|Assembly Actions - Lowercase
Senate Actions - UPPERCASE
|Jun 12, 2012||referred to insurance|
delivered to assembly
|Jun 11, 2012||advanced to third reading|
|Jun 06, 2012||2nd report cal.|
|Jun 05, 2012||1st report cal.1064|
|Apr 25, 2012||reported and committed to finance|
|Mar 23, 2012||referred to insurance|
senate Bill S6808
Relates to domestic excess line insurance companies
Archive: Last Bill Status - Passed Senate
- In Committee
- On Floor Calendar
- Passed Senate
- Passed Assembly
- Delivered to Governor
- Signed/Vetoed by Governor
view actions (8)
Jun 12, 2012 - floor VoteS6808590floor59Aye0Nay0Absent3Excused0Abstained
show floor vote details
Floor Vote: Jun 12, 2012aye (59)
Jun 5, 2012 - Finance committee VoteS6808340committee34Aye0Nay0Aye with Reservations0Absent1Excused0Abstained
show Finance committee vote details
Finance Committee Vote: Jun 5, 2012aye (34)excused (1)
Apr 25, 2012 - Insurance committee VoteS6808160committee16Aye0Nay0Aye with Reservations1Absent1Excused0Abstained
- show floor vote details
S6808 - Bill Details
- See Assembly Version of this Bill:
- Current Committee:
- Law Section:
- Insurance Law
- Laws Affected:
- Add Art 58 §§5801 - 5808, Ins L
S6808 - Bill Texts
Relates to domestic excess line insurance companies.
view sponsor memo
TITLE OF BILL: An act to amend the insurance law, in relation to domes-
tic excess line insurance companies
PURPOSE: The purpose of this legislation is to facilitate the formation
and operation of domestic line insurance companies within New York
SUMMARY OF PROVISIONS: This bill amends insurance law by adding a new
article 58 to create domestic excess line insurance companies. Specif-
ically, the bill authorizes the superintendent to provide a certificate
of eligibility permitting domestic excess line insurers to enter insur-
ance transactions through excess line licensees, procuring excess line
insurance, provide independently procured insurance to the extent
permitted by law and conduct an excess line and/or surplus line business
in any other state which grants the insurer eligibility. The bill would
allow a New York-domiciled insurer to be treated as non-admitted in New
York for the purposes of writing surplus lines policies in New York.
Further, the legislation defines a domestic lines insurance company and
provides that a domestic excess line insurance company is deemed a non-
admitted insurer for the purposes of the Dodd Frank Wall Street Reform
and Consumer Protection Act, Pub. L. No. 111-203.
EXISTING LAW: The insurance law currently does not provide for the
formation and operation of a domestic excess line insurance company
within New York State.
JUSTIFICATION: The excess line market is an important segment of New
York's insurance marketplace. The excess line market provides a source
of additional insurance capacity and an avenue for coverage in situ-
ations involving hard-to-place risks that the licensed market cannot or
will not write. Historically, an insurance group would have two surplus
line insurers. The first would underwrite excess and surplus business in
49 states, but could not do so in its state of incorporation where it is
licensed. This required a second surplus line insurer to be incorporated
in a different state, so it could underwrite excess and surplus risk in
the on other state where the other insurer could not. Six states (Illi-
nois, Arkansas, Delaware, New Hampshire, New Jersey and Oklahoma) have
enacted laws to permit an insurance company to incorporate an insurer
under their laws for the purposes of underwriting excess and surplus
line risks through excess and surplus line brokers.
Under current law, excess line admitted carriers are not permitted to
write coverage on the New York portion of a multistate surplus line
policy. It then becomes necessary for such company to obtain that
portion of coverage from another insurer through a separate policy.
domiciled outside New York State, solely to write surplus lines business
in New York.
Further, insurer which underwrite an excess and surplus line multistate
risk under the excess and surplus line laws of the insurers home state,
but which has risk exposures in a state where the insurer is licensed,
have exposure that a court located where the insurer is licensed will
not apply the excess and surplus law, but may apply the law relating to
licensed insurers. The bill if enacted would avoid inconsistent court
interpretations which occasionally apply the law. which applies only to
licensed insurers to a policy issued as an excess line policy.
In enacting this legislation New York would maintain a competitive edge
and join the six other states which now authorize such incorporations.
Domestic excess line insurer legislation would create operational cost
savings and efficiencies for such insurers and permit these insurers to
operate exclusively as excess and surplus lines. In addition to effi-
ciencies, reductions in cost and better service for policyholders,
allowing a New York domestic insurer to offer surplus lines coverage in
all fifty states, including its state of domicile, would spur economic
growth in the New York marketplace by helping to attract new businesses
and jobs to New York and prevent the movement of businesses and jobs
away from New York.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: 120 days after it shall have become a law.
view full text
S T A T E O F N E W Y O R K ________________________________________________________________________ 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. S. 6808 3 (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.
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