What's happening
This bill allows insurers to offer multiple rating programs for certain commercial insurance policies within the same company, with regulatory approval.
Why it matters
Expands insurer flexibility. By allowing insurers to offer multiple rating programs under one company for more types of commercial insurance, the bill could foster innovation and enable insurers to better tailor policies to the needs of different business clients.
Potential for more competitive pricing. Businesses may benefit from a wider range of pricing structures or coverage options, as insurers could offer distinct rating programs targeting different risk profiles or industry sectors.
Regulatory oversight remains strong. The requirement for prior approval from the superintendent ensures consumer protections and maintains regulatory scrutiny over new rating programs, aiming to prevent unfair practices or market instability.
Smoother policy transitions. Explicit rules for how policies are renewed or moved if a rating program is terminated provide clarity for both insurers and policyholders, reducing confusion and potential disruption for businesses relying on commercial insurance.
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Who cares
Commercial insurers
The bill would let insurers establish multiple rating programs within the same company for policies subject to Insurance Law section 3426, with the superintendent’s prior approval.
Businesses buying commercial insurance
Newly written policies could enter different approved rating programs depending on when they are written, and policies in a terminated program would have to be renewed in a subsequently approved program.
State insurance regulators
The superintendent would review proposed rating programs for the newly eligible policies and could issue rules to implement the expanded authority.
Headline styles
Allow Multiple Insurance Ratings
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.292
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5735
2019-2020 Regular Sessions
IN SENATE
May 14, 2019
Introduced by Sen. BRESLIN -- 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 permitting insurers to make available multiple rating programs for commercial insurance within the same company
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 2352 of the insurance law, as added by chapter 457 of the laws of 2011, is amended to read as follows:
§ 2352. Multiple rating programs. (a) Subject to the superintendent's prior approval, an insurer may establish more than one rating program within the same company for policies of insurance that are subject to section three thousand four hundred twenty-five or section three thousand four hundred twenty-six of this chapter; provided that:
(1) each rating program shall apply only to policies newly written on or after the effective date of the rating program but prior to the effective date of any subsequently approved rating program; provided however if an insurer terminates a rating program, then the insurer shall renew the policies that were subject to the terminated rating program in a subsequently approved rating program.
(2) the provisions of subsection (f) of section three thousand four hundred twenty-five and subsection (b) of section two thousand three hundred forty-nine of this chapter shall be applied to each rating program to which they are applicable separately.
(b) The superintendent may promulgate rules and regulations to implement the provisions of this section.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11711-01-9
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 permitting insurers to make available multiple rating programs for commercial insurance within the same company
Purpose
To permit property/casualty insurers to make available multiple rating programs within the same company for commercial lines insurance in the voluntary market.
Summary of provisions
Section 1: Amends Insurance Law Section 2352 to permit insurers to make available multiple rating programs within the same company for commer- cial lines insurance in the voluntary market.
Existing law
Section 2352 of the insurance law currently permits multiple rating plans for personal lines insurance.
Justification
In 2011, legislation was enacted to authorize insurers to make available multiple rating programs within the same company for personal lines insurance. Prior to the enactment of this law, if an insurance company wished to have more than one rating plan for personal lines insurance, they would be required to establish a separate subsidiary or affiliate company for the primary purpose of offering a new rating plan. Obvious- ly, this was a cumbersome and expensive process which added unnecessary costs to personal lines insurance. Accordingly, legislation was enacted to authorize multiple rating plans for personal lines insurance and remove these unnecessary burdens and costs associated with offering multiple rating plans for personal lines insurance.
The same rationale applies for commercial lines policies and this legis- lation would similarly allow insurers to make available multiple rating plans for commercial lines without having to form a subsidiary or affil- iate company. To remain competitive, insurance companies, both commer- cial and personal lines companies, need to be able to continually devel- op new rating plans that introduce different rating elements that allow them to better segment and price business. This bill allows insurers on the commercial lines side to adopt these innovations in the most effi- cient and cost effective way possible by authorizing the establishment of an additional rating plan within the same insurance company.
It should be noted that, as is currently the case for personal lines policies, each time a company develops a new rating plan, the plan would be subject to the prior approval of the Superintendent of Financial Services and would be provided only to new business customers.
Legislative history
S.1057 of 2016-16 S.2891 of 2013-14; S.6454 of 2012
Fiscal implications
None.
Effective date
This act shall take effect on the ninetieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.