Extends the effectiveness of provisions of law establishing an excess line advisory organization until 2019.
TITLE OF BILL: An act to amend chapter 630 of the laws of 1988, amending the insurance law relating to establishing an excess line advisory organization, in relation to the effective date thereof
PURPOSE: To extend the statutory authority of the Excess Line Association of New York ("ELANY")
SUMMARY OF PROVISIONS: Section 1 of the bill would amend the language from Section 5 of Chapter 630 of the Laws of 1988, the enabling legislation for ELANY, to extend its "sunset" date of July 1, 2014 to July 1, 2019. Section 2 of the bill sets forth an immediate effective date.
EXISTING LAW: Chapter 630 of the Laws of 1988 amended the Insurance Law to add Section 2130, the enabling legislation for ELANY. Section 5 of Chapter 630 currently provides that Section 2130 would cease to be of any force or effect after July 1, 2014.
JUSTIFICATION: Established by the Legislature in 1988, ELANY, which is financially self-sustaining, quickly became an indispensable component in the regulation of the excess line market. The excess line market is a small, but extremely important marketplace which serves as an "incubator" for innovative insurance products, as well as a market for hard-to-place risks. Foremost among ELANY's accomplishments has been its success in collecting and processing insurance data and monitoring the solvency of insurers in the excess line marketplace. These activities are of paramount importance to a properly functioning excess line market in New York.
As a centralized source of information, ELANY has greatly contributed to the Department of Financial Services' (aka Insurance Department) knowledge of a vital segment of New York's insurance market. ELANY also assists the Department of Financial Services in the calculation and collection of excess line premium taxes. In fulfilling its statutory mandate to notify the Superintendent if ELANY believes that an unauthorized insurer does not meet the standards of eligibility imposed by New York, ELANY has compiled extensive data on every foreign and alien insurer writing business in New York, while monitoring their activities. Based on ELANY's recommendations, the Department of Financial Services has prohibited the placement of risks with a number of insurers that were determined by ELANY not to meet the minimum financial criteria required by New York law. In this manner, ELANY has protected the interests of New York State consumers by ensuring that their insurance needs are met by the most financially secure insurers possible.
In addition, ELANY has taken various measures directed at increasing compliance by excess line licensees with New York's excess line law. As part of its effort to achieve this goal, ELANY has created an electronic platform for the submission and processing of excess line transactions for use by its member brokers. The use of the electronic system has reduced frictional cost and improved efficiency and productivity for both member brokers and ELANY staff EL ANY publishes newsletters, bulletins and compliance advisors which describe and
explain the complexities and interaction of New York's excess line law. Department of Financial Services regulations and various procedures relating to placing insurance in New York's excess line market. ELANY also maintains an extensive website of organized information and data which serves as both an educational and compliance tool for producers.
In fact ELANY recently added a Video Library to its website which currently contains nine Education/Training videos. Finally, ELANY has held numerous educational sessions as a Department of Financial Services-certified educational provider (for both individuals and groups).
Extending ELANY's statutory authority for another five years is essential to the ability of ELANY to attract capable personnel and executives in order to maintain the organization's commitment to excellence and to make the significant investments in technology that will enable ELANY to keep pace with developments in the excess line marketplace. Based on its excellent performance record over its twenty plus year existence, it is clear that ELANY has demonstrated its importance to the insurance marketplace. At this juncture, therefore, there is absolutely no reason to why ELANY's role in helping to regulate the excess line market should not be substantially extended.
LEGISLATIVE HISTORY: New bill
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 3857 2013-2014 Regular Sessions IN SENATE February 25, 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 chapter 630 of the laws of 1988, amending the insurance law relating to establishing an excess line advisory organization, in relation to the effective date thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 5 of chapter 630 of the laws of 1988, amending the insurance law relating to establishing an excess line advisory organ- ization, as amended by chapter 130 of the laws of 2008, is amended to read as follows: S 5. This act shall take effect January 1, 1989 and shall cease to be of any force or effect after July 1,
2019. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09047-01-3