What's happening
This bill raises the policy threshold for insurers required to submit nonrenewal plans for automobile insurance from 750 to 2,500 policies.
Why it matters
Reduces regulatory burden for smaller insurers. By increasing the policy threshold from 750 to 2,500, more insurers will be exempt from the requirement to submit detailed nonrenewal plans, streamlining operations for companies with smaller market shares.
May encourage competition and market entry. The change could make it easier for new or small insurers to enter or exit the New York auto insurance market, potentially leading to increased competition and more choices for consumers.
Risk of less oversight for affected policyholders. With fewer insurers required to submit nonrenewal plans, there may be less regulatory scrutiny over how mass nonrenewals are handled, which could impact consumer protections for policyholders affected by such actions.
Could affect market stability in certain regions. If several small insurers choose to non-renew policies simultaneously without detailed regulatory review, some local markets could experience disruptions or temporary gaps in insurance availability.
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Who cares
Headline styles
Increase Auto Insurance Flexibility
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4969
2017-2018 Regular Sessions
IN SENATE
March 3, 2017
Introduced by Sen. SEWARD -- 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 expanding flexibility in the automobile insurance market for the benefit of policyholders
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (r) of section 3425 of the insurance law, as added by chapter 136 of the laws of 2008, is amended to read as follows:
(r) An insurer that has no more than [seven] two thousand five hundred [fifty] automobile insurance policies in-force [at last year-end] and intends to non-renew all of the policies shall submit to the superintendent a plan for the orderly nonrenewal of the policies. The proposed plan shall not become effective without the approval of the superintendent. The plan shall:
(1) describe the contemplated action;
(2) set forth the reasons for the action;
(3) describe the measures the insurer will take or has taken to minimize market disruption as set forth in subsection (o) of this section;
(4) explain why the action would not be detrimental to the interests of the people of this state; and
(5) provide any other information as the superintendent may require.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10423-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to expanding flexibility in the automobile insurance market for the benefit of policyholders
Purpose
Expand the flexibility for auto insurance companies to non-renew auto policies when the company has a small number of policies remaining and such nonrenewal will not impact the market.
Summary of provisions
Section 1 amends section 3425 (r) of the Insurance Law to allow an auto insurer who has no more than 2,500 policies in force and intends to non-renew all of the policies to submit a plan for the orderly non-renewal of the policies.
Section 2 is the effective date.
Justification
Corporate mergers, acquisitions and reorganizations sometimes leave companies that still have a small number of auto insurance policies in a position where they cannot leave the market in a timely manner. This impedes the ability of these companies to undertake new business in New York, to the detriment of the New York property and casualty insurance marketplace and consumers. This legislation would assist such companies in creating an orderly plan to non-renew their policies, often by arranging for another insurance company to agree to accept these policies. In addition, the auto insurance market is robust in New York and there is no scarcity of other insurers willing to write these policies.
As a result, this bill is needed to ensure a stable, competitive and vibrant property and casualty insurance market in New York, a market that will benefit New Yorkers.
Legislative history
New bill.
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.