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.
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.
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.