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A08212 Summary:

BILL NOA08212
 
SAME ASSAME AS S01469
 
SPONSORWeprin
 
COSPNSR
 
MLTSPNSR
 
Amd §6303, Ins L
 
Relates to extending the exemption from filing requirements only with respect to rates and policy forms to businesses underwritten and transacted from an office outside this state.
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A08212 Actions:

BILL NOA08212
 
10/27/2023referred to insurance
01/03/2024referred to insurance
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A08212 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8212
 
SPONSOR: Weprin
  TITLE OF BILL: An act to amend the insurance law, in relation to exemption from filing requirements only with respect to rates and policy forms   PURPOSE: The purpose of the bill is to modernize the insurance law by allowing insurers to take advantage of the Free Trade Zone regardless of whether - or not they maintain a physical office in the state.   SUMMARY OF PROVISIONS: The bill amends Section 6303 (a) of the insurance law to repeal the provision which requires that business must be underwritten and trans- acted from an office within the state in order to be eligible for place- ment in the Free Trade Zone.   JUSTIFICATION: The Free Trade Zone (FTZ) is a useful tool for insurers that provides some flexibility from the usual rate and form filing process as it relates. to larger, sophisticated or highly specialized risks. Unfortu- nately, the FTZ fails to be utilized to its fullest potential because current law requires that, in order to be eligible to place a risk in the FTZ, the business must be underwritten and transacted from an office within New York State. This means that an insurer must maintain a phys- ical office location in the state, even though they are duly licensed to write in the NY admitted market. In the context of today's global econo- my, this requirement is unnecessary and fails to.reflect advancements in technology and innovation. which makes it possible for business to be transacted from practically anywhere in the world. The intent of the FTZ is to allow greater freedom to insureds that are sophisticated enough to understand and negotiate their own insurance needs. They simply do not warrant the same level of protection from DFS as an individual consumer or small business. If an insured is sophisticated enough to assume responsibility for their own insurance needs (often working with risk managers, agents, or brokers), the location in which the policy is underwritten is irrelevant. In today's era of advancing technology and innovation, the most important factor for businesses is that they can readily access enhanced insurance products that keep pace with their evolving risks. The physical location where the insurance transaction occurs simply does not come into the equation. Additionally, the FTZ is beneficial because it makes it possible for authorized insurers to compete more effectively with the non-admitted market. However, the physical office requirement has just the opposite effect, penalizing authorized insurers who do not have a physical pres- ence and incentivizing them to enter the non-admitted market. The proposed. legislation will lead to a more dynamic and modernized regula- tory system that better reflects the current global financial services marketplace. This in turn will give businesses purchasing insurance a broader range of competitive price options and insurance products that can be readily customized to fit their company's risk profile.   LEGISLATIVE HISTORY: S3563 of 2021-22 S3736 of 2019-20 S4654 of 2017.-18   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately.
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A08212 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8212
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    October 27, 2023
                                       ___________
 
        Introduced by M. of A. WEPRIN -- read once and referred to the Committee
          on Insurance
 
        AN  ACT to amend the insurance law, in relation to exemption from filing
          requirements only with respect to rates and policy forms
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subsection  (a)  of section 6303 of the insurance law, as
     2  amended by chapter 490 of the laws of 2011, paragraph 3  as  amended  by
     3  chapter  75 of the laws of 2013 and the opening paragraph of paragraph 3
     4  as amended by chapter 438 of the laws of 2018, is  amended  to  read  as
     5  follows:
     6    (a)  The  exemption that may be granted pursuant to this article shall
     7  apply only if [the business  is  underwritten  and  transacted  from  an
     8  office within this state; and]:
     9    (1) the risk, as defined in regulations of the superintendent, produc-
    10  es a minimum annual premium in excess of one hundred thousand dollars or
    11  such higher amount as the superintendent may prescribe by regulation;
    12    (2) the coverage is for a risk or class of risks which is of an unusu-
    13  al nature, a high loss hazard, or difficult to place, pursuant to a list
    14  promulgated or amended by the superintendent; or
    15    (3) until June thirtieth, two thousand twenty-three, the policy, other
    16  than  a  medical  malpractice  insurance  policy,  is  issued to a large
    17  commercial insured that employs or retains a  special  risk  manager  to
    18  assist  in  the negotiation and purchase of a policy exempted under this
    19  article, provided, however, that:
    20    (A)(i) the special risk manager is not employed by the insurer issuing
    21  the policy or any person in the insurer's holding company system; and
    22    (ii) the special risk manager is licensed as an insurance producer  in
    23  this  state  pursuant  to  article  twenty-one  of  this chapter, unless
    24  exempted from licensing therein; and
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05305-01-3

        A. 8212                             2
 
     1    (B) a policy form that has not been previously filed with  the  super-
     2  intendent  shall  be  filed  with  the  superintendent for informational
     3  purposes within three business days after first  delivery  of  a  policy
     4  using  such form, but no later than sixty calendar days after the incep-
     5  tion date of such policy.
     6    § 2. This act shall take effect immediately.
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