S T A T E O F N E W Y O R K
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3967
2011-2012 Regular Sessions
I N A S S E M B L Y
January 31, 2011
___________
Introduced by M. of A. MORELLE, P. RIVERA -- read once and referred 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. Subsections (a) and (b) of section 6301 of the insurance
law are amended to read as follows:
(a) Notwithstanding any provision of this chapter, the superintendent
shall, pursuant to regulations promulgated by him THE SUPERINTENDENT,
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] SPECIFIED IN SUBSECTION (B) OF
THIS SECTION.
(b) [No] AN exemption pursuant to subsection (a) hereof shall be
permitted in relation to the kinds of insurance set forth in [paragraph
one, two, three, fifteen, eighteen or twenty-three] PARAGRAPHS FOUR
THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH TWENTY-TWO, TWEN-
TY-SEVEN AND TWENTY-NINE, of subsection (a) of section one thousand one
hundred thirteen of this chapter[, or to] AND SUCH INSURANCE AS THE
SUPERINTENDENT DEEMS TO BE SUBSTANTIALLY SIMILAR TO ONE OF THE FOREGOING
KINDS, EXCEPT NO EXEMPTION MAY BE PERMITTED FOR: (1) coverage for
personal lines to natural persons for non-business purposes; (2) INSUR-
ANCE SPECIFIED IN SUBSECTION (B) OF SECTION TWO THOUSAND THREE HUNDRED
FIVE OR SECTION TWO THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER;
(3) INSURANCE REQUIRED TO SATISFY ANY FINANCIAL RESPONSIBILITY REQUIRE-
MENT OF THIS STATE; OR (4) A POLICY WRITTEN ON A GROUP BASIS. However,
any risk pursuant to paragraph one, two or three of such subsection of
such section of this chapter, MEDICAL MALPRACTICE INSURANCE (EXCEPT FOR
PHYSICIANS AND SURGEONS), or personal lines risk (except private passen-
ger, non-fleet automobile insurance) shall be exempt pursuant to
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05245-02-1
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subsection (a) hereof if it is included by the superintendent on the
list maintained by [him] THE SUPERINTENDENT pursuant to subsection (a)
of section six thousand three hundred three of this article.
S 2. Section 6302 of the insurance law, paragraph 3 of subsection (c)
as amended by chapter 534 of the laws of 1985, is amended to read as
follows:
S 6302. Special license. (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] TWO thousand dollars.
(c) Such license may only be issued to:
(1) an authorized insurer [which] THAT maintains at all times a
surplus to policyholders of at least [twice the minimum surplus to poli-
cyholders required to be maintained for the kinds of insurance which it
is authorized to write in this state] THE AUTHORIZED CONTROL LEVEL AS
SET FORTH IN ARTICLE THIRTEEN OF THIS CHAPTER;
(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] THE AUTHORIZED CONTROL LEVEL AS SET FORTH IN ARTICLE THIR-
TEEN OF THIS CHAPTER; 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] THE SUPERINTENDENT finds
that such action will protect the best interests of the people of this
state.
S 3. Section 6303 of the insurance law is amended to read as follows:
S 6303. Limitations. (a) The exemption [which] THAT may be granted
pursuant to this article shall apply only if the business is underwrit-
ten and transacted from an office within this state; and [(i)]:
(1) the risk, as defined in regulations of the superintendent, produc-
es a minimum annual premium in excess of one hundred thousand dollars or
such higher amount as the superintendent may prescribe by regulation;
[or (ii)]
(2) the coverage is for a risk or class of risks which is of an unusu-
al nature, a high loss hazard, or difficult to place, pursuant to a list
promulgated or amended by the superintendent; OR
(3) THE POLICY IS ISSUED TO A LARGE COMMERCIAL INSURED THAT EMPLOYS OR
RETAINS A RISK MANAGER TO ASSIST IN THE NEGOTIATION AND PURCHASE OF A
POLICY EXEMPTED UNDER THIS ARTICLE.
(b) [All policies] FOR THE PURPOSES OF THIS SECTION:
(1) "LARGE COMMERCIAL INSURED" MEANS AN ENTITY THAT GENERATES ANNUAL
COMMERCIAL RISK INSURANCE PREMIUM IN EXCESS OF TWENTY-FIVE THOUSAND
DOLLARS WITH RESPECT TO THE KINDS OF INSURANCE SPECIFIED IN PARAGRAPHS
FOUR THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH TWENTY-TWO
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AND TWENTY-SEVEN OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED
THIRTEEN OF THIS CHAPTER AND:
(I) HAS A NET WORTH OF AT LEAST SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE
POLICY'S EFFECTIVE DATE;
(II) HAS GROSS ASSETS EXCEEDING TEN MILLION DOLLARS AND A NET WORTH OF
AT LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S
FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
(III) IS A FOR-PROFIT BUSINESS ENTITY THAT GENERATES ANNUAL GROSS
REVENUES EXCEEDING FIFTEEN MILLION DOLLARS, AND HAS A NET WORTH OF AT
LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S
FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
(IV) IS A FOR-PROFIT BUSINESS ENTITY THAT HAS GROSS ASSETS EXCEEDING
TEN MILLION DOLLARS AND GENERATES ANNUAL GROSS REVENUES EXCEEDING
FIFTEEN MILLION DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY
PRECEDING THE POLICY'S EFFECTIVE DATE;
(V) IS A NOT-FOR-PROFIT ORGANIZATION OR PUBLIC ENTITY WITH AN ANNUAL
BUDGET EXCEEDING TWENTY MILLION DOLLARS FOR EACH OF ITS THREE FISCAL
YEARS IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE;
(VI) HAS FIFTY EMPLOYEES OR, TOGETHER WITH ITS PARENT, SUBSIDIARIES
AND AFFILIATES, ONE HUNDRED EMPLOYEES, AS OF THE INSURED'S FISCAL YEAR
END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; OR
(VII) IS A MUNICIPALITY WITH A POPULATION OF FIFTY THOUSAND OR MORE
PERSONS.
(2) "RISK MANAGER" MEANS AN INDIVIDUAL WHO HOLDS THE PROFESSIONAL
DESIGNATION OF CPCU, ARM, OR CRM WITH AT LEAST FIVE YEARS EXPERIENCE IN
THE ANALYSIS AND TREATMENT OF RISK, LOSS EXPOSURE, INSURANCE COVERAGES,
AND ALTERNATIVE METHODS AND PROGRAMS, WHO IS NOT EMPLOYED BY THE INSURER
ISSUING THE POLICY OR ANY PERSON IN THE INSURER'S HOLDING COMPANY
SYSTEM, AND WHO IS LICENSED AS AN INSURANCE PRODUCER PURSUANT TO ARTICLE
TWENTY-ONE OF THIS CHAPTER, UNLESS EXEMPTED FROM LICENSING THEREIN.
(3) "MUNICIPALITY" SHALL MEAN ANY COUNTY, CITY, TOWN OR VILLAGE.
(C) EFFECTIVE ON THE FIFTH JANUARY FIRST OCCURRING AFTER THE DATE OF
THE ENACTMENT OF THIS SUBSECTION AND EACH FIFTH JANUARY FIRST OCCURRING
THEREAFTER, THE AMOUNTS SPECIFIED IN PARAGRAPH ONE OF SUBSECTION (B) OF
THIS SECTION MAY BE ADJUSTED TO REFLECT THE PERCENTAGE CHANGE FOR SUCH
FIVE-YEAR PERIOD IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS
PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE DEPARTMENT OF LABOR.
THE SUPERINTENDENT MAY CONDUCT A PUBLIC HEARING TO DETERMINE WHETHER
SUCH INCREASE IS NECESSARY.
(D) EVERY POLICY 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.
[(c)] (E) The superintendent may by regulation prescribe limitations
on the total amount of business [which] THAT an insurer may transact
pursuant to this article OR REIMPOSE FILING REQUIREMENTS WHERE AND TO
THE EXTENT THAT THE SUPERINTENDENT DEEMS IT IN THE INTEREST OF THE POLI-
CYHOLDERS.
S 4. Subsection (b) of section 2307 of the insurance law, as amended
by chapter 508 of the laws of 1998, is amended to read as follows:
(b) (1) Except as otherwise provided herein, no policy form shall be
delivered or issued for delivery unless it has been filed with the
superintendent and either [he] THE SUPERINTENDENT has approved it, or
thirty days have elapsed and [he] THE SUPERINTENDENT has not disapproved
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it as misleading, PREJUDICIAL TO THE INTERESTS OF POLICYHOLDERS, UNJUST,
UNFAIR, INEQUITABLE, DISCRIMINATORY, or violative of public policy.
(2) After notice and hearing to the insurer or rate service organiza-
tion which submitted a policy form for approval, the superintendent may
withdraw approval of such form on finding that the use of such form is
contrary to the legal requirements applicable at the time of withdrawal.
The effective date of the withdrawal of approval shall be prescribed by
the superintendent but shall be not less than ninety days after notice
of withdrawal.
(3) With regard to residual value insurance, policy forms and any
amendments thereto shall be filed with the superintendent within thirty
days of their use by the insurer. For purposes of this subsection,
"residual value insurance" shall have the same meaning as set forth in
paragraph twenty-two of subsection (a) of section one thousand one
hundred thirteen of this chapter, provided however, for the purposes of
this subsection such insurance shall only be utilized for commercial
purposes, and shall not include personal lines of insurance as defined
in paragraph two of subsection (a) of section three thousand four
hundred twenty-five of this chapter or any commercial auto insurance,
and, provided further that applicants for such insurance shall sign a
statement that the applicant has an appropriate level of knowledge and
understanding of the use of residual value insurance.
(4) POLICY FORMS FOR INLAND MARINE RISKS WHERE THE RATES FOR SUCH
RISKS BY GENERAL CUSTOM OF THE BUSINESS ARE NOT WRITTEN ACCORDING TO
MANUAL RATES OR RATING PLANS SHALL NOT BE FILED PURSUANT TO PARAGRAPH
ONE OF THIS SUBSECTION, UNLESS THE SUPERINTENDENT DIRECTS THAT THEY BE
FILED.
S 5. This act shall take effect immediately.