What's happening
This bill allows certain commercial insurance coverage to be placed with unauthorized insurers without the usual diligent effort requirement and simplifies the related affidavit process.
Why it matters
Facilitates access to specialized commercial insurance. by allowing retail brokers to place coverage with unaffiliated wholesale excess line brokers—without first having to demonstrate that authorized insurers declined the risk—potentially speeding up coverage for complex or hard-to-insure commercial clients.
Reduces administrative burden. for brokers by simplifying the affidavit process: when exempt from the diligent effort requirement, brokers no longer need to list multiple declinations or provide detailed documentation, making the process more efficient and less costly.
Clarifies definitions and relationships. between retail and wholesale brokers, including what constitutes “unaffiliated” brokers, aiming to prevent conflicts of interest and ensure that the exemption only applies in arms-length transactions.
Targets only commercial lines insurance. , meaning individual consumers (e.g., homeowners or auto policyholders) are unaffected; this change is aimed specifically at streamlining insurance placements for businesses with more complex or unusual insurance needs.
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Who cares
Headline styles
Ease Insurance Broker Rules
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to insurance
- Delivered to assembly
- Passed senateVote 58–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.288
- Referred to insurance
- Returned to senate
- Died in assembly
- Referred to insurance
- Delivered to assembly
- Passed senateVote 58–0
Show 6 earlier actions
- Advanced to third reading
- 2nd report cal.
- 1st report cal.461
- Print number 769a
- Amend and recommit to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ease Broker Insurance Rules
In Assembly Committee · Insurance · Sponsor Pamela J. Hunter
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
769--A
2019-2020 Regular Sessions
IN SENATE (Prefiled)
January 9, 2019
Introduced by Sens. BRESLIN, BROOKS -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the insurance law, in relation to permitting certain insurance coverage to be placed by licensed excess line broker with unauthorized insurers without regard to the diligent effort requirement and simplifying the excess line insurance placement affidavit requirements
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (A) of paragraph 3 of subsection (b) of section 2118 of the insurance law, as amended by section 12 of part I of chapter 61 of the laws of 2011, is amended to read as follows:
(A) Except as provided in subparagraph (F) and subject to subparagraph (C) of this paragraph, submission of insurance documents to the excess line association shall be accompanied by a statement subscribed to, and affirmed by, the licensee or sublicensee as true under the penalties of perjury that, after diligent effort, the full amount of insurance required could not be procured, from authorized insurers, each of which is authorized to write insurance of the kind requested and which the licensee has reason to believe might consider writing the type of coverage or class of insurance involved, and further showing that the amount of insurance procured from an unauthorized insurer is only the excess over the amount procurable from an authorized insurer. The licensee, however, shall be excused from affirming that a diligent effort, as defined above, was made to procure the coverage from authorized insurers if the licensee's affidavit is accompanied by the affidavit of another broker involved in the placement affirming as true under the penalties of perjury that, after diligent effort by the affirming broker, the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06625-03-9
S. 769--A 2
required insurance could not be procured from an authorized insurer which the affirming broker had reason to believe might consider writing the type of coverage or class of insurance involved. The licensee and the affirming broker shall be excused from affirming that a diligent effort was made if the superintendent determines, pursuant to paragraph four of this subsection, that no declinations are required. Notwithstanding anything to the contrary contained in this chapter, where a retail insurance broker seeks to procure or place commercial lines insurance through an unaffiliated wholesale excess line insurance broker, both the retail insurance broker and the wholesale excess line insurance broker shall be excused from making any diligent effort otherwise required by this article.
§ 2. Subparagraph (C) of paragraph 3 of subsection (b) of section 2118 of the insurance law, as amended by chapter 684 of the laws of 1993, is amended to read as follows:
(C) Every licensee, or affirming broker, in connection with the placement of each risk pursuant to this section not otherwise exempt from the diligent effort requirement, shall record on the affidavit required pursuant to subparagraph (A) of this paragraph the name and National Association of Insurance Commissioners (NAIC) code of each authorized insurer declining a risk and information relied upon that formed the basis of such licensee's or affirming broker's reason to believe that the authorized insurer might consider writing the type of coverage or class of insurance involved. No additional diligent effort information shall be reported on the affidavit.
§ 3. Section 2118 of the insurance law is amended by adding a new subsection (g) to read as follows:
(g) (1) For the purposes of this section:
(A) a "retail insurance broker" means an insurance broker licensee who directly deals with an insured;
(B) a "wholesale excess line insurance broker" means the licensed excess line insurance broker from whom or through whom the retail insurance broker has procured excess line coverage on behalf of the insured; and
(C) "commercial lines insurance" means any policy of insurance not defined as a "covered policy" in subsection (a) of section three thousand four hundred twenty-five of this chapter.
(2) A retail insurance broker and a wholesale excess line insurance broke are unaffiliated if one does not control, is not controlled by, or is not under common control with the other. One has control over the other if the broker directly or indirectly or acting through one or more other persons owns, controls, or has the power to vote twenty-five percent or more of any class of voting securities of the other; or controls in any manner the election of a majority of the directors or trustees of the other.
§ 4. This act shall take effect immediately, provided, however, that the amendments to subparagraphs (A) and (C) of paragraph 3 of subsection (b) of section 2118 of the insurance law made by sections one and two of this act shall not affect the expiration of such paragraph and shall be deemed to expire therewith.
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 certain insurance coverage to be placed by licensed excess line broker with unauthorized insurers without regard to the diligent effort requirement and simplifying the excess line insurance placement affidavit requirements
Purpose
To exempt commercial lines insurance transactions placed by wholesale insurance brokers from the excess line diligent effort requirement, and streamline the excess line affidavit regarding declinations that is filed by insurance brokers when placing excess line business.
Summary of provisions
Section 1. Subparagraph (A) of paragraph 3 of subsection (b) of section 2118 of the insurance law, as amended by section 12 of part I of chapter 61 of the laws of 2011 is amended to exempt commercial lines insurance transactions placed by both the resale insurance broker and the whole- sale insurance broker from the excess line diligent effort requirement.
Section 2. Subparagraph (C) of paragraph 3 of subsection (b) of section 2118 of the insurance law, as amended by chapter 684 of the laws of 1993 is amended to specify the diligent effort requirements under this legis- lation.
Section 3. Section 2118 of the insurance law is amended by adding a new subsection (g) to define "retail insurance broker," "wholesale excess line insurance broker," and "commercial lines insurance."
(2) Specifies the allowable affiliation between the retail insurance broker and a wholesale excess line insurance broker for the purposes of this section.
Section 4. Effective Date
Justification
This legislation would expedite service to insureds while maintaining the state's ability to protect consumers. The excess line market exists to insure risks which New York admitted insurers choose not to under- write because the risks are distressed, unique, volatile, or involve new businesses or coverages without loss history. The market is of vital importance to New York and nimble processing is essential to effectively serve consumer needs.
Approximately 17% of New York licensed insurance brokers place excess line business through wholesale brokers for an annual average of twen- ty-five transactions each. This is a strong indicator that retailers only go to wholesalers when the retailers admitted markets refuse to insure a risk.
However, the more complicated the affidavit, the more burdensome and time consuming it is for the wholesale excess line insurance broker to obtain it from the retail insurance broker for filing with ELANY. This
can lead to unnecessary delayed transactions which is to the consumer's detriment.
New York is one of only ten states that require the filing of declina- tion information, and the only state that requires twenty-one elements in total for three separate declinations.
Insurance brokers would still be required to file insurance coverage documents and affidavits with the Excess Line Association of New York (ELANY) and all elements would still be available to the Department of Financial Services upon request.
Legislative history
This is a new bill.
Fiscal implications
None.
Effective date
This act shall take effect immediately, provided, however, that the amendments to subparagraphs (A) and (C) of paragraph 3 of subsection (b) of section 2118 of the insurance law made by sections one and two of this act shall not affect the expiration of such paragraph and shall be deemed to expire therewith.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.