senate Bill S6706

2013-2014 Legislative Session

Relates to extending the effectiveness of certain provisions relating to automobile and property/casualty insurance rates

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Archive: Last Bill Status - Passed Senate


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Mar 27, 2014 referred to insurance
delivered to assembly
passed senate
Mar 12, 2014 advanced to third reading
Mar 11, 2014 2nd report cal.
Mar 10, 2014 1st report cal.242
Mar 03, 2014 referred to insurance

Votes

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S6706 - Bill Details

Current Committee:
Assembly Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยงยง5412, 2328, 2329, 3425, 2305, 2342, 2344 & 6302, Ins L

S6706 - Bill Texts

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Relates to extending the effectiveness of certain provisions relating to automobile and property/casualty insurance rates.

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BILL NUMBER:S6706

TITLE OF BILL: An act to amend the insurance law, in relation to
extending the effectiveness of certain provisions relating to
automobile and property/casualty insurance rates

PURPOSE:

To extend several important provisions of the Insurance Law that
promote the stability of the property/casualty insurance market.

SUMMARY OF PROVISIONS:

Section one of the bill would extend until June 30, 2017 provisions
which allow the New York Property Insurance Underwriting Association
to write certain coverage upon a determination by the Superintendent
of Insurance that coverage is unavailable in a particular market.

Section two would extend sections 2328 and 2329 of the Insurance Law
dealing with commercial motor vehicle insurance rates to June 30,
2017.

Sections three and four would extend for three years provisions of
section 3425 of the Insurance Law dealing with non-renewal
requirements for automobile insurance.

Section five extends the expiration of subsection (a) of section 2305
of the insurance law relating to prior approval of certain insurance
rates to June 30, 2017.

Section six extends section 2342 of the Insurance Law which extends
the expiration of sections 2307(c), 2308, 2310(a), 2316, 2320, 2323,
2326, 2335, 2336(b), and 2341 to June 30, 2017.

Section seven extends subsection (h) of section 2344 of the Insurance
Law dealing with flexible rate limitations in problem markets to June
30, 2017.

Section eight extends subsection (c) of paragraph 3 of section 6302 of
the Insurance Law dealing with surplus requirements for certain
insurers authorized to write in the free trade zone to December 31,
2016.

Section nine provides for an immediate effective date.

JUSTIFICATION:

Many of the provisions of this bill are important consumer protections
that have been in place for years regarding rate regulation in certain
areas of insurance. Several provisions of the bill also enable
insurers to continue making certain types of insurance readily
available in New York. While some provisions may merit future
analysis, they must be maintained as presently in operation in order
to preserve the stability of the market.

LEGISLATIVE HISTORY:


This is new legislation. These provisions were previously extended for
a three year period by Chapter 490 of the laws of 2011.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.

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

                                  6706

                            I N  S E N A T E

                              March 3, 2014
                               ___________

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 extending  the  effec-
  tiveness   of   certain   provisions   relating   to   automobile  and
  property/casualty insurance rates

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

  Section  1.  Subsection  (g)  of section 5412 of the insurance law, as
amended by chapter 102 of the laws  of  2011,  is  amended  to  read  as
follows:
  (g)  The  provisions of this section shall cease to be of any force or
effect on or after June thirtieth, two  thousand  [fourteen]  SEVENTEEN,
except that policies issued or other obligations incurred by the associ-
ation  shall  not  be impaired by the expiration of this section and the
association shall continue for the purpose of  servicing  such  policies
and performing such obligations.
  S  2. Sections 2328 and 2329 of the insurance law, as amended by chap-
ter 102 of the laws of 2011, are amended to read as follows:
  S 2328. Certain motor vehicle insurance rates; prior approval. For the
periods February first, nineteen  hundred  seventy-four  through  August
second,   two   thousand   one,   and   the   effective   date   of  the
property/casualty insurance availability act through June thirtieth, two
thousand [fourteen] SEVENTEEN, no changes in rates, rating plans, rating
rules and rate manuals applicable to motor vehicle insurance,  including
no-fault  coverages  under  article  fifty-one of this chapter, shall be
made effective until approved by the superintendent, notwithstanding any
inconsistent provisions of this article; provided, however, that changes
in such rates, rating plans, rating rules and rate manuals may  be  made
effective  without  such  approval  if  the rates which result from such
changes are no higher than the insurer's  rates  last  approved  by  the
superintendent. This section shall apply only to policies covering loss-
es or liabilities arising out of ownership of a motor vehicle used prin-
cipally for the transportation of persons for hire, including a bus or a

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14155-01-4

S. 6706                             2

school  bus  as  defined  in  sections  one hundred four and one hundred
forty-two of the vehicle and traffic law.
  S  2329.  Motor vehicle insurance rates; excess profits. In accordance
with regulations prescribed by the superintendent, each insurer  issuing
policies which are subject to article fifty-one of this chapter, includ-
ing  policies  of  motor  vehicle personal injury liability insurance or
policies of motor vehicle property damage liability insurance or  insur-
ance  for  loss  or  damage  to a motor vehicle, shall establish a fair,
practicable, and nondiscriminatory plan for refunding or otherwise cred-
iting to those purchasing such policies their  share  of  the  insurer's
excess  profit,  if  any,  on such policies. An excess profit shall be a
profit beyond a percentage rate of return on net worth  attributable  to
such  policies,  computed  in accordance with the regulation required by
section two thousand three hundred twenty-three  of  this  article,  and
determined by the superintendent to be so far above a reasonable average
profit  as  to amount to an excess profit, taking into consideration the
fact that losses or profits below a reasonable average profit  will  not
be  recouped  from  such  policyholders. Each plan shall apply to policy
periods for the periods January  first,  nineteen  hundred  seventy-four
through  August  second, two thousand one, and the effective date of the
property/casualty insurance availability act through June thirtieth, two
thousand [fourteen] SEVENTEEN.   In  prescribing  such  regulations  the
superintendent  may limit the duration of such plans, waive any require-
ment for refund or credit which he or she determines to be de minimis or
impracticable, adopt forms of returns which shall be made to him or  her
in  order to establish the amount of any refund or credit due, establish
periods and times for the determination and distribution of refunds  and
credits,  and  shall  provide  that  insurers receive appropriate credit
against any refunds or credits required by any such plan for policyhold-
er dividends and for return premiums which may be due under rate  credit
or retrospective rating plans based on experience.
  S  3.  Paragraph  2 of subsection (l) of section 3425 of the insurance
law, as amended by chapter 102 of the laws of 2011, is amended  to  read
as follows:
  (2) The superintendent shall collect, analyze and compile such reports
with  regard  to  the  number  of new insureds, non-renewed insureds and
business written by each insurer in each rating territory of  each  such
insurer and, in each case, the class of insureds (including age and sex)
affected so that a statistical analysis of the results obtained pursuant
to  subsections  (f)  and  (m) of this section shall be provided to each
house of the legislature by  March  fifteenth,  in  the  years  nineteen
hundred  ninety-two, nineteen hundred ninety-six, nineteen hundred nine-
ty-eight, two thousand one, two thousand six, two  thousand  seven,  two
thousand  eight,  two thousand eleven and two thousand [fourteen] SEVEN-
TEEN.
  S 4. Paragraphs 1 and 2 and the opening paragraph of  paragraph  3  of
subsection (m) of section 3425 of the insurance law, as amended by chap-
ter 102 of the laws of 2011, are amended to read as follows:
  (1)  Paragraphs  eight  and nine of subsection (a), subsection (f) and
subparagraphs (B) and (E) of paragraph one of  subsection  (j)  of  this
section  shall  not apply to any new covered policy of automobile insur-
ance voluntarily written on or  after  August  first,  nineteen  hundred
eighty-five and prior to January first, nineteen hundred eighty-six, and
on  or  after August second, two thousand one and prior to the effective
date of the property/casualty insurance  availability  act,  and  on  or
after  June  thirtieth, two thousand [fourteen] SEVENTEEN, but the legal

S. 6706                             3

rights granted to insurers or policyholders under such provisions  shall
not be extinguished or impaired thereby.
  (2)  In  lieu  of  such provisions, paragraph seven of subsection (a),
subparagraph (A) of paragraph one of subsection (j) and paragraph  three
of  this  subsection  shall  apply to such automobile insurance policies
which are newly and voluntarily written to have an effective date on  or
after  August  first,  nineteen hundred eighty-five and prior to January
first, nineteen hundred eighty-six, and on or after August  second,  two
thousand  one  and  prior to the effective date of the property/casualty
insurance availability act, and on or after June thirtieth, two thousand
[fourteen] SEVENTEEN.
  On and after August first, nineteen hundred eighty-five and  prior  to
January  first,  nineteen  hundred  eighty-six,  and  on or after August
second, two thousand  one  and  prior  to  the  effective  date  of  the
property/casualty insurance availability act, and on or after June thir-
tieth,  two  thousand  [fourteen]  SEVENTEEN, no notice of nonrenewal or
conditional  renewal  of  such  covered  automobile  insurance  policies
referred  to  in  this  subsection  shall  be issued to become effective
during the required policy period unless it is based upon a  ground  for
which  the  policy  could have been cancelled or unless it is based upon
one or more of the following grounds which occurred during  the  thirty-
six  month  period  ending on the last day of the fourth month preceding
the month of the effective date of such notice of nonrenewal  or  condi-
tional renewal:
  S  5.  Subsection (f) of section 2305 of the insurance law, as amended
by chapter 102 of the laws of 2011, is amended to read as follows:
  (f) Subsection (a) of this section shall be  of  no  force  or  effect
during  the period August third, two thousand one through the day before
the effective date of the property/casualty insurance availability  act,
and  after June thirtieth, two thousand [fourteen] SEVENTEEN. During the
period August third, two thousand one through the day before the  effec-
tive date of the property/casualty insurance availability act, and again
commencing  on  July first, two thousand [fourteen] SEVENTEEN, all rates
previously subject to subsection (a) of this section, other  than  rates
which are not required to be filed pursuant to subsection (b) of section
two  thousand  three  hundred  ten  of  this  article or which have been
suspended from the filing requirement pursuant to section  two  thousand
three   hundred   eleven  of  this  article,  shall  become  subject  to
subsections (b), (c) and (d) of this section. All  other  provisions  of
this  article  applicable  to kinds of insurance or insurance activities
the rates for which are subject to prior approval under  subsection  (b)
of  this  section  shall apply to kinds of insurance the rates for which
were previously subject to subsection (a) of this section or  the  rates
for  which  are  not  required to be filed pursuant to subsection (b) of
section two thousand three hundred ten of this article or the rates  for
which  have  been  suspended  from  the  filing  requirement pursuant to
section two thousand three hundred eleven of this article.
  S 6. Section 2342 of the insurance law, as amended by chapter  102  of
the laws of 2011, is amended to read as follows:
  S 2342. Expiration of certain provisions. The provisions of subsection
(c)  of  section  two thousand three hundred seven, section two thousand
three hundred eight,  subsection  (a)  of  section  two  thousand  three
hundred  ten,  sections two thousand three hundred sixteen, two thousand
three hundred twenty, two thousand three hundred twenty-three, two thou-
sand three hundred twenty-six, and two thousand  three  hundred  thirty-
five,  subsection  (b)  of section two thousand three hundred thirty-six

S. 6706                             4

and section two thousand three hundred forty-one of this  article  shall
cease  to  be of any force or effect during the period August third, two
thousand  one  through  the  day  before  the  effective  date  of   the
property/casualty  insurance availability act, and after June thirtieth,
two thousand [fourteen] SEVENTEEN.
  S 7. Subsection (h) of section 2344 of the insurance law,  as  amended
by chapter 102 of the laws of 2011, is amended to read as follows:
  (h)  This  section shall cease to be of any force or effect during the
period August third, two thousand one through the day before the  effec-
tive date of the property/casualty insurance availability act, and after
June  thirtieth,  two  thousand  [fourteen] SEVENTEEN, except that rates
shall reflect the likely reductive cost effects reasonably  attributable
to the statutory provisions specified in paragraph one of subsection (g)
of this section.
  S  8.  Paragraph 3 of subsection (c) of section 6302 of the  insurance
law, as amended by chapter 490 of the laws of 2011, is amended  to  read
as follows:
  (3)   until   [June   thirtieth,   two   thousand  fourteen]  DECEMBER
THIRTY-FIRST, TWO THOUSAND SIXTEEN, a domestic property/casualty  insur-
ance  company  that maintains at all times a surplus to policyholders of
at least twice the minimum surplus to policyholders required to be main-
tained for the kinds of insurance that it is authorized to write in this
state, or an insurer licensed pursuant  to  article  sixty-one  of  this
chapter as a reciprocal insurer that maintains at all times a surplus to
policyholders  of at least the minimum surplus to policyholders required
to be maintained for the kinds of insurance that  it  is  authorized  to
write in this state, provided that the domestic property/casualty insur-
ance  company  or  reciprocal  insurer:    (A) has total direct premiums
comprised of at least ninety percent medical malpractice insurance;  (B)
assumes reinsurance premiums in an amount that is less than five percent
of  total  direct premiums written; and (C) writes ninety percent of its
total direct premiums in this state.
  S 9. This act shall take effect immediately.

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