Permits insurers to make available multiple rating plans for private passenger motor vehicle insurance within the same company.
Ayes (62): Adams, Addabbo, Alesi, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Espaillat, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Huntley, Johnson, Kennedy, Klein, Krueger, Kruger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, O'Mara, Oppenheimer, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin
BILL NUMBER:S2705A REVISED 06/20/11
TITLE OF BILL: An act to amend the insurance law, in relation to permitting insurers to make available multiple rating programs for private passenger motor vehicle insurance within the same company
PURPOSE: To permit property/casualty insurers to make available multiple rating programs within the same company for personal lines insurance in the voluntary market.
SUMMARY OF PROVISIONS: Section 1: Adds Insurance Law Section 2352 to permit insurers to make available multiple rating programs within the same company for personal lines insurance in the voluntary market. Such programs would be subject to prior approval by the superintendent. The superintendent is authorized to promulgate rules and regulations which may include criteria that would merit the superintendent's approval.
EXISTING LAW: Currently, insurance companies are prohibited from having more than one rating plan within the same company.
JUSTIFICATION: While insurance companies are prohibited from having more than one rating plan within the same company, in practice, this restriction only affects smaller, regional insurance companies that do business primarily in New York. Larger insurers, like those that operate on a national basis that want to offer multiple rating plans to their customers, simply establish a separate subsidiary or affiliate company that is set up for the primary purpose of offering the new rating plan. Since smaller insurers lack the financial resources to set up separate corporations each time they want to offer a new rating plan, they are placed at a competitive disadvantage by the prohibition.
To remain competitive, insurance companies need to be able to continually develop new rating plans that introduce different rating elements that allow them to better segment and price business.
Adding a new section to the insurance law that specifically authorizes multiple rating plans within the same company will level the playing field so that all insurers, not just large companies, can offer more than one rating plan to their customers. Each time a company develops a new plan, the plan would be provided only to new business customers, as is the current practice used when larger insurers establish a separate corporation to offer a new plan.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect on the 90th day after it shall become law.
STATE OF NEW YORK ________________________________________________________________________ 2705--A Cal. No. 89 2011-2012 Regular Sessions IN SENATE January 28, 2011 ___________Introduced by Sens. SEWARD, KLEIN -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the insurance law, in relation to permitting insurers to make available multiple rating programs for private passenger motor vehicle insurance within the same company THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The insurance law is amended by adding a new section 2352 to read as follows: S 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 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 SEPARATELY. (B) THE SUPERINTENDENT MAY PROMULGATE RULES AND REGULATIONS TO IMPLE- MENT THE PROVISIONS OF THIS SECTION. S 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. LBD08794-02-1