S T A T E O F N E W Y O R K
________________________________________________________________________
8842--A
2019-2020 Regular Sessions
I N A S S E M B L Y
December 18, 2019
___________
Introduced by M. of A. HUNTER -- read once and referred to the Committee
on Insurance -- recommitted to the Committee on Insurance in accord-
ance 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 permitting certain
insurance coverage to be placed by licensed excess line broker with
unauthorized insurers without regard to the diligent effort require-
ment and simplifying the excess line insurance placement affidavit
requirements
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraph (A) of paragraph 3 of subsection (b) of
section 2118 of the insurance law, as amended by section 12 of part I of
chapter 61 of the laws of 2011, is amended to read as follows:
(A) Except as provided in subparagraph (F) AND SUBJECT TO SUBPARAGRAPH
(C) of this paragraph, submission of insurance documents to the excess
line association shall be accompanied by a statement subscribed to, and
affirmed by, the licensee or sublicensee as true under the penalties of
perjury that, after diligent effort, the full amount of insurance
required could not be procured, from authorized insurers, each of which
is authorized to write insurance of the kind requested and which the
licensee has reason to believe might consider writing the type of cover-
age or class of insurance involved, and further showing that the amount
of insurance procured from an unauthorized insurer is only the excess
over the amount procurable from an authorized insurer. The licensee,
however, shall be excused from affirming that a diligent effort, as
defined above, was made to procure the coverage from authorized insurers
if the licensee's affidavit is accompanied by the affidavit of another
broker involved in the placement affirming as true under the penalties
of perjury that, after diligent effort by the affirming broker, the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06625-04-0
A. 8842--A 2
required insurance could not be procured from an authorized insurer
which the affirming broker had reason to believe might consider writing
the type of coverage or class of insurance involved. The licensee and
the affirming broker shall be excused from affirming that a diligent
effort was made if the superintendent determines, pursuant to paragraph
four of this subsection, that no declinations are required. NOTWITH-
STANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS CHAPTER, WHERE A
RETAIL INSURANCE BROKER SEEKS TO PROCURE OR PLACE COMMERCIAL LINES
INSURANCE THROUGH AN UNAFFILIATED WHOLESALE EXCESS LINE INSURANCE
BROKER, BOTH THE RETAIL INSURANCE BROKER AND THE WHOLESALE EXCESS LINE
INSURANCE BROKER SHALL BE EXCUSED FROM MAKING ANY DILIGENT EFFORT OTHER-
WISE REQUIRED BY THIS ARTICLE.
§ 2. Subparagraph (C) of paragraph 3 of subsection (b) of section 2118
of the insurance law, as amended by chapter 684 of the laws of 1993, is
amended to read as follows:
(C) Every licensee, or affirming broker, in connection with the place-
ment of each risk pursuant to this section NOT OTHERWISE EXEMPT FROM THE
DILIGENT EFFORT REQUIREMENT, shall record on the affidavit required
pursuant to subparagraph (A) of this paragraph the NAME AND NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) CODE OF EACH AUTHORIZED
INSURER DECLINING A RISK AND information relied upon that formed the
basis of such licensee's or affirming broker's reason to believe that
the authorized insurer might consider writing the type of coverage or
class of insurance involved. NO ADDITIONAL DILIGENT EFFORT INFORMATION
SHALL BE REPORTED ON THE AFFIDAVIT.
§ 3. Section 2118 of the insurance law is amended by adding a new
subsection (g) to read as follows:
(G) (1) FOR THE PURPOSES OF THIS SECTION:
(A) A "RETAIL INSURANCE BROKER" MEANS AN INSURANCE BROKER LICENSEE WHO
DIRECTLY DEALS WITH AN INSURED;
(B) A "WHOLESALE EXCESS LINE INSURANCE BROKER" MEANS THE LICENSED
EXCESS LINE INSURANCE BROKER FROM WHOM OR THROUGH WHOM THE RETAIL INSUR-
ANCE BROKER HAS PROCURED EXCESS LINE COVERAGE ON BEHALF OF THE INSURED;
AND
(C) "COMMERCIAL LINES INSURANCE" MEANS ANY POLICY OF INSURANCE NOT
DEFINED AS A "COVERED POLICY" IN SUBSECTION (A) OF SECTION THREE THOU-
SAND FOUR HUNDRED TWENTY-FIVE OF THIS CHAPTER.
(2) A RETAIL INSURANCE BROKER AND A WHOLESALE EXCESS LINE INSURANCE
BROKE ARE UNAFFILIATED IF ONE DOES NOT CONTROL, IS NOT CONTROLLED BY, OR
IS NOT UNDER COMMON CONTROL WITH THE OTHER. ONE HAS CONTROL OVER THE
OTHER IF THE BROKER DIRECTLY OR INDIRECTLY OR ACTING THROUGH ONE OR MORE
OTHER PERSONS OWNS, CONTROLS, OR HAS THE POWER TO VOTE TWENTY-FIVE
PERCENT OR MORE OF ANY CLASS OF VOTING SECURITIES OF THE OTHER; OR
CONTROLS IN ANY MANNER THE ELECTION OF A MAJORITY OF THE DIRECTORS OR
TRUSTEES OF THE OTHER.
§ 4. This act shall take effect immediately, provided, however, that
the amendments to subparagraphs (A) and (C) of paragraph 3 of subsection
(b) of section 2118 of the insurance law made by sections one and two of
this act shall not affect the expiration of such paragraph and shall be
deemed to expire therewith.