TWO HUNDRED SIX OF THE FINANCIAL
SERVICES LAW, AND ARTICLES NINE, NINE-A AND THIRTY-THREE OF THE TAX LAW.
  S 5805. POLICY RATE AND FORMS. DOMESTIC EXCESS LINE  INSURANCE  COMPA-
NIES  ARE EXEMPT FROM ARTICLE TWENTY-THREE OF THIS CHAPTER AND SHALL NOT
BE REQUIRED TO FILE NOR SEEK APPROVAL FOR ANY FORM,  CONTRACT  OR  OTHER
DOCUMENT WHICH EXPRESSES COVERAGE TERMS AND CONDITIONS.
  S  5806.  APPLICABILITY OF OTHER LAWS. (A) DOMESTIC EXCESS LINE INSUR-
ANCE COMPANIES ARE SUBJECT TO THE PROVISIONS OF:
  (1) ARTICLE THIRTEEN OF THIS CHAPTER. ASSETS AND DEPOSITS.
  (2) ARTICLE FOURTEEN OF THIS CHAPTER. INVESTMENTS.
  (3) ARTICLE FIFTEEN OF THIS CHAPTER. HOLDING COMPANIES.

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  (4)  ARTICLE  SIXTEEN  OF  THIS  CHAPTER.  SUBSIDIARIES  OF   DOMESTIC
PROPERTY/CASUALTY INSURANCE COMPANIES AND CERTAIN OTHER ENTITIES.
  (5)  ARTICLE SEVENTY-ONE OF THIS CHAPTER. MERGER, CONSOLIDATION, REDO-
MESTICATION, ACQUISITION OF ASSETS AND ACQUISITION OF CERTAIN SHARES  OF
INSURERS.
  (6) ARTICLE SEVENTY-FOUR OF THIS CHAPTER. REHABILITATION, LIQUIDATION,
CONSERVATION AND DISSOLUTION OF INSURERS.
  (7)  SECTION  ONE THOUSAND TWO HUNDRED TWELVE OF THIS CHAPTER, SERVICE
OF PROCESS UPON SUPERINTENDENT AS ATTORNEY.
  (B) ANY PROVISION OF THIS CHAPTER WHICH APPLIES  TO  ELIGIBLE  FOREIGN
AND ALIEN EXCESS LINE INSURERS UNLESS INCONSISTENT WITH THIS ARTICLE.
  S  5807.  EXEMPTIONS.  DOMESTIC  EXCESS  LINE  INSURANCE COMPANIES ARE
EXEMPT FROM THE PROVISIONS OF:
  (A) ARTICLE FIFTY-TWO OF THIS CHAPTER. MOTOR VEHICLE ACCIDENT INDEMNI-
FICATION CORPORATION.
  (B) ARTICLE FIFTY-THREE  OF  THIS  CHAPTER.  MOTOR  VEHICLE  INSURANCE
ASSIGNED RISK PLANS.
  (C)  ARTICLE  FIFTY-FOUR  OF THIS CHAPTER. NEW YORK PROPERTY INSURANCE
UNDERWRITING ASSOCIATION.
  (D) ARTICLE FIFTY-FIVE OF THIS CHAPTER. MEDICAL MALPRACTICE  INSURANCE
ASSOCIATION.
  (E)  ARTICLE  SEVENTY-SIX  OF THIS CHAPTER. PROPERTY/CASUALTY SECURITY
FUNDS.
  (F) SECTION ONE THOUSAND TWO HUNDRED THIRTEEN OF THIS CHAPTER, SERVICE
OF PROCESS UPON SUPERINTENDENT AS ATTORNEY FOR UNAUTHORIZED INSURERS.
  S 5808. MANDATORY DISCLOSURE NOTICE. THE SUPERINTENDENT MAY, BY  REGU-
LATION,  REQUIRE  EVERY POLICY AND/OR BINDER ISSUED BY A DOMESTIC EXCESS
LINE  INSURANCE  COMPANY  TO  BEAR   SPECIFIC   LANGUAGE   CONSPICUOUSLY
DISPLAYED,  WHICH  ADVISES  THE  INSURED  THAT THE INSURER IS A DOMESTIC
EXCESS LINE INSURANCE COMPANY, THAT IN THE EVENT OF  INSOLVENCY  OF  THE
INSURER PROTECTIONS PROVIDED BY THE NEW YORK STATE SECURITY FUNDS DO NOT
APPLY  AND  THAT THE POLICY MAY NOT BE SUBJECT TO ALL OF THE REGULATIONS
PERTAINING TO POLICY FORMS.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law. Effective immediately, the addition,  amend-
ment and/or repeal of any rule or regulation necessary for the implemen-
tation  of this act on its effective date is authorized to be made on or
before such date.