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This entry was published on 2014-09-22
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Limitation of risk, in general
Insurance (ISC) CHAPTER 28, ARTICLE 11
§ 1115. Limitation of risk, in general. (a) Except as otherwise
provided in this chapter, no insurer doing business in this state shall
expose itself to any loss on any one risk in an amount exceeding ten
percent of its surplus to policyholders. In determining the amount of
risk, any portion reinsured in an assuming insurer authorized to do such
business in this state or in an accredited reinsurer, as defined in
subsection (a) of section one hundred seven of this chapter, shall be
deducted. In determining the limitation of risk under any provision of
this chapter, "surplus to policyholders" shall include voluntary
reserves, or any part thereof, not required by law, and be determined
from the insurer's last sworn statement on file with the superintendent,
or the last report on examination filed by the superintendent, whichever
is more recent at the time the risk is assumed. In applying the
limitation under any provision of this chapter to alien insurers, such
provision shall be deemed to refer to the exposure to risk and to the
surplus to policyholders of the United States branch of such alien

(b) This section shall not apply to the insurance of marine risks,
marine protection and indemnity risks, workers' compensation, employers'
liability risks, mortgage guaranty risks, financial guaranty risks,
risks insured for any dollar level of first party benefits provided
pursuant to article fifty-one of this chapter, certificates of title,
guaranties of title or policies of title insurance, or those insurers
subject to the provisions of subsection (c) of section two thousand
three hundred forty-three of this chapter.

(c) (1) An insurer, selling residual value insurance in this state
must at all times maintain surplus to policyholders in the aggregate
amount of no less than: (i) 0.3333 percent or 1/300th of the aggregate
net liability under guaranties of commercial real estate; (ii) 0.6666
percent or 1/150th of the aggregate net liability under guaranties of
commercial transportation, to include, but not inclusively, aircraft,
helicopters, vessels and railcars; (iii) one percent or 1/100th of the
aggregate net liability under guaranties of commercial industrial
equipment; (iv) with regard to all other residual value guarantees, four
percent or 1/25th of the aggregate net liability under such guarantees.
For purposes of subparagraphs (i) through (iv) of this paragraph
residual value is defined as set forth in paragraph twenty-two of
subsection (a) of section one thousand one hundred thirteen of this
article including financial transactions demonstrated to the
satisfaction of the superintendent to be the functional equivalent

(2) An insurer, selling residual value insurance in this state shall
limit its exposure on any one risk, net of collateral and reinsurance to
an amount not to exceed ten percent of the aggregate of the insurer's
surplus to policyholders. For the purposes of this section reinsurance
must be placed with an authorized or accredited reinsurer in New York
state. The credit for collateral shall not exceed fifty percent of the
appraised value of the underlying asset at the date in the future that
the value of the property is guaranteed.