Amd S3425, Ins L; amd S12, Chap 42 of 1996; amd S23, Chap 136 of 2008
Directs superintendent of financial services to amend rules and regulations with respect to homeowners' policies; also directs study of certain facets of insurance industry including, but not limited to the profitability of the property/casualty insurance in coastal areas.
STATE OF NEW YORK
________________________________________________________________________
3068
2013-2014 Regular Sessions
IN SENATE
January 29, 2013
___________
Introduced by Sens. KLEIN, KRUEGER, PARKER, SMITH -- 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 homeowners' insurance
policies; to amend chapter 42 of the laws of 1996, amending the insur-
ance law relating to homeowners' insurance and a temporary panel on
homeowners' insurance coverage, in relation to the panel's evaluation
regarding coastal areas; and to amend chapter 136 of the laws of 2008,
amending the insurance law relating to extending the effectiveness of
certain stand-by powers of the New York property insurance underwrit-
ing association, in relation to attracting more competitors to the
coastal counties
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraphs (C) and (D) of paragraph 2 of subsection (o)
2 of section 3425 of the insurance law, as added by chapter 42 of the laws
3 of 1996, are amended to read as follows:
4 (C) The superintendent shall promulgate rules and regulations to
5 establish standards for the definition of "materially reduce its volume
6 of policies" as used in this paragraph.
7 (i) Such definition shall require that a plan be filed with the super-
8 intendent if the insurer plans to reduce the net number of homeowners
9 insurance policies as defined in subsection (a) of section twenty-three
10 hundred fifty-one of this chapter by twenty percent or more, or plans to
11 reduce the net number of such policies it writes by five hundred, which-
12 ever is greater, within a five year period of time; provided, however,
13 that if an insurer is not otherwise required to file a plan pursuant to
14 this subparagraph, a plan shall be filed if the insurer plans to reduce
15 the net number of such policies it has in force in a twelve month period
16 by four percent or more or the net number of such policies it writes by
17 one hundred, whichever is greater.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07718-01-3
S. 3068 2
1 (ii) Provided further, such definition of the term "materially reduce
2 its volume of policies" shall mean if an insurer plans, in any zip code
3 or rating territory contained partially or entirely within coastal
4 areas, to reduce the net number of homeowners' insurance policies as
5 defined in subsection (a) of section two thousand three hundred fifty-
6 one of this chapter by eight percent or more, or plans to reduce the net
7 number of such policies it writes by fifty, whichever is greater, within
8 a five year period of time; provided, however, that if an insurer is not
9 otherwise required to file a plan pursuant to this subparagraph, a plan
10 shall be filed if the insurer plans to reduce the net number of such
11 policies it has in force in a twelve month period by two percent or more
12 or the net number of such policies it writes by twenty, whichever is
13 greater. For the purposes of this subparagraph the term "coastal areas"
14 shall mean those areas that are within one mile of a saltwater ocean,
15 sound, inlet or bay in the counties of the Bronx, Kings, Nassau, Queens,
16 Richmond, Suffolk and Westchester.
17 The provisions of this subparagraph shall not apply to policies
18 cancelled or nonrenewed by the insured or policies not renewed or
19 cancelled pursuant to subparagraph (A), (B), (C), (D) or (E) of para-
20 graph two of subsection (c) of this section.
21 (D) The superintendent shall promulgate rules and regulations to
22 establish standards to approve such an application and to define "mini-
23 mizes market disruption." Such definition of the term "minimizes market
24 disruption" shall include an analysis of: (i) the ability of a holder of
25 a homeowner's insurance policy who has been cancelled or terminated in a
26 coastal area to readily obtain comparable replacement homeowners' cover-
27 ages at relatively comparable premium rates in the private insurance
28 market; and (ii) the adverse effects that such cancellations may have on
29 captive agents and their insurance agencies, and the mitigation measures
30 that can be undertaken by such insurers to safeguard the business pros-
31 pects of such captive agents.
32 § 2. Paragraphs (h) and (i) of subdivision 1 of section 12 of chapter
33 42 of the laws of 1996, amending the insurance law relating to homeown-
34 ers' insurance and a temporary panel on homeowners' insurance coverage,
35 as amended by chapter 136 of the laws of 2008, are amended and a new
36 paragraph (j) is added to read as follows:
37 (h) an evaluation of insurer preparedness in the recovery, rebuilding
38 and renewal processes following weather-related losses; [and]
39 (i) an evaluation of public awareness of storm risks and programs to
40 educate the public of storm risks and mitigation techniques[.]; and
41 (j) an evaluation of the profitability of insurers that write homeown-
42 er's insurance in coastal areas of this state and the profits or losses
43 such insurers sustain by writing coverages along this state's coastal
44 areas. The panel shall specifically analyze the reasons why and rate at
45 which insurers may be withdrawing from the coastal homeowners' insurance
46 market and inordinately cancelling such policies or substantially
47 increasing insurance premium rates in such market. Further, the panel
48 shall study the cost of obtaining comparable replacement homeowner's
49 coverage for those insureds who have been cancelled in such coastal
50 areas. For the purposes of this paragraph, the term coastal homeowners'
51 insurance market shall mean those areas that are within one mile of a
52 saltwater ocean, sound, inlet or bay in the counties of the Bronx,
53 Kings, Nassau, Queens, Richmond, Suffolk, and Westchester.
54 § 3. Subdivision (a) of section 23 of chapter 136 of the laws of 2008,
55 amending the insurance law relating to extending the effectiveness of
56 certain stand-by powers of the New York property insurance underwriting
S. 3068 3
1 association, as further amended by section 104 of part A of chapter 62
2 of the laws of 2011, is amended to read as follows:
3 (a) The superintendent of financial services shall implement a program
4 designed to attract more competitors to the state's homeowners' insur-
5 ance market particularly with respect to those communities that are
6 within one mile of a saltwater ocean, sound, inlet or bay in the coun-
7 ties of the Bronx, Kings, Nassau, Queens, Richmond, Suffolk, and West-
8 chester. The program shall include, but shall not be limited to:
9 (1) identifying, contacting and soliciting feedback from national,
10 regional and other insurance carriers not currently writing homeowners
11 insurance in the state to determine their interest in selling homeowners
12 insurance in the state;
13 (2) adopting specific measures to encourage such insurers to sell
14 homeowners' insurance in the state; and
15 (3) documenting those issues or concerns such insurers may cite as
16 barriers to selling homeowners insurance in the state.
17 § 4. This act shall take effect on the first of January next succeed-
18 ing the date on which it shall have become a law.
