S T A T E   O F   N E W   Y O R K
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                                 4261--A

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            February 2, 2011
                               ___________

Introduced  by M. of A. LATIMER -- read once and referred to the Commit-
  tee on Insurance -- recommitted  to  the  Committee  on  Insurance  in
  accordance  with Assembly Rule 3, sec. 2 -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

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 subsection  (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
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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04328-04-2
              

A. 4261--A                          2

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 ANY ZIP  CODE
OR  RATING  TERRITORY  CONTAINED  PARTIALLY  OR  ENTIRELY WITHIN 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 EIGHT PERCENT OR MORE, OR PLANS  TO  REDUCE
THE  NET NUMBER OF SUCH POLICIES IT WRITES BY FIFTY, WHICHEVER IS GREAT-
ER, 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
TWO PERCENT OR MORE OR THE NET NUMBER OF  SUCH  POLICIES  IT  WRITES  BY
TWENTY,  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: (I) 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; AND (II) THE ADVERSE EFFECTS THAT SUCH CANCELLATIONS MAY HAVE ON
CAPTIVE AGENTS AND THEIR INSURANCE AGENCIES, AND THE MITIGATION MEASURES
THAT  CAN BE UNDERTAKEN BY SUCH INSURERS TO SAFEGUARD THE BUSINESS PROS-
PECTS OF SUCH CAPTIVE AGENTS.
  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  INORDINATELY  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.

A. 4261--A                          3

  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
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 on the first of January next succeed-
ing the date on which it shall have become a law.