What's happening
This bill raises the threshold for insurers required to submit nonrenewal plans for all automobile insurance policies from 750 to 2,500 policies.
Why it matters
Significantly increases the number of insurers exempt from filing nonrenewal plans. , allowing companies with up to 2,500 auto policies (up from 750) to exit the market without state-supervised transition plans—this could make it easier for smaller insurers to leave the market quickly.
May reduce regulatory oversight over market exits for a larger segment of the insurance market. , potentially increasing the risk of market disruption if multiple small or mid-sized insurers withdraw coverage simultaneously.
Could impact consumer protections for policyholders. whose insurer chooses to non-renew all policies, as fewer companies would need to explain their actions or plans to minimize negative effects, possibly leaving consumers with less warning or recourse.
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Who cares
Headline styles
Expand Auto Insurance Options
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3626
2019-2020 Regular Sessions
IN SENATE
February 11, 2019
Introduced by Sens. BRESLIN, 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.
LBD09805-01-9
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-rene- wal 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 poli- cies. 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 neededòto ensure a stable, competitive and vibrant property and casualty insurance market in New York, a market that will benefit New Yorkers.
Legislative history
S4969 of 2017-18.
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.