Assembly Bill A6680

2009-2010 Legislative Session

Directs superintendent of insurance to amend rules and regulations with respect to homeowners' policies

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Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to insurance
Dec 21, 2009	print number 6680a
Dec 21, 2009	amend (t) and recommit to insurance
Mar 11, 2009	referred to insurance

Bill Amendments

Original

A (Active)

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2009-A6680 - Details

Current Committee:: Assembly Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §3425, Ins L; amd §12, Chap 42 of 1996, amd §23, Chap 136 of 2008
Versions Introduced in Other Legislative Sessions:: 2011-2012: A4261
2013-2014: A6601

2009-A6680 - Summary

Directs superintendent of insurance to amend rules and regulations with respect to homeowners' policies; also directs study of certain facets of insurance industry including, but not limited to the profitability of the property/casualty insurance in coastal areas.

2009-A6680 - Bill Text download pdf

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

                                  6680

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             March 11, 2009
                               ___________

Introduced  by  M.  of  A.  LATIMER, EDDINGTON, LANCMAN, PAULIN, LENTOL,
  PERRY,  WEISENBERG,  BENEDETTO,  ORTIZ,   CLARK,   PHEFFER,   MILLMAN,
  J. RIVERA,  ALFANO,  HYER-SPENCER,  GUNTHER, FIELDS, PERALTA -- Multi-
  Sponsored by -- M. of A. ALESSI, AUBRY,  GALEF,  V. LOPEZ,  MAYERSOHN,
  PEOPLES,  REILLY,  SCHIMEL,  WRIGHT  --  read once and referred to the
  Committee on Insurance

AN ACT to amend the insurance law, in relation to homeowners'  insurance
  policies

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

  Section 1. Section 2351 of the insurance law is amended by adding  two
new subsections (d) and (e) to read as follows:
  (D)  THE SUPERINTENDENT IS DIRECTED TO AMEND THE RULES AND REGULATIONS
OF THE DEPARTMENT  WITH  RESPECT  TO  THE  DEFINITION  OF  THE  MATERIAL
REDUCTION  OF  VOLUME OF HOMEOWNERS' POLICIES TO MEAN A REDUCTION IN THE
NET NUMBER OF HOMEOWNERS' INSURANCE  POLICIES  WRITTEN  BY  TEN  PERCENT
INSTEAD  OF  TWENTY PERCENT OR MORE, OR A REDUCTION IN THE NET NUMBER OF
SUCH POLICIES BY FIVE HUNDRED, WHICHEVER IS GREATER, DURING A FIVE  YEAR
PERIOD  OR  A REDUCTION OF THE NET NUMBER OF HOMEOWNERS' INSURANCE POLI-
CIES IN FORCE, BY TWO PERCENT INSTEAD OF FOUR  PERCENT  OR  MORE,  OR  A
REDUCTION  IN  THE NET NUMBER OF SUCH POLICIES BY ONE HUNDRED, WHICHEVER
IS GREATER, DURING A ONE-YEAR PERIOD.
  (E) THE SUPERINTENDENT IS DIRECTED TO AMEND THE RULES AND  REGULATIONS
OF THE DEPARTMENT WITH RESPECT TO THE PLAN TO BE SUBMITTED TO THE SUPER-
INTENDENT  BY  THE  INSURER  FOR  THE ORDERLY REDUCTION OF THE NUMBER OF
HOMEOWNERS' POLICIES WRITTEN TO REQUIRE THAT SAID PLAN  DEMONSTRATE  THE
POTENTIAL  RISK OR LOSS TO THE SATISFACTION OF THE DEPARTMENT TO JUSTIFY
WIDESPREAD CANCELLATION OR NON-RENEWAL OF HOMEOWNERS' POLICIES.
  S 2. The insurance law is amended by adding a new section 2352 to read
as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02897-01-9

A. 6680                             2

  S 2352. STUDY ON THE PROFITABILITY OF THE PROPERTY/CASUALTY  INSURANCE
INDUSTRY.  THE  DEPARTMENT IS DIRECTED TO CONDUCT A STUDY ON THE PROFIT-
ABILITY OF THE  PROPERTY/CASUALTY  INSURANCE  INDUSTRY.  THE  DEPARTMENT
SHALL  SPECIFICALLY  REVIEW  THE  REASONS AND THE RATE AT WHICH INSURERS
INCREASE  THEIR  PREMIUMS OR TERMINATE COVERAGE IN MARKETS LESS IMPACTED
BY NATURAL DISASTERS. THE DEPARTMENT SHALL MAKE A PRELIMINARY REPORT  TO
THE  GOVERNOR AND LEGISLATURE OF ITS FINDINGS, CONCLUSIONS AND RECOMMEN-
DATIONS NOT LATER THAN MAY FIRST, TWO THOUSAND TEN AND A FINAL REPORT OF
ITS FINDINGS, CONCLUSIONS AND RECOMMENDATIONS NOT LATER THAN MAY  FIRST,
TWO  THOUSAND  ELEVEN AND SHALL SUBMIT WITH ITS REPORTS SUCH LEGISLATIVE
PROPOSALS AS IT DEEMS NECESSARY TO IMPLEMENT ITS PROPOSALS.
  S 3. This act shall take effect immediately.

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2009-A6680A (ACTIVE) - Details

Current Committee:: Assembly Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §3425, Ins L; amd §12, Chap 42 of 1996, amd §23, Chap 136 of 2008
Versions Introduced in Other Legislative Sessions:: 2011-2012: A4261
2013-2014: A6601

2009-A6680A (ACTIVE) - Summary

2009-A6680A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A6680A

TITLE OF BILL:  An act to amend the insurance law, in relation to home-
owners' insurance policies; to amend chapter 42 of the laws of 1996,
amending the insurance law relating to homeowners' insurance and a
temporary panel on homeowners' insurance coverage, in relation to the
panel's evaluation regarding coastal areas; and to amend chapter 136 of
the laws of 2008, amending the insurance law relating to extending the
effectiveness of certain stand-by powers of the New York property insur-
ance underwriting association, in relation to attracting more compet-
itors to the coastal counties

PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to expand the definition of "materially
reduce its volume of policies" to reduce the threshold before insurers
must submit a withdrawal plan to the Insurance Department when non-re-
newing substantial numbers of homeowners' insurance policies in this
State's coastal areas.  Further, the bill expands the definition of the
term "minimizes market disruption" so that it is tailored more to the
needs of homeowners who are near the coast and unable to obtain afforda-
ble homeowners' insurance.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Amends Insurance Law section 3425(o)(2)to reduce the percent-

age or net number of non-renewed homeowners' policies that insurers
terminate in coastal areas that triggers the mandate that such insurer
must file a withdrawal plan to minimize market disruption. Under current
law, if an insurer plans to "materially reduce its volume of policies"
by cancelling or non-renewing 20% or more of its homeowners' policies or
the net number of policies by at least 500 on a state-wide basis during
the next five years period or the same ratio of cancellations during the
course of a single year, then such insurer must file a withdrawal plan
that demonstrates how the homeowners' insurance market will not be
disrupted.

This bill adds a supplemental definition for the term "materially reduce
its volume of policies" that adds a lower threshold for those insurers
that are non-renewing policies in the State's coastal areas.  Under this
definition, if a carrier plans to reduce its number of policies by 15%
over 5 years or the net number of policies by 200 over a five year peri-
od of time, or similar percentage of polices over a one year period of
time in coastal areas, then the carrier must file a withdrawal plan that
is specific to the coastal homeowners' insurance market. Coastal areas
is defined as within one mile of the salt water line of New York's
shoreline.

Section 2: Amends Chapter 136 of the Laws of 2008 to expand the charge
of the Temporary Panel on Homeowners' Insurance Coverage to include
evaluating the profitability of insurers that write homeowners' insur-

ance in this state and the profits or losses such insurers sustain by
writing coverages along this State's coast line. Further, such Task
Force shall look into the estimated cost of obtaining comparable home-
owners' insurance if their previous coverage has been cancelled.

Section 3: Amends section 23 of Chapter 136 of the Laws of 2008 to
encourage the Superintendent of Insurance to seek to new ways to identi-
fy new insurance carriers that may want to write homeowners' insurance
in the State's coastal areas to help replace those carriers that are
slowing withdrawing from this market. Encouraging more private carriers
to write coastal homeowners' insurance should help to increase the
availability of coastal homeowners' insurance and give consumers more
choice in this tightening market.

JUSTIFICATION:

One of New York's largest insurers, recently announced plans to cancel
or "non-renew" more than 26,000 homeowner's insurance policies in the
coastal portions of New York City, Westchester County and Long Island.
However, because this number represents less than 4% of their total
number of policies written in New York State, such insurer is not
required by law to notify the State Insurance Department of their plans,
file a withdrawal plan, or take any steps to ensure that their departure
from this segment of the market is conducted in an orderly manner to
minimize the disruption that is sure to be caused by so many homeowners
scrambling for replacement coverage.

This bill adds a new alternative definition for "materially reduce its
volume of policies" so that if an insurer inordinately begins to with-
draw from the coastal homeowners' market, that such an insurer must also
file a withdrawal plan. In this withdrawal plan filed with the Insurance
Department, the insurer must set for the reasons for such withdrawal,
describe the measures to be taken by the insurer to minimize market
disruption, and provide other information that the Superintendent may
require. The filing of this plan not only forces the withdrawing insurer
to justify its actions to the Department, but gives notice to the
Department so that they can use the regulatory tools at its disposal to
encourage other insurers to increase the number of homeowners' writings
in coastal areas.

PRIOR LEGISLATIVE HISTORY:

2006 - S.7609 - Referred to Insurance
2008 - S.2269-A - Referred to Insurance

FISCAL IMPLICATION:

None.

EFFECTIVE DATE:

Immediate.

2009-A6680A (ACTIVE) - Bill Text download pdf

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

                                 6680--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             March 11, 2009
                               ___________

Introduced  by  M.  of  A.  LATIMER, EDDINGTON, LANCMAN, PAULIN, LENTOL,
  PERRY,  WEISENBERG,  BENEDETTO,  ORTIZ,   CLARK,   PHEFFER,   MILLMAN,
  J. RIVERA,  ALFANO,  HYER-SPENCER,  GUNTHER, FIELDS, PERALTA -- Multi-
  Sponsored by -- M. of A.  ALESSI, AUBRY, GALEF,  V. LOPEZ,  MAYERSOHN,
  PEOPLES-STOKES,  REILLY,  SCHIMEL, WRIGHT -- read once and referred to
  the Committee on Insurance  --  committee  discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

AN  ACT to amend the insurance law, in relation to homeowners' insurance
  policies; to amend chapter 42 of the laws of 1996, amending the insur-
  ance law relating to homeowners' insurance and a  temporary  panel  on
  homeowners'  insurance coverage, in relation to the panel's evaluation
  regarding coastal areas; and to amend chapter 136 of the laws of 2008,
  amending the insurance law relating to extending the effectiveness  of
  certain  stand-by powers of the New York property insurance underwrit-
  ing association, in relation to attracting  more  competitors  to  the
  coastal counties

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

  Section 1. Subparagraphs (C) and (D) of paragraph 2 of subdivision (o)
of section 3425 of the insurance law, as added by chapter 42 of the laws
of 1996, are amended to read as follows:
  (C) The superintendent  shall  promulgate  rules  and  regulations  to
establish  standards for the definition of "materially reduce its volume
of policies" as used in this paragraph.
  (I) Such definition shall require that a plan be filed with the super-
intendent if the insurer plans to reduce the net  number  of  homeowners
insurance  policies as defined in subsection (a) of section twenty-three
hundred fifty-one of this chapter by twenty percent or more, or plans to
reduce the net number of such policies it writes by five hundred, which-
ever is greater, within a five year period of time;  provided,  however,
that  if an insurer is not otherwise required to file a plan pursuant to

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02897-08-9

A. 6680--A                          2

this subparagraph, a plan shall be filed if the insurer plans to  reduce
the net number of such policies it has in force in a twelve month period
by  four percent or more or the net number of such policies it writes by
one hundred, whichever is greater.
  (II)  PROVIDED FURTHER, SUCH DEFINITION OF THE TERM "MATERIALLY REDUCE
ITS VOLUME OF POLICIES" SHALL MEAN  IF  AN  INSURER  PLANS,  IN  COASTAL
AREAS,  TO  REDUCE  THE  NET NUMBER OF HOMEOWNERS' INSURANCE POLICIES AS
DEFINED  IN  SUBSECTION  (A)  OF  SECTION  TWO  THOUSAND  THREE  HUNDRED
FIFTY-ONE OF THIS CHAPTER BY FIFTEEN PERCENT OR MORE, OR PLANS TO REDUCE
THE  NET  NUMBER OF SUCH POLICIES IT WRITES BY TWO HUNDRED, WHICHEVER IS
GREATER, WITHIN A FIVE YEAR PERIOD OF TIME; PROVIDED, HOWEVER,  THAT  IF
AN  INSURER  IS  NOT  OTHERWISE REQUIRED TO FILE A PLAN PURSUANT TO THIS
SUBPARAGRAPH, A PLAN SHALL BE FILED IF THE INSURER PLANS TO  REDUCE  THE
NET  NUMBER OF SUCH POLICIES IT HAS IN FORCE IN A TWELVE MONTH PERIOD BY
THREE PERCENT OR MORE OR THE NET NUMBER OF SUCH POLICIES  IT  WRITES  BY
FORTY,  WHICHEVER  IS GREATER. FOR THE PURPOSES OF THIS SUBPARAGRAPH THE
TERM "COASTAL AREAS" SHALL MEAN THOSE AREAS THAT ARE WITHIN ONE MILE  OF
A  SALTWATER  OCEAN,  SOUND,  INLET OR BAY IN THE COUNTIES OF THE BRONX,
KINGS, NASSAU, QUEENS, RICHMOND, SUFFOLK AND WESTCHESTER.
  The provisions of  this  subparagraph  shall  not  apply  to  policies
cancelled  or  nonrenewed  by  the  insured  or  policies not renewed or
cancelled pursuant to subparagraph (A), (B), (C), (D) or  (E)  of  para-
graph two of subsection (c) of this section.
  (D)  The  superintendent  shall  promulgate  rules  and regulations to
establish standards to approve such an application and to define  "mini-
mizes  market disruption." SUCH DEFINITION OF THE TERM "MINIMIZES MARKET
DISRUPTION" SHALL INCLUDE AN ANALYSIS OF THE ABILITY OF A  HOLDER  OF  A
HOMEOWNER'S  INSURANCE  POLICY WHO HAS BEEN CANCELLED OR TERMINATED IN A
COASTAL AREA TO READILY OBTAIN COMPARABLE REPLACEMENT HOMEOWNERS' COVER-
AGES AT RELATIVELY COMPARABLE PREMIUM RATES  IN  THE  PRIVATE  INSURANCE
MARKET.
  S  2. Paragraphs (h) and (i) of subdivision 1 of section 12 of chapter
42 of the laws of 1996, amending the insurance law relating to  homeown-
ers'  insurance and a temporary panel on homeowners' insurance coverage,
as amended by chapter 136 of the laws of 2008, are  amended  and  a  new
paragraph (j) is added to read as follows:
  (h)  an evaluation of insurer preparedness in the recovery, rebuilding
and renewal processes following weather-related losses; [and]
  (i) an evaluation of public awareness of storm risks and  programs  to
educate the public of storm risks and mitigation techniques[.]; AND
  (J) AN EVALUATION OF THE PROFITABILITY OF INSURERS THAT WRITE HOMEOWN-
ER'S  INSURANCE IN COASTAL AREAS OF THIS STATE AND THE PROFITS OR LOSSES
SUCH INSURERS SUSTAIN BY WRITING COVERAGES ALONG  THIS  STATE'S  COASTAL
AREAS.  THE PANEL SHALL SPECIFICALLY ANALYZE THE REASONS WHY AND RATE AT
WHICH INSURERS MAY BE WITHDRAWING FROM THE COASTAL HOMEOWNERS' INSURANCE
MARKET  AND  INORDINARILY  CANCELLING  SUCH  POLICIES  OR  SUBSTANTIALLY
INCREASING  INSURANCE  PREMIUM  RATES IN SUCH MARKET. FURTHER, THE PANEL
SHALL STUDY THE COST OF  OBTAINING  COMPARABLE  REPLACEMENT  HOMEOWNER'S
COVERAGE  FOR  THOSE  INSUREDS  WHO  HAVE BEEN CANCELLED IN SUCH COASTAL
AREAS. FOR THE PURPOSES OF THIS PARAGRAPH, THE TERM COASTAL  HOMEOWNERS'
INSURANCE  MARKET  SHALL  MEAN THOSE AREAS THAT ARE WITHIN ONE MILE OF A
SALTWATER OCEAN, SOUND, INLET OR BAY  IN  THE  COUNTIES  OF  THE  BRONX,
KINGS, NASSAU, QUEENS, RICHMOND, SUFFOLK, AND WESTCHESTER.
  S 3. Subdivision (a) of section 23 of chapter 136 of the laws of 2008,
amending  the  insurance  law relating to extending the effectiveness of

A. 6680--A                          3

certain stand-by powers of the New York property insurance  underwriting
association, is amended to read as follows:
  (a) The superintendent of insurance shall implement a program designed
to  attract more competitors to the state's homeowners' insurance market
PARTICULARLY WITH RESPECT TO THOSE COMMUNITIES THAT ARE WITHIN ONE  MILE
OF  A SALTWATER OCEAN, SOUND, INLET OR BAY IN THE COUNTIES OF THE BRONX,
KINGS, NASSAU, QUEENS, RICHMOND, SUFFOLK, AND WESTCHESTER.  The  program
shall include, but shall not be limited to:
  (1)  identifying,  contacting  and  soliciting feedback from national,
regional and other insurance carriers not currently  writing  homeowners
insurance in the state to determine their interest in selling homeowners
insurance in the state;
  (2)  adopting  specific  measures  to  encourage such insurers to sell
homeowners' insurance in the state; and
  (3) documenting those issues or concerns such  insurers  may  cite  as
barriers to selling homeowners insurance in the state.
  S 4. This act shall take effect immediately.

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Assembly Bill A6680

Sponsored By

Archive: Last Bill Status - In Assembly Committee

Actions

Bill Amendments

co-Sponsors

multi-Sponsors

2009-A6680 - Details

2009-A6680 - Summary

2009-A6680 - Bill Text download pdf

co-Sponsors

multi-Sponsors

2009-A6680A (ACTIVE) - Details

2009-A6680A (ACTIVE) - Summary

2009-A6680A (ACTIVE) - Sponsor Memo

2009-A6680A (ACTIVE) - Bill Text download pdf

Comments

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Sponsored By

LATIMER

Archive: Last Bill Status - In Assembly Committee

Actions

Bill Amendments

co-Sponsors

Patricia Eddington

Rory Lancman

Amy Paulin

Joseph Lentol

multi-Sponsors

Marc Alessi

Jeffrion Aubry

Sandy Galef

Vito Lopez

2009-A6680 - Details

2009-A6680 - Summary

2009-A6680 - Bill Text download pdf

co-Sponsors

Rory Lancman

Amy Paulin

Joseph Lentol

N. Nick Perry

multi-Sponsors

Marc Alessi

Jeffrion Aubry

Sandy Galef

Vito Lopez

2009-A6680A (ACTIVE) - Details

2009-A6680A (ACTIVE) - Summary

2009-A6680A (ACTIVE) - Sponsor Memo

2009-A6680A (ACTIVE) - Bill Text download pdf

Comments