STATE OF NEW YORK
________________________________________________________________________
4068--A
2011-2012 Regular Sessions
IN SENATE
March 16, 2011
___________
Introduced by Sen. SEWARD -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the insurance law, in relation to exempting large
commercial insureds from certain rate and policy form requirements
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subsections (a) and (b) of section 6301 of the insurance
2 law are amended to read as follows:
3 (a) Notwithstanding any provision of this chapter, the superintendent
4 shall, pursuant to regulations promulgated by [him] the superintendent,
5 permit exemption from filing requirements only with respect to rates and
6 policy forms, where applicable, for any of the kinds of insurance
7 [authorized to be written in this state] specified in subsection (b) of
8 this section.
9 (b) [No] An exemption pursuant to subsection (a) [hereof] of this
10 section shall be permitted in relation to the kinds of insurance set
11 forth in [paragraph one, two, three, fifteen, eighteen or twenty-three]
12 paragraphs four through fourteen, sixteen, seventeen, nineteen through
13 twenty-two, twenty-seven and twenty-nine of subsection (a) of section
14 one thousand one hundred thirteen of this chapter[, or to] and such
15 insurance as the superintendent deems to be substantially similar to one
16 of the foregoing kinds, except no exemption may be permitted for: (1)
17 coverage for personal lines to natural persons for non-business
18 purposes; (2) insurance specified in subsection (b) of section two thou-
19 sand three hundred five or section two thousand three hundred twenty-
20 eight of this chapter except medical malpractice liability insurance;
21 (3) insurance required to satisfy any financial responsibility require-
22 ment of this state; or (4) a policy written on a group basis. However,
23 any risk pursuant to paragraph one, two or three of [such] subsection
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10253-04-1
S. 4068--A 2
1 (a) of [such] section one thousand one hundred thirteen of this chapter,
2 medical malpractice insurance, or personal lines risk (except private
3 passenger, non-fleet automobile insurance) shall be exempt pursuant to
4 subsection (a) [hereof] of this section if it is included by the super-
5 intendent on the list maintained by [him] the superintendent pursuant to
6 subsection (a) of section six thousand three hundred three of this arti-
7 cle.
8 § 2. Section 6302 of the insurance law, paragraph 3 of subsection (c)
9 as amended by chapter 534 of the laws of 1985, is amended to read as
10 follows:
11 § 6302. Special license. (a) An authorized insurer, as a condition
12 precedent to the obtaining of such exemption, shall obtain a special
13 license from the superintendent.
14 (b) Before such special license shall be issued or renewed the
15 prospective licensee shall file in the office of the superintendent an
16 application in such form and supplements thereto as the superintendent
17 prescribes. Such license shall be subject to annual renewal with an
18 annual fee of [one] two thousand dollars.
19 (c) Such license may only be issued to:
20 (1) an authorized insurer [which] that maintains at all times a
21 surplus to policyholders of at least [twice the minimum surplus to poli-
22 cyholders required to be maintained for the kinds of insurance which it
23 is authorized to write in this state] the authorized control level as
24 set forth in article thirteen of this chapter;
25 (2) a United States branch which maintains at all times a trusteed
26 surplus of at least [twice the minimum trusteed surplus required to be
27 maintained for the kinds of insurance which it is authorized to write in
28 this state] the authorized control level as set forth in article thir-
29 teen of this chapter provided, however, that a domestic insurer whose
30 primary liabilities arise from the business of medical malpractice as
31 that term is defined in subsection (b) of section five thousand five
32 hundred one of this chapter shall instead be required to maintain at all
33 times twice the minimum surplus to policy holders required to be author-
34 ized to write medical malpractice in this state; or
35 (3) an insurer initially licensed on or after July first, nineteen
36 hundred eighty-two pursuant to article forty-one of this chapter, or
37 pursuant to article forty-two of this chapter as an accident and health
38 insurer, or pursuant to article sixty-one of this chapter as a recipro-
39 cal insurer, if such insurer is at least meeting the minimum surplus to
40 policyholders requirement or the minimum trusteed surplus requirement
41 imposed upon such insurer by the provisions of the article pursuant to
42 which it was initially licensed.
43 (d) The superintendent may revoke, suspend, or refuse to renew such
44 license if, after notice and a hearing, [he] the superintendent finds
45 that such action will protect the best interests of the people of this
46 state.
47 § 3. Section 6303 of the insurance law is amended to read as follows:
48 § 6303. Limitations. (a) The exemption [which] that may be granted
49 pursuant to this article shall apply only [if the business is underwrit-
50 ten and transacted from an] to an authorized insurer that maintains a
51 bona fide office within this state which has access to the underwriting
52 files for policies issued under this article; and [(i)]:
53 (1) the risk, as defined in regulations of the superintendent, produc-
54 es a minimum annual premium in excess of one hundred thousand dollars or
55 such higher amount as the superintendent may prescribe by regulation;
56 [or (ii)]
S. 4068--A 3
1 (2) the coverage is for a risk or class of risks which is of an unusu-
2 al nature, a high loss hazard, or difficult to place, pursuant to a list
3 promulgated or amended by the superintendent; or
4 (3) the policy is issued to a large commercial insured that employs or
5 retains a risk manager to assist in the negotiation and purchase of a
6 policy exempted under this article. Policy forms issued pursuant to
7 this paragraph which have not been previously filed with the superinten-
8 dent shall be provided to the superintendent for informational purposes
9 as soon as practicable within thirty days of the date upon which the
10 policy form is delivered to the policyholder.
11 (b) [All policies] For the purposes of this section:
12 (1) "Large commercial insured" means an entity that generates annual
13 commercial risk insurance premium in excess of twenty-five thousand
14 dollars with respect to the kinds of insurance specified in paragraphs
15 four through fourteen, sixteen, seventeen, nineteen through twenty-two
16 and twenty-seven of subsection (a) of section one thousand one hundred
17 thirteen of this chapter and:
18 (i) has a net worth of at least seven million five hundred thousand
19 dollars as of the insured's fiscal year end immediately preceding the
20 policy's effective date;
21 (ii) has gross assets exceeding ten million dollars and a net worth of
22 at least one million five hundred thousand dollars as of the insured's
23 fiscal year end immediately preceding the policy's effective date;
24 (iii) is a for-profit business entity that generates annual gross
25 revenues exceeding fifteen million dollars, and has a net worth of at
26 least one million five hundred thousand dollars as of the insured's
27 fiscal year end immediately preceding the policy's effective date;
28 (iv) is a for-profit business entity that has gross assets exceeding
29 ten million dollars and generates annual gross revenues exceeding
30 fifteen million dollars as of the insured's fiscal year end immediately
31 preceding the policy's effective date;
32 (v) is a not-for-profit organization or public entity with an annual
33 budget exceeding twenty million dollars for each of its three fiscal
34 years immediately preceding the policy's effective date;
35 (vi) has fifty employees or, together with its parent, subsidiaries
36 and affiliates, one hundred employees, as of the insured's fiscal year
37 end immediately preceding the policy's effective date; or
38 (vii) is a municipality with a population of fifty thousand or more
39 persons.
40 (2) "Risk manager" means a person who meets all of the following
41 requirements:
42 (A) the person is an employee of, or third-party consultant retained
43 by, the commercial policyholder;
44 (B) the person provides skilled services in loss prevention, loss
45 reduction, or risk and insurance coverage analysis, and purchase of
46 insurance;
47 (C) the person:
48 (i)(I) has a bachelor's degree or higher from an accredited college or
49 university in risk management, business administration, finance, econom-
50 ics, or any other field determined by the superintendent to demonstrate
51 minimum competence in risk management; and
52 (II)(aa) has three years of experience in risk financing, claims
53 administration, loss prevention, risk and insurance analysis, or
54 purchasing commercial lines of insurance; or
55 (bb) has:
S. 4068--A 4
1 (aaa) a designation as a chartered property and casualty underwriter
2 (in this clause referred to as a "CPCU") issued by the American Insti-
3 tute for CPCU/Insurance Institute of America;
4 (bbb) a designation as an associate in risk management (ARM) issued by
5 the American Institute for CPCU/Insurance Institute of America;
6 (ccc) a designation as certified risk manager (CRM) issued by the
7 National Alliance for Insurance Education & Research;
8 (ddd) a designation as a Risk and Insurance Management Society (RIMS)
9 fellow (RF) issued by the Global Risk Management Institute; or
10 (eee) any other designation, certification, or license determined by
11 the superintendent to demonstrate minimum competency in risk management;
12 (ii) (I) has at least seven years of experience in risk financing,
13 claims administration, loss prevention, risk and insurance coverage
14 analysis, or purchasing commercial lines of insurance; and
15 (II) has any one of the designations specified in subclauses (aaa)
16 through (eee) of subitem (bb) of clause (II) of item (i) of this subpar-
17 agraph;
18 (iii) has at least ten years of experience in risk financing, claims
19 administration, loss prevention, risk and insurance coverage analysis,
20 or purchasing commercial lines of insurance; or
21 (iv) has a graduate degree from an accredited college or university in
22 risk management, business administration, finance, economics, or any
23 other field determined by the superintendent to demonstrate minimum
24 competence in risk management.
25 (3) "Municipality" shall mean any county, city, town or village.
26 (c) Effective on the fifth January first occurring after the date of
27 the enactment of this subsection and each fifth January first occurring
28 thereafter, the amounts specified in paragraph one of subsection (b) of
29 this section may be adjusted to reflect the percentage change for such
30 five-year period in the consumer price index for all urban consumers
31 published by the Bureau of Labor Statistics of the department of labor.
32 The superintendent may conduct a public hearing to determine whether
33 such increase is necessary.
34 (d) Every policy issued pursuant to the provisions of this article
35 shall contain a notice to the policyholder that the rate and policy form
36 are not subject to the filing requirements of this state and such other
37 notices required by the superintendent pursuant to regulation.
38 [(c)] (e) The superintendent may by regulation prescribe limitations
39 on the total amount of business [which] that an insurer may transact
40 pursuant to this article or reimpose filing requirements where and to
41 the extent that the superintendent deems it in the interest of the poli-
42 cyholders.
43 § 4. Subsection (b) of section 2307 of the insurance law, as amended
44 by chapter 508 of the laws of 1998, is amended to read as follows:
45 (b) (1) Except as otherwise provided herein, no policy form shall be
46 delivered or issued for delivery unless it has been filed with the
47 superintendent and either [he] the superintendent has approved it, or
48 thirty days have elapsed and [he] the superintendent has not disapproved
49 it as misleading or violative of public policy.
50 (2) After notice and hearing to the insurer or rate service organiza-
51 tion which submitted a policy form for approval, the superintendent may
52 withdraw approval of such form on finding that the use of such form is
53 contrary to the legal requirements applicable at the time of withdrawal.
54 The effective date of the withdrawal of approval shall be prescribed by
55 the superintendent but shall be not less than ninety days after notice
56 of withdrawal.
S. 4068--A 5
1 (3) With regard to residual value insurance, policy forms and any
2 amendments thereto shall be filed with the superintendent within thirty
3 days of their use by the insurer. For purposes of this subsection,
4 "residual value insurance" shall have the same meaning as set forth in
5 paragraph twenty-two of subsection (a) of section one thousand one
6 hundred thirteen of this chapter, provided however, for the purposes of
7 this subsection such insurance shall only be utilized for commercial
8 purposes, and shall not include personal lines of insurance as defined
9 in paragraph two of subsection (a) of section three thousand four
10 hundred twenty-five of this chapter or any commercial auto insurance,
11 and, provided further that applicants for such insurance shall sign a
12 statement that the applicant has an appropriate level of knowledge and
13 understanding of the use of residual value insurance.
14 (4) Policy forms for inland marine risks where the rates for such
15 risks by general custom of the business are not written according to
16 manual rates or rating plans shall not be filed pursuant to paragraph
17 one of this subsection, unless the superintendent directs that they be
18 filed.
19 § 5. This act shall take effect immediately.
