Relates to extending authorization for certain exemptions from filing requirements

Summary of provisions

Section 1 of the bill would amend Insurance Law § 6303(a)(3) to extend until June 30, 2015, the exemption from rate and form filing requirements for certain property/casualty policies written in the free trade zone and to repeal the requirement that insurers file a certificate of insurance with the Department of Financial Services within one business day of writing such a policy.

Section 2 would provide an immediate effective date.

Existing law

Insurance Law § 6303(a)(3) provides an exemption from rate and form filing requirements for certain property/casualty policies(other than medical malpractice insurance policies; workers' compensation insurance policies, and certain other kinds of insurance policies) issued to a "large commercial insured" (defined in law) that employs or retains a special risk manager to assist in the negotiation and purchase of a policy exempted under Article 63, provided, however, that: (1) the special risk manager is not employed by the insurer issuing the policy or any person in the insurer's holding company system;(2) the special risk manager is licensed as an insurance producer in New York pursuant to Article 21 of the Insurance Law, unless otherwise exempt; (3) the insurer files with the Superintendent of Financial Services (Superintendent) a certificate of insurance evidencing the existence and terms of the policy within one business day of binding the insurance coverage; and (4) policy forms that have not been previously filed with the Superintendent are filed with the Superintendent for informational purposes within three business days after first delivery of a policy using such form, but no later than 60 calendar days after the inception date of such policy. This paragraph sunsets on June 30,2013.

Prior legislative history

This is a new bill that would extend an exemption first enacted in 2011.

Statement in support

The predecessor to Article 63 of the Insurance Law was enacted in 1978 to encourage insurance producers to place their large or unusual risks in the authorized New York market. At that time, overseas and out-of-state companies, such as Lloyd's of London, wrote the great

majority of these risks. Article 63 was intended to allow New York-authorized insurers to compete more effectively with the London and out-of-state markets.

Subsequently, L. 2011, c. 490 Chapter 490, amended Insurance Law :5 6303(a) to add a new exemption from rate and form filing requirements until June 30. 2013 for certain property/casualty policies (other than medical malpractice insurance policies, workers' compensation insurance policies, and certain other kinds of insurance policies) issued to a "large commercial insured" (as that term is defined in the statute) that employs or retains a special risk manager to assist in the negotiation and purchase of a policy exempted under Article 63 of the Insurance Law.

This exemption was added to expand the ability of New York-authorized insurers to compete more effectively with the London and out-of-state markets, by permitting them to apply this exemption, so long as the special risk manager meets certain qualifications and the insurer makes certain informational filings. At the same time, Chapter 490 provided safeguards by allowing the Superintendent to re-impose filing and approval requirements where and to the extent that the Superintendent deems it in the interest of policyholders.

This bill would extend the sunset date of this exemption to June 30, 2015 and amend the filing requirements to continue the expanded ability of New York-authorized insurers to compete more effectively with the London and out-of-state markets.

Fiscal implications

None to the State.

Effective date

This bill would take effect immediately.