Senate Bill S5310

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5310
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2025
                                ___________
 
 Introduced  by  Sens.  BAILEY, GALLIVAN, PALUMBO, WEBB -- 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 permitting a waiver of
   the  diligent  effort requirement in limited circumstances for certain
   insurance coverage to be placed by licensed excess line  brokers  with
   unauthorized insurers
 
   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) OF THIS PARAGRAPH 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 coverage 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09627-01-5
              

 S. 5310                             2
 
 involved.  The  licensee  and the affirming broker shall be excused from
 affirming that a diligent effort was made if the  superintendent  deter-
 mines,  pursuant  to paragraph four of this subsection, that no declina-
 tions  are  required.  NOTWITHSTANDING  ANY  PROVISION  TO  THE CONTRARY
 CONTAINED IN   THIS CHAPTER,   WHERE   A  RETAIL    PRODUCING  INSURANCE
 BROKER   SEEKS  TO PROCURE  OR PLACE COMMERCIAL LINES INSURANCE  THROUGH
 AN  UNAFFILIATED WHOLESALE  EXCESS  LINE  INSURANCE BROKER,   BOTH   THE
 RETAIL  PRODUCING  INSURANCE BROKER AND THE WHOLESALE EXCESS LINE INSUR-
 ANCE BROKER SHALL BE EXCUSED FROM MAKING ANY DILIGENT  EFFORT  OTHERWISE
 REQUIRED BY THIS ARTICLE.
   §  2.  Section  2118  of  the insurance law is amended by adding a new
 subsection (g) to read as follows:
   (G) (1) AS USED IN THIS SECTION:
   (A) "RETAIL PRODUCING INSURANCE  BROKER"  MEANS  AN  INSURANCE  BROKER
 LICENSEE WHO DIRECTLY DEALS WITH AN INSURED;
   (B) "WHOLESALE EXCESS LINE INSURANCE BROKER" MEANS THE LICENSED EXCESS
 LINE  INSURANCE  BROKER  FROM  WHOM OR THROUGH WHOM THE RETAIL INSURANCE
 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 PRODUCING INSURANCE BROKER AND A  WHOLESALE  EXCESS  LINE
 INSURANCE  BROKER  ARE  UNAFFILIATED IF SUCH BROKER DOES NOT CONTROL, IS
 NOT CONTROLLED BY, OR IS NOT UNDER COMMON  CONTROL  WITH  THE  OTHER.  A
 RETAIL  PRODUCING  INSURANCE BROKER OR A WHOLESALE EXCESS LINE INSURANCE
 BROKER HAS CONTROL OVER THE OTHER IF THE BROKER: (A) DIRECTLY  OR  INDI-
 RECTLY  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 (B) CONTROLS IN ANY MANNER THE ELECTION OF A
 MAJORITY OF THE DIRECTORS OR TRUSTEES OF THE OTHER.
   § 3. This act shall take effect immediately, provided,  however,  that
 the  amendments  to subparagraph (A) of paragraph 3 of subsection (b) of
 section 2118 of the insurance law made by section one of this act  shall
 not  affect  the  expiration  of  such subsection and shall be deemed to
 expire therewith.