The New York State Senate

                    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.