§ 5504. Policies. (a) No policy form shall be used by the association
unless it has been filed with the superintendent and either he has
approved it, or thirty days have elapsed and he has not disapproved it
as misleading or violative of public policy.

(b) (1) Except as provided in paragraph two of this subsection, no
cancellation notice or nonrenewal notice shall be effective unless the
association at least forty-five days prior to the effective date of such
cancellation or the end of the policy period, as the case may be, mails
or delivers such notice to the insured at the address shown on the
policy and to such insured's licensed representative.

(2) Where the cancellation is for nonpayment of premium or loss of
license to practice or, if the insured is a hospital, it no longer
possesses a valid operating certificate under section twenty-eight
hundred one-a of the public health law, such cancellation notice must be
mailed or delivered at least fifteen days prior to the effective date of
the cancellation.

(3) Upon written request by an insured or such insured's licensed
representative, the association shall mail or deliver loss information
as provided in subsection (g) of section three thousand four hundred
twenty-six of this chapter to such insured or such insured's licensed
representative within ten business days of such request.

(4) All cancellation notices or nonrenewal notices shall state the
grounds upon which the policy is cancelled or nonrenewed and that, upon
written request of an insured or such insured's licensed representative,
the association will furnish the facts on which the cancellation or
nonrenewal is based. Grounds for nonrenewal shall be limited to the same
grounds as for cancellation. All cancellation notices or nonrenewal
notices shall also provide or be accompanied by a statement advising the
insured of the availability of the loss information specified in
subsection (g) of section three thousand four hundred twenty-six of this
chapter.

(c) A policy of insurance issued by the association may be terminated
other than for non-payment of premiums if the insured:

(1) Is not complying substantially with any term or condition of such
contract.

(2) Has knowingly made, or caused to be made, any false statement or
misrepresentation of a material fact for use in applying for insurance.

(3) Has failed to pay to the association all stabilization reserve
fund charges.

(d) Any termination shall apply to care or services provided after the
effective date of termination, except that insurance coverage may
continue for up to thirty days after termination with respect to care or
services to patients which are a continuation of a treatment begun prior
to the effective date of termination.

(e) Policies issued by the association shall provide at the insured's
option for deductibles and for co-insurance. An applicant electing an
option for a deductible or for co-insurance shall have the right to
purchase an option under which the association shall not settle any
claim under the policy without the consent of the insured. Any policy
issued by the association without a deductible or co-insurance shall
provide that the association shall have the sole authority to settle any
claim up to policy limits without the consent of the insured.

(f) (1) The association shall issue or renew policies of medical
malpractice insurance for physicians on a claims-made or occurrence
basis, as prescribed by the superintendent by regulation.

(2) A claims-made policy shall contain the following provisions:

(A) if the insured has purchased a claims-made policy from an admitted
insurer or the association for a period of five or more consecutive
years and the insured, after attaining the age of sixty-five or older,
retires permanently and totally from the practice of medicine or if the
insured has purchased a claims-made policy for a period of ten or more
consecutive years and the insured, after attaining the age of fifty-five
or older, retires permanently and totally from the practice of medicine,
the association shall, without charging an additional premium therefor
at the time of, or subsequent to, such retirement, also cover all
occurrences between the inception date of the first such consecutive
policy from such association and such retirement date which, subsequent
to the termination date, are reported in accordance with statutory and
policy requirements;

(B) if the insured dies or becomes permanently disabled and unable to
practice medicine while covered by such policy the association shall,
without charging an additional premium therefor at the time of, or
subsequent to, such event, also cover all occurrences between the
inception date of the first such consecutive policy from such
association and the death or disability of the insured, and

(C) the association shall make available and shall advise the insured
of the availability and cost of coverage for occurrences between the
inception date of the first such consecutive policy from such
association and the termination of such policy which, subsequent to the
termination date, are reported in accordance with statutory and policy
requirements, pursuant to such terms and conditions as may be specified
by the superintendent by regulation. The insured shall have the option
of purchasing such coverage either in a single payment or in three
annual installments with an additional finance charge.

(3) Such regulation shall also provide that if the coverage of an
insured who continues to practice in this state is transferred from an
admitted insurer or the association to another admitted insurer or the
association without any gap in coverage, the former entity shall pay
over to the successor an actuarially appropriate dollar amount to
provide for the requirements of paragraph two of this subsection, and
the insured shall be entitled to the benefits of this provision as if
such insured had been continuously covered by the successor entity
during the entire period of consecutive years of coverage.

(4) Such regulation shall also provide that if the coverage of an
insured is transferred from the association, if the association is in
liquidation, to an admitted insurer not in liquidation without any gap
in coverage, then the successor entity shall accept the amounts payable
from the property-casualty insurance security fund as provided in
subparagraph (G) of paragraph one of subsection (a) of section seven
thousand six hundred three of this chapter, to provide for the
requirements of paragraphs two and three of this subsection, and the
insured shall be entitled to the benefits of such paragraphs as if such
insured had been continuously covered by the successor entity during the
entire period of consecutive years of coverage.

(5) The association may issue a claims-made policy with more liberal
policy provisions than are required in this subsection, subject to the
approval of the superintendent. Such liberal policy provisions may
include but shall not be limited to a provision which, for all of the
policyholders of the association, grants credits toward the cost of
coverage provided in paragraph two of this subsection in proportion to
the number of years the insured has purchased a claims-made policy.