S04068 Summary:

BILL NOS04068A
 
SAME ASNo same as
 
SPONSORSEWARD
 
COSPNSR
 
MLTSPNSR
 
Amd SS6301, 6302, 6303 & 2307, Ins L
 
Exempts large commercial insureds from certain rate and policy form requirements.
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S04068 Actions:

BILL NOS04068A
 
03/16/2011REFERRED TO INSURANCE
06/02/2011AMEND AND RECOMMIT TO INSURANCE
06/02/2011PRINT NUMBER 4068A
06/06/20111ST REPORT CAL.1023
06/07/20112ND REPORT CAL.
06/13/2011ADVANCED TO THIRD READING
06/24/2011COMMITTED TO RULES
01/04/2012REFERRED TO INSURANCE
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S04068 Floor Votes:

There are no votes for this bill in this legislative session.
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S04068 Text:



 
                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.
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