Permits insurers to make available multiple rating programs for commercial insurance within the same company.
Ayes (60): Adams, Addabbo, Avella, Ball, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Espaillat, Farley, Felder, Flanagan, Fuschillo, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Hoylman, Kennedy, Klein, Lanza, Larkin, Latimer, LaValle, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Tkaczyk, Valesky, Young, Zeldin
Excused (3): Krueger, Libous, Sanders
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 commercial 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. Obviously, 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 legislation would similarly allow insurers to make available multiple rating plans for commercial lines without having to form a subsidiary or affiliate company. To remain competitive, insurance companies, both commercial and personal lines 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. This bill allows insurers on the commercial lines side to adopt these innovations in the most efficient 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 6454 of 2012
FISCAL IMPLICATIONS: None
EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall have become a law.
STATE OF NEW YORK ________________________________________________________________________ 2891 2013-2014 Regular Sessions IN SENATE January 24, 2013 ___________Introduced by Sen. 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 permitting insurers to make available multiple rating programs for commercial insurance with- in the same company THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, 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: 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 OR SECTION THREE THOU- SAND 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 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. LBD06651-01-3