What's happening
This bill amends insurance law to remove the requirement that exempted business must be underwritten and transacted from an office within New York State.
Why it matters
Makes it easier for insurance companies to offer certain tailored policies to New York customers even if their underwriting and transaction operations are located outside of New York State. , potentially increasing market competition and access to specialized products.
May lower operational costs for insurers and encourage national or global companies to do business in New York. , as they are no longer required to maintain a physical office in the state just to serve exempted business clients.
Could benefit businesses seeking large or hard-to-place insurance policies. by broadening their options for coverage and potentially reducing premiums or improving service, since more insurers may participate in the market.
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Who cares
Headline styles
Ease Rules for Out-of-State Insurers
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Referred to insurance
- Delivered to assembly
- Passed senateVote 59–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.72
- Referred to insurance
- Returned to senate
- Died in assembly
- Referred to insurance
- Delivered to assembly
- Passed senateVote 62–0
Show 4 earlier actions
- Advanced to third reading
- 2nd report cal.
- 1st report cal.250
- Referred to insurance
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3736
2019-2020 Regular Sessions
IN SENATE
February 13, 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 exemption from filing requirements only with respect to rates and policy forms
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (a) of section 6303 of the insurance law, as amended by chapter 490 of the laws of 2011, paragraph 3 as amended by chapter 75 of the laws of 2013 and the opening paragraph of paragraph 3 as amended by chapter 438 of the laws of 2018, is amended to read as follows:
(a) The exemption that may be granted pursuant to this article shall apply only if [the business is underwritten and transacted from an office within this state; and]:
(1) the risk, as defined in regulations of the superintendent, produces a minimum annual premium in excess of one hundred thousand dollars or such higher amount as the superintendent may prescribe by regulation;
(2) the coverage is for a risk or class of risks which is of an unusual nature, a high loss hazard, or difficult to place, pursuant to a list promulgated or amended by the superintendent; or
(3) until June thirtieth, two thousand twenty-three, the policy, other than a medical malpractice insurance policy, is issued to a large commercial insured that employs or retains a special risk manager to assist in the negotiation and purchase of a policy exempted under this article, provided, however, that:
(A)(i) the special risk manager is not employed by the insurer issuing the policy or any person in the insurer's holding company system; and
(ii) the special risk manager is licensed as an insurance producer in this state pursuant to article twenty-one of this chapter, unless exempted from licensing therein; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09808-01-9
S. 3736 2
(B) a policy form that has not been previously filed with the superintendent shall be filed with the superintendent for informational purposes within three business days after first delivery of a policy using such form, but no later than sixty calendar days after the inception date of such policy.
§ 2. This act shall take effect immediately.
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 exemption from filing requirements only with respect to rates and policy forms
Purpose
The purpose of the bill is to modernize the insurance law by allowing insurers to take advantage of the Free Trade Zone regardless of whether or not they maintain a physical office in the state.
Summary of provisions
The bill amends Section 6303 (a) of the insurance law to repeal the provision which requires that business must be underwritten and trans- acted from an office within the state in order to be eligible for place- ment in the Free Trade Zone.
Justification
The Free Trade Zone (FTZ) is a useful tool for insurers that provides some flexibility from the usual rate and form filing process as it relates to larger, sophisticated or highly specialized risks. Unfortu- nately, the FTZ fails to be utilized to its fullest potential because current law requires that, in order to be eligible to place a risk in the FTZ, the business must be underwritten and transacted from an office within New York State. This means that an insurer must maintain a phys- ical office location in the state, even though they are duly licensed to write in the NY admitted market.
In the context of today's global economy, this requirement is unneces- sary and fails to reflect advancements in technology and innovation which makes it possible for business to be transacted from practically anywhere in the world. The intent of the FTZ is to allow greater freedom to insureds that are sophisticated enough to understand and negotiate their own insurance needs. They simply do not warrant the same level of protection from DFS as an individual consumer or small business. If an insured is sophisticated enough to assume responsibility for their own insurance needs (often working with risk managers, agents, or brokers), the location in which the policy is underwritten is irrelevant. In today's era of advancing technology and innovation, the most important factor for businesses is that they can readily access enhanced insurance products that keep pace with their evolving risks. The physical location where the insurance transaction occurs simply does not come into the equation.
Additionally, the FTZ is beneficial because it makes it possible for authorized insurers to compete more effectively with the non-admitted market. However, the physical office requirement has just the opposite effect, penalizing authorized insurers who do not have a physical pres- ence and incentivizing them to enter the non-admitted market.
The proposed legislation will lead to a more dynamic and modernized regulatory system that better reflects the current global financial services marketplace. This in turn will give businesses purchasing insurance a broader range of competitive price options and insurance
products that can be readily customized to fit their company's risk profile.
Legislative history
S.4654 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.