Enacts the small insurer protection act prohibiting the filing of an application for an order of rehabilitation or liquidation of a small insurer on certain grounds unless such order is based on: the superintendent's adoption of a report on examination finding the company insolvent; or the annual or quarterly financial statements of the company, which show that the company's admitted assets do not exceed its liabilities and surplus to policyholders if the company does not maintain reserves in an amount determined reasonable by its independent loss reserve specialist or its appointed actuary.
STATE OF NEW YORK
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1495
2023-2024 Regular Sessions
IN SENATE
January 12, 2023
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Introduced by Sens. COMRIE, LANZA, MYRIE, PALUMBO, PARKER, STAVISKY --
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 enacting the small
insurer protection act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 "the small insurer protection act".
3 § 2. Legislative intent. The legislature intends to protect small
4 insurance companies that write commercial automobile insurance within
5 New York state, to encourage new entrants into the insurance market and
6 novel insurance products, and to foster competition in the marketplace,
7 which will benefit policyholders and the public.
8 § 3. The insurance law is amended by adding a new section 7402-a to
9 read as follows:
10 § 7402-a. Small insurer rehabilitation or liquidation. 1. Notwith-
11 standing any other provision of this chapter to the contrary, no appli-
12 cation for an order of rehabilitation or liquidation of a small insurer
13 as defined in this section shall be made on the grounds specified in
14 subsection (a) or (c) of section seven thousand four hundred two of this
15 article, unless such order is based on: (a) the superintendent's
16 adoption of a report on examination, conducted in accordance with arti-
17 cle three of this chapter, finding the company insolvent as defined in
18 section one thousand three hundred nine of this chapter; or (b) the
19 annual or quarterly financial statements of the company: (i) if the
20 financial statements reflect that the company's admitted assets do not
21 exceed its liabilities and surplus to policyholders; and (ii) the
22 company does not maintain reserves in an amount determined reasonable
23 by its independent loss reserve specialist or, if no independent loss
24 reserve specialist is required, by its appointed actuary.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03538-01-3
S. 1495 2
1 2. Nothing in this section shall restrict the superintendent's right
2 to direct an examination pursuant to section three hundred nine of this
3 chapter, or otherwise interfere with the superintendent's regulatory
4 authority as provided in this chapter, nor shall this provision be
5 construed to restrict an insurer's rights and remedies in any judicial
6 or administrative proceeding.
7 3. As used in this section:
8 (a) "small insurer" means a domestic property/casualty insurance
9 company whose annual net direct written premiums written do not exceed
10 twenty-five million dollars, at least seventy-five percent of which is
11 from commercial automobile liability business; and
12 (b) "direct written premiums" means the gross direct written premiums
13 less return premiums on such direct business.
14 § 4. This act shall take effect on the thirtieth day after it shall
15 have become a law. Effective immediately the addition, amendment and/or
16 repeal of any rule or regulation necessary for the implementation of
17 this act on its effective date are authorized to be made and completed
18 on or before such date.
