S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5241
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 12, 2021
                                ___________
 
 Introduced by M. of A. HUNTER -- read once and referred to the Committee
   on Insurance
 
 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
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03856-01-1

 A. 5241                             2
 
 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 subsection and shall be
 deemed to expire therewith.