S T A T E O F N E W Y O R K
________________________________________________________________________
7220
I N S E N A T E
March 24, 2010
___________
Introduced by Sen. BRESLIN -- 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 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:
Section 1. Sections 6301, 6302, 6303 and 6304 of the insurance law,
paragraph 3 of subsection (c) of section 6302 as amended by chapter 534
of the laws of 1985, are amended to read as follows:
S 6301. Special risks[; filing exemption]. (a) (1) Notwithstanding any
provision of this chapter, the superintendent shall, pursuant to regu-
lations promulgated by him, permit exemption from filing requirements
only with respect to rates and policy forms, where applicable, for any
of the kinds of insurance authorized to be written in this state. THE
EXEMPTION PERMITTED BY THIS PARAGRAPH SHALL NOT APPLY TO POLICIES INSUR-
ING LARGE COMMERCIAL INSUREDS AS DEFINED IN SECTION SIX THOUSAND THREE
HUNDRED TWO OF THIS ARTICLE.
(2) POLICIES INSURING LARGE COMMERCIAL INSUREDS, AS DEFINED IN SECTION
SIX THOUSAND THREE HUNDRED TWO OF THIS ARTICLE, SHALL BE EXEMPT FROM ALL
RATE AND POLICY FORM REQUIREMENTS EXCEPT FOR SECTIONS TWO THOUSAND THREE
HUNDRED ONE, TWO THOUSAND THREE HUNDRED TWO, TWO THOUSAND THREE HUNDRED
THREE, TWO THOUSAND THREE HUNDRED SIXTEEN, TWO THOUSAND THREE HUNDRED
SEVENTEEN, TWO THOUSAND THREE HUNDRED EIGHTEEN, TWO THOUSAND THREE
HUNDRED TWENTY, TWO THOUSAND THREE HUNDRED TWENTY-FOUR, TWO THOUSAND
THREE HUNDRED FORTY, TWO THOUSAND THREE HUNDRED FORTY-TWO, THREE THOU-
SAND ONE HUNDRED THREE, THREE THOUSAND ONE HUNDRED FIVE, THREE THOUSAND
ONE HUNDRED SIX, THREE THOUSAND FOUR HUNDRED ONE, THREE THOUSAND FOUR
HUNDRED TWO, THREE THOUSAND FOUR HUNDRED NINE, THREE THOUSAND FOUR
HUNDRED TEN, THREE THOUSAND FOUR HUNDRED THIRTEEN, THREE THOUSAND FOUR
HUNDRED FOURTEEN, THREE THOUSAND FOUR HUNDRED FIFTEEN, THREE THOUSAND
FOUR HUNDRED TWENTY-NINE, THREE THOUSAND FOUR HUNDRED FORTY, THREE THOU-
SAND FOUR HUNDRED THIRTY-ONE, THREE THOUSAND FOUR HUNDRED THIRTY-TWO,
THREE THOUSAND FOUR HUNDRED THIRTY-THREE, THREE THOUSAND FOUR HUNDRED
THIRTY-FIVE AND THREE THOUSAND FOUR HUNDRED THIRTY-SIX OF THIS CHAPTER,
FOR ANY OF THE KINDS OF INSURANCE AUTHORIZED TO BE WRITTEN IN THIS
STATE.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16546-01-0
S. 7220 2
(b) No exemption pursuant to subsection (a) [hereof] OF THIS SECTION
shall be permitted in relation to the kinds of insurance set forth in
paragraph one, two, three, fifteen, eighteen [or], twenty-three, TWEN-
TY-FOUR, TWENTY-FIVE, TWENTY-SIX, TWENTY-EIGHT OR TWENTY-NINE of
subsection (a) of section one thousand one hundred thirteen of this
chapter, (EXCEPT FOR COVERAGE WRITTEN PURSUANT TO SUBPARAGRAPH (II) OF
PARAGRAPH THREE OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED
SIXTEEN), TO ANY POLICY ISSUED TO PROVIDE MEDICAL MALPRACTICE INSURANCE
AS DEFINED IN SUBSECTION (B) OF SECTION FIVE THOUSAND FIVE HUNDRED ONE
OF THIS CHAPTER, or to coverage for personal lines to natural persons
for non-business purposes. However, any risk pursuant to paragraph one,
two or three of such subsection of such section of this chapter or
personal lines risk (except private passenger, non-fleet automobile
insurance) shall be exempt pursuant to subsection (a) [hereof] OF THIS
SECTION if it is included by the superintendent on the list maintained
by him pursuant to subsection (a) of section six thousand three hundred
three of this article.
(c) An exemption granted pursuant to this section shall apply only to
authorized insurers complying with this chapter, except that it shall
not apply to insurers subject to article sixty-six of this chapter. The
exemption shall not be an exemption for joint underwriting or joint
reinsurance transactions pursuant to section two thousand three hundred
seventeen of this chapter.
S 6302. Special license; DEFINITION. (a) An authorized insurer, as a
condition precedent to the obtaining of such exemption, shall obtain a
special license from the superintendent.
(b) Before such special license shall be issued or renewed the
prospective licensee shall file in the office of the superintendent an
application in such form and supplements thereto as the superintendent
prescribes. Such license shall be subject to annual renewal with an
annual fee of one thousand dollars.
(c) Such license may only be issued to:
(1) an authorized insurer which maintains at all times a surplus to
policyholders of at least twice the minimum surplus to policyholders
required to be maintained for the kinds of insurance which it is author-
ized to write in this state; OR
(2) a United States branch which maintains at all times a trusteed
surplus of at least twice the minimum trusteed surplus required to be
maintained for the kinds of insurance which it is authorized to write in
this state; or
(3) an insurer initially licensed on or after July first, nineteen
hundred eighty-two pursuant to article forty-one of this chapter, or
pursuant to article forty-two of this chapter as an accident and health
insurer, or pursuant to article sixty-one of this chapter as a recipro-
cal insurer, if such insurer is at least meeting the minimum surplus to
policyholders requirement or the minimum trusteed surplus requirement
imposed upon such insurer by the provisions of the article pursuant to
which it was initially licensed.
(d) The superintendent may revoke, suspend, or refuse to renew such
license if, after notice and a hearing, he finds that such action will
protect the best interests of the people of this state.
(E) "LARGE COMMERCIAL INSURED" MEANS A COMMERCIAL RISK POLICY INSURED
THAT MEETS AT LEAST TWO OF THE FOLLOWING CRITERIA:
(1) HAS A NET WORTH OF AT LEAST SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS, AS DETERMINED BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT, AS
S. 7220 3
OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S
EFFECTIVE DATE; OR
(2) HAS GROSS ASSETS EXCEEDING TWENTY-FIVE MILLION DOLLARS AND A NET
WORTH OF AT LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS, AS DETER-
MINED BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT, AS OF THE INSURED'S
FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; OR
(3) IS A FOR-PROFIT BUSINESS ENTITY THAT GENERATES ANNUAL GROSS REVEN-
UES EXCEEDING FIFTEEN MILLION DOLLARS, AS DETERMINED BY AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT, AS OF THE INSURED'S FISCAL YEAR END IMME-
DIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; OR
(4) IS A FOR-PROFIT BUSINESS ENTITY THAT HAS GROSS ASSETS EXCEEDING
TWENTY-FIVE MILLION DOLLARS AND GENERATES ANNUAL GROSS REVENUES EXCEED-
ING TWENTY-FIVE MILLION DOLLARS, AS DETERMINED BY AN INDEPENDENT CERTI-
FIED PUBLIC ACCOUNTANT, AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY
PRECEDING THE POLICY'S EFFECTIVE DATE; OR
(5) IS A NOT-FOR-PROFIT ORGANIZATION OR PUBLIC ENTITY WITH AN ANNUAL
BUDGET EXCEEDING TEN MILLION DOLLARS FOR EACH OF ITS THREE FISCAL YEARS
IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; OR
(6) HAS TWENTY-FIVE EMPLOYEES, OR ONE HUNDRED WITHIN THE CORPORATE
STRUCTURE, AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE
POLICY'S EFFECTIVE DATE; OR
(7) EMPLOYS OR RETAINS A RISK MANAGER TO ASSIST IN THE NEGOTIATION AND
PURCHASE OF A POLICY EXEMPTED UNDER THIS ARTICLE. FOR THE PURPOSE OF
THIS PARAGRAPH, "RISK MANAGER" SHALL MEAN AN INDIVIDUAL WHO HOLDS THE
PROFESSIONAL DESIGNATION CPCU, ARM, OR CRM WITH AT LEAST FIVE YEARS
EXPERIENCE IN THE ANALYSIS AND TREATMENT OF RISK, LOSS EXPOSURE, INSUR-
ANCE COVERAGES, AND ALTERNATIVE METHODS AND PROGRAMS, WHO IS NOT
EMPLOYED BY THE INSURER ISSUING THE POLICY; OR
(8) IS A MUNICIPALITY WITH A POPULATION OF NOT LESS THAN TWENTY-FIVE
THOUSAND PERSONS.
S 6303. Limitations. (a) The exemption which may be granted pursuant
to this article shall apply only if the business is underwritten [and],
transacted, OR SERVICED from an office within this state; and (i) the
risk, as defined in regulations of the superintendent, produces a mini-
mum annual premium in excess of [one hundred] TEN thousand dollars or
such [higher] LOWER amount as the superintendent may prescribe by regu-
lation; or (ii) the coverage is for a risk or class of risks which is of
an unusual nature, a high loss hazard, or difficult to place, pursuant
to a list promulgated or amended by the superintendent.
(b) All policies issued pursuant to the provisions of this article
shall contain a notice to the policyholder that the rate and policy form
are not subject to the filing requirements of this state and such other
notices required by the superintendent pursuant to regulation. THE
NOTICE IN ALL POLICIES ISSUED TO LARGE COMMERCIAL INSUREDS SHALL ALSO
ADVISE THE POLICYHOLDER THAT THE POLICY IS NOT SUBJECT TO ALL PROVISIONS
OF THIS CHAPTER.
[(c) The superintendent may by regulation prescribe limitations on the
total amount of business which an insurer may transact pursuant to this
article.]
S 6304. Special regulations. The superintendent, by regulation, shall
provide for the implementation of the provisions of this article by
establishing methods[,] AND procedures [and reports] for licensing and
for facilitating, monitoring and verifying compliance with this article.
S 2. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.
