Bill S5811-2011

Exempts large commercial insureds from certain rate and policy form approval requirements

Exempts large commercial insureds from certain rate and policy form approval requirements.

Details

Actions

  • Aug 17, 2011: SIGNED CHAP.490
  • Aug 5, 2011: DELIVERED TO GOVERNOR
  • Jun 22, 2011: returned to senate
  • Jun 22, 2011: passed assembly
  • Jun 22, 2011: ordered to third reading rules cal.588
  • Jun 22, 2011: substituted for a8464
  • Jun 21, 2011: referred to insurance
  • Jun 21, 2011: DELIVERED TO ASSEMBLY
  • Jun 21, 2011: PASSED SENATE
  • Jun 21, 2011: ORDERED TO THIRD READING CAL.1445
  • Jun 17, 2011: REFERRED TO RULES

Votes

Memo

BILL NUMBER:S5811

TITLE OF BILL:

An act to amend the insurance law, in relation to exempting insurers from certain rate and policy form approval requirements with respect to policies issued to large commercial insureds and from certain policy form filing and approval requirements with respect to certain inland marine insurance policies

PURPOSE OF BILL:

This bill would exempt from certain rate and form approval requirements policies written in New York for large commercial insureds and special risks.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend Insurance Law § 6301(a) to require the Superintendent of Insurance (the "Superintendent") to permit exemptions from rate and form filing requirements for any of the kinds of insurance specified in § 6301(b). Section 1 also would amend § 6301(b) to allow an exemption pursuant to subsection (a) for the kinds of insurance set forth in Insurance Law § 1113(a)(4) through (14), (16), (17), (19) through (22), (27) and (29), and any kind of insurance substantially similar thereto. However, the Superintendent may not permit an exemption for insurance subject to Insurance Law §§ 2305(b) (except medical malpractice insurance) or 2328, insurance required to satisfy any financial responsibility requirement of New York, or a policy written on a group basis.

Section 2 would add a new Insurance Law § 6301(d), which would provide that nothing in Article 63 of the Insurance Law shall exempt any insurer, and any policy issued pursuant to Article 63, from any applicable provision or standard in the Insurance Law, regulations promulgated thereunder, or requirement of state law. Section 2 also would add a new Insurance Law § 6301(e), which defines "medical malpractice insurance" for the purposes of Article 63.

Section 3 would amend Insurance Law § 6302(b) to increase the special license fee to $2,000 per year. Section 2 also would amend § 6302(c) to state that a special license may be issued to: (1) an authorized insurer that maintains at all times a surplus to policyholders of at least 200% of the authorized control level as set forth in Article 13 of the Insurance Law, except that with respect to a policy issued to a large commercial insured pursuant to Insurance Law § 6303(a)(3), an authorized insurer that maintains at all times a surplus to policyholders of at least 250% of the authorized control level as set forth in Article 13 of the Insurance Law; (2) a United States branch that maintains at all times a trusteed surplus of at least 200% of the authorized control level as set forth in Article 13 of the Insurance Law, except that with respect to a policy issued pursuant to paragraph three of subsection (a) of section six

thousand three hundred three of this article, a United States branch that maintains at all times a trusteed surplus of at least 250% of the authorized control level as set forth in Article 13 of the Insurance Law; or (3) until June 30, 2014, a domestic property/casualty insurance company that maintains at all times a surplus to policyholders of at least twice the minimum surplus to policyholders required to be maintained for the kinds of insurance that it is authorized to write in New York, or an insurer licensed pursuant to Article 61 of the Insurance Law as a reciprocal insurer that maintains at all times a surplus to policyholders of at least the minimum surplus to policyholders required to be maintained for the kinds of insurance that it is authorized to write in New York, provided that the insurer has total direct premiums comprised of at least 90% medical malpractice insurance, assumes reinsurance premiums in an amount that is less than 5% of total direct premiums written, and writes 90% of its total direct premiums in New York.

Section 4 would amend Insurance Law § 6303 to add a new exemption until June 30, 2013 for a policy (other than a medical malpractice insurance policy) issued to a large commercial insured that employs or retains a special risk manager to assist in the negotiation and purchase of a policy exempted under Article 63 of the Insurance Law, provided, however, that: (1) the special risk manager is not employed by the insurer issuing the policy or any person in the insurer's holding company system; (2) the special risk manager is licensed as an insurance producer in New York pursuant to Article 21 of the Insurance Law, unless otherwise exempt; (3) the insurer must file with the Superintendent a certificate of insurance evidencing the existence and terms of the policy within one business day of binding the insurance coverage; and (4) policy forms that have not been previously filed with the Superintendent must be filed with the Superintendent for informational purposes within three business days after first delivery of a policy using such form, but no later than 60 calendar days after the inception date of such policy.

Section 4 also would amend § 6303 to add definitions of "large commercial insured," "special risk manager," and "municipality," and to permit the amounts specified in the definition of "large commercial insured" to be adjusted for inflation. In addition, Section 4 would amend § 6303 to require every policy issued pursuant to Article 63 (except with regard to a policy issued to a large commercial insured pursuant to Insurance Law § 6303(a)(3) to contain a notice to the policyholder that the rate and policy form are not subject to the filing requirements of New York and such other notices required by the Superintendent pursuant to regulation. Every policy issued to a large commercial insured must contain a notice to the policyholder that the rates are not subject to the filing requirements of New York and the policy forms are not subject to the approval requirements of New York, and such other notices required by the Superintendent pursuant to regulation.

Section 4 further would amend Insurance Law § 6303(e) to permit the Superintendent to re-impose filing or approval requirements to the extent that the Superintendent deems it in the interest of policyholders.

Section 5 would amend Insurance Law § 2307 by adding a new subsection (e), which states that policy forms for inland marine risks where the rates for such risks by general custom of the business are not written according to manual rates or rating plans shall not be filed pursuant to § 2307(b), unless the Superintendent directs that they be filed.

Section 6 would amend Insurance Law § 2320(d) to state that § 2320 shall apply to kinds of insurance or insurance activities the rates for which are not subject to prior approval and which are subject to Article 23 of the Insurance Law.

Section 7 would amend Insurance Law § 2321(f) to state that § 2321 shall apply to kinds of insurance or insurance activities the rates for which are subject to prior approval and which are subject to Article 23 of the Insurance Law.

Section 8 would amend Insurance Law § 3110 to state that whenever by the provisions of the Insurance Law an insurer may use a policy form without obtaining the prior approval of the Superintendent, the Superintendent may, after notice and hearing given to the insurer, order the insurer to cease using such policy form, if the use of such form is contrary to the requirements applicable to such form at the time of the effective date of such order. Any such order shall be effective at the expiration of such period, not less than ninety days after the giving of a notice of cessation, as the superintendent shall in such notice prescribe.

Section 9 states that the bill takes effect 90 days after it becomes law.

EXISTING LAW:

Currently, Insurance Law § 6301 permits limited exemptions from rate and policy form filing requirements for certain insurance authorized to be written in New York. However, exemptions are not permitted for the kinds of insurance set forth in Insurance Law 1113(a)(1) (life), (2) (annuities), (3) (accident and health), (15) (workers' compensation), (18) (title), or (23) (mortgage guaranty insurance), or for coverage for personal lines to natural persons for nonbusiness purposes; provided, however, that the Superintendent may allow an exemption for any risk pursuant to § 1113(a)(1), (2), or (3) or for personal risk insurance (other than private passenger, non-fleet automobile insurance) on the list maintained by the Superintendent for unusual nature, high loss hazard or difficult to place risks. Although an insurer may be exempt from filing and approval requirements, the insurer, and any policy issued pursuant to Article 63, is still subject to any applicable provision or standard in the Insurance Law, regulations promulgated thereunder, or requirement of state law.

Insurance Law § 6302 requires an authorized insurer to obtain a special license from the Superintendent as a condition precedent to obtaining an exemption. The annual fee for the special license is $1,000 and may only be issued to: (1) an authorized insurer that maintains at all times a surplus to policyholders of at least twice the minimum surplus to policyholders required to be maintained for

the kinds of insurance that it is authorized to write in New York; (2) a United States branch that maintains at all times a trusteed surplus of at least twice the minimum trusteed surplus required to be maintained for the kinds of insurance that it is authorized to write in New York; or (3) an insurer initially licensed on or after July 1, 1982 pursuant to Article 41, 42, or 61 of the Insurance Law, if the insurer at least meets the minimum trusteed surplus requirement imposed upon the insurer by the provisions of the article pursuant to which it was initially licensed.

Insurance Law § 6303 states that the exemption that may be granted pursuant to Article 63 shall apply only if the business is underwritten and transacted from an office within New York; and (1) the risk, as defined in regulations of the Superintendent, produces a minimum annual premium in excess of $100,000 or such higher amount as the Superintendent may prescribe by regulation; or (2) the coverage is for a risk or class of risks that is of an unusual nature, a high loss hazard, or difficult to place, pursuant to a list promulgated or amended by the Superintendent. The Superintendent has promulgated 11 NYCRR 16 (Regulation 86) to implement the provisions of Article 63.

Insurance Law § 2307(b) prohibits a policy form from being delivered or issued for delivery if the Superintendent has disapproved it as being misleading or violative of public policy. Pursuant to § 2307, insurers must file all property/casualty policy forms for approval with the Superintendent, unless specifically exempted.

Moreover, Insurance Law § 2320(d) states that § 2320 does not apply to kinds of insurance or insurance activities the rates for which, pursuant to Insurance Law §§ 2305(a), 2328, or 2344, are not subject to prior approval, while Insurance Law § 2321(f) sets forth similar language with regard to rates that are subject to prior approval.

Insurance Law § 3110 states that whenever by the provisions of the Insurance Law the Superintendent is authorized to give approval of any form of insurance policy or contract, the Superintendent may, after notice and hearing given to the insurer that submitted such form for approval, withdraw an approval previously given, if the use of such form is contrary to the requirements applicable to such form at the time of such withdrawal. Any such withdrawal is effective at the expiration of such period, not less than ninety days after the giving of notice of withdrawal, as the Superintendent shall in such notice prescribe.

STATEMENT IN SUPPORT:

The Legislature enacted the predecessor section to Article 63 of the Insurance Law in 1978 to encourage insurance producers to place their large or unusual risks in the authorized New York market. At that time, overseas and out-of-state companies, such as Lloyd's of London, wrote the great majority of these risks. Article 63 was intended to allow New York-authorized insurers to compete more effectively with the London and out-of-state markets. The Superintendent promulgated 11 NYCRR 16 (Regulation 86), implementing Article 63.

This bill would expand the ability of New York-authorized insurers to compete more effectively with the London and out-of-state markets, by

permitting them to apply an exemption under Article 63 for policies issued to a "large commercial insured" that employs or retains a "special risk manager" to assist in the negotiation and purchase of a policy, so long as the special risk manager meets certain qualifications and the insurer makes certain informational filings. At the same time, the bill would provide safeguards by allowing the Superintendent to re-impose filing and approval requirements where and to the extent that the Superintendent deems it in the interest of policyholders.

The bill also would exempt insurers from filing requirements with respect to inland marine insurance policies where the rates for the risks are not filed because by general custom of the business the rates are not written according to manual rates or rating plans. This exemption for the policy forms would follow the existing exemption for the rates contained in § 2310. Historically, the Superintendent has not required such policy forms to be filed. This amendment would clarify the requirements for inland marine insurance. The Superintendent would retain the right to impose filing requirements.

The bill would also clarify that Article 63, in accordance with the Department's longstanding interpretation, only exempts an insurer from the filing requirements of the Insurance Law, and that the insurer or any policy issued subject to Article 63 remains subject to all other applicable provisions or standards in the Insurance Law, regulations promulgated thereunder, and requirements of state law.

Collectively, these amendments would enhance the ability of insurers to underwrite large and unusual risks in the New York market, and would increase speed to market for certain insurance products not currently exempted. Passage of this legislation would enhance the competitiveness of New York's domestic insurers. The bill would also strengthen the financial requirements for an insurer to place coverage in the special risk market and enhances the Superintendent's authority to take appropriate action to protect insureds where the insurer does not abide by minimum standards and requirements. Additionally, the bill would facilitate more streamlined economic development in New York, as existing and emerging businesses that need to insure large or unusual risks would have quick access to the insurance products they need.

BUDGET IMPLICATIONS:

There are no budget implications from this bill.

EFFECTIVE DATE:

The bill would take effect 90 days after it becomes law.


Text

STATE OF NEW YORK ________________________________________________________________________ 5811 2011-2012 Regular Sessions IN SENATE June 17, 2011 ___________
Introduced by Sen. SEWARD -- (at request of the New York State Insurance Department) -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the insurance law, in relation to exempting insurers from certain rate and policy form approval requirements with respect to policies issued to large commercial insureds and from certain poli- cy form filing and approval requirements with respect to certain inland marine insurance policies THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsections (a) and (b) of section 6301 of the insurance law are amended to read as follows: (a) Notwithstanding any provision of this chapter, the superintendent shall, pursuant to regulations promulgated by [him] THE SUPERINTENDENT, permit exemption from filing requirements only with respect to rates and policy forms, where applicable, for any of the kinds of insurance [authorized to be written in this state] SPECIFIED IN SUBSECTION (B) OF THIS SECTION. (b) [No] AN exemption pursuant to subsection (a) hereof shall be permitted in relation to the kinds of insurance set forth in [paragraph one, two, three, fifteen, eighteen or twenty-three] PARAGRAPHS FOUR THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH TWENTY-TWO, TWEN- TY-SEVEN AND TWENTY-NINE, of subsection (a) of section one thousand one hundred thirteen of this chapter[, or to] AND SUCH INSURANCE AS THE SUPERINTENDENT DEEMS TO BE SUBSTANTIALLY SIMILAR TO ONE OF THE FOREGOING KINDS, EXCEPT NO EXEMPTION MAY BE PERMITTED FOR: (1) coverage for personal lines to natural persons for non-business purposes; (2) INSUR- ANCE SPECIFIED IN SUBSECTION (B) OF SECTION TWO THOUSAND THREE HUNDRED FIVE OF THIS CHAPTER, EXCEPT MEDICAL MALPRACTICE INSURANCE, OR SECTION TWO THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER; (3) INSURANCE REQUIRED TO SATISFY ANY FINANCIAL RESPONSIBILITY REQUIREMENT OF THIS
STATE; OR (4) A POLICY WRITTEN ON A GROUP BASIS. However, any risk pursuant to paragraph one, two or three of such subsection of such section of this chapter or personal lines risk (except [private passen- ger, non-fleet automobile] MOTOR VEHICLE insurance COVERAGE TO NATURAL PERSONS FOR NON-BUSINESS PURPOSES) shall be exempt pursuant to subsection (a) hereof if it is included by the superintendent on the list maintained by [him] THE SUPERINTENDENT pursuant to subsection (a) of section six thousand three hundred three of this article. S 2. Section 6301 of the insurance law is amended by adding two new subsections (d) and (e) to read as follows: (D) NOTHING IN THIS ARTICLE SHALL EXEMPT ANY INSURER, OR ANY POLICY ISSUED PURSUANT TO THIS ARTICLE, FROM ANY APPLICABLE PROVISION OR STAND- ARD IN THIS CHAPTER, REGULATIONS PROMULGATED THEREUNDER, OR OTHER REQUIREMENTS OF STATE LAW. (E) IN THIS ARTICLE, "MEDICAL MALPRACTICE INSURANCE" HAS THE MEANING SET FORTH IN SUBSECTION (B) OF SECTION FIVE THOUSAND FIVE HUNDRED ONE OF THIS CHAPTER. S 3. Section 6302 of the insurance law, paragraph 3 of subsection (c) as amended by chapter 534 of the laws of 1985, is amended to read as follows: S 6302. Special license. (a) An authorized insurer, as a condition precedent to the obtaining of such exemption, shall obtain a special license from the superintendent. (b) Before such special license shall be issued or renewed the prospective licensee shall file in the office of the superintendent an application in such form and supplements thereto as the superintendent prescribes. Such license shall be subject to annual renewal with an annual fee of [one] TWO thousand dollars. (c) Such license may only be issued to: (1) an authorized insurer [which] THAT maintains at all times a surplus to policyholders of at least [twice the minimum surplus to poli- cyholders required to be maintained for the kinds of insurance which it is authorized to write in this state] TWO HUNDRED PERCENT OF THE AUTHOR- IZED CONTROL LEVEL AS SET FORTH IN ARTICLE THIRTEEN OF THIS CHAPTER, EXCEPT THAT WITH RESPECT TO A POLICY ISSUED PURSUANT TO PARAGRAPH THREE OF SUBSECTION (A) OF SECTION SIX THOUSAND THREE HUNDRED THREE OF THIS ARTICLE, AN AUTHORIZED INSURER THAT MAINTAINS AT ALL TIMES A SURPLUS TO POLICYHOLDERS OF AT LEAST TWO HUNDRED FIFTY PERCENT OF THE AUTHORIZED CONTROL LEVEL AS SET FORTH IN ARTICLE THIRTEEN OF THIS CHAPTER; OR (2) a United States branch [which] THAT maintains at all times a trus- teed surplus of at least [twice the minimum trusteed surplus required to be maintained for the kinds of insurance which it is authorized to write in this state] TWO HUNDRED PERCENT OF THE AUTHORIZED CONTROL LEVEL AS SET FORTH IN ARTICLE THIRTEEN OF THIS CHAPTER, EXCEPT THAT WITH RESPECT TO A POLICY ISSUED PURSUANT TO PARAGRAPH THREE OF SUBSECTION (A) OF SECTION SIX THOUSAND THREE HUNDRED THREE OF THIS ARTICLE, A UNITED STATES BRANCH THAT MAINTAINS AT ALL TIMES A TRUSTEED SURPLUS OF AT LEAST TWO HUNDRED FIFTY PERCENT OF THE AUTHORIZED CONTROL LEVEL AS SET FORTH IN ARTICLE THIRTEEN OF THIS CHAPTER; or (3) [an insurer initially licensed on or after July first, nineteen hundred eighty-two pursuant to article forty-one of this chapter, or pursuant to article forty-two of this chapter as an accident and health insurer, or pursuant to article sixty-one of this chapter as a recipro- cal insurer, if such insurer is at least meeting the minimum surplus to policyholders requirement or the minimum trusteed surplus requirement imposed upon such insurer by the provisions of the article pursuant to
which it was initially licensed]
UNTIL JUNE THIRTIETH, TWO THOUSAND FOURTEEN, A DOMESTIC PROPERTY/CASUALTY INSURANCE COMPANY THAT MAINTAINS AT ALL TIMES A SURPLUS TO POLICYHOLDERS OF AT LEAST TWICE THE MINIMUM SURPLUS TO POLICYHOLDERS REQUIRED TO BE MAINTAINED FOR THE KINDS OF INSURANCE THAT IT IS AUTHORIZED TO WRITE IN THIS STATE, OR AN INSURER LICENSED PURSUANT TO ARTICLE SIXTY-ONE OF THIS CHAPTER AS A RECIPROCAL INSURER THAT MAINTAINS AT ALL TIMES A SURPLUS TO POLICYHOLDERS OF AT LEAST THE MINIMUM SURPLUS TO POLICYHOLDERS REQUIRED TO BE MAINTAINED FOR THE KINDS OF INSURANCE THAT IT IS AUTHORIZED TO WRITE IN THIS STATE, PROVIDED THAT THE DOMESTIC PROPERTY/CASUALTY INSURANCE COMPANY OR RECIP- ROCAL INSURER: (A) HAS TOTAL DIRECT PREMIUMS COMPRISED OF AT LEAST NINE- TY PERCENT MEDICAL MALPRACTICE INSURANCE; (B) ASSUMES REINSURANCE PREMI- UMS IN AN AMOUNT THAT IS LESS THAN FIVE PERCENT OF TOTAL DIRECT PREMIUMS WRITTEN; AND (C) WRITES NINETY PERCENT OF ITS TOTAL DIRECT PREMIUMS IN THIS STATE. (d) The superintendent may revoke, suspend, or refuse to renew such license if, after notice and a hearing, [he] THE SUPERINTENDENT finds that such action will protect the best interests of the people of this state. S 4. Section 6303 of the insurance law is amended to read as follows: S 6303. Limitations. (a) The exemption [which] THAT may be granted pursuant to this article shall apply only if the business is underwrit- ten and transacted from an office within this state; and [(i)]: (1) the risk, as defined in regulations of the superintendent, produc- es a minimum annual premium in excess of one hundred thousand dollars or such higher amount as the superintendent may prescribe by regulation; [or (ii)] (2) the coverage is for a risk or class of risks which is of an unusu- al nature, a high loss hazard, or difficult to place, pursuant to a list promulgated or amended by the superintendent; OR (3) UNTIL JUNE THIRTIETH, TWO THOUSAND THIRTEEN, THE POLICY, OTHER THAN A MEDICAL MALPRACTICE INSURANCE POLICY, IS ISSUED TO A LARGE COMMERCIAL INSURED THAT EMPLOYS OR RETAINS A SPECIAL RISK MANAGER TO ASSIST IN THE NEGOTIATION AND PURCHASE OF A POLICY EXEMPTED UNDER THIS ARTICLE, PROVIDED, HOWEVER, THAT: (A)(I) THE SPECIAL RISK MANAGER IS NOT EMPLOYED BY THE INSURER ISSUING THE POLICY OR ANY PERSON IN THE INSURER'S HOLDING COMPANY SYSTEM; AND (II) THE SPECIAL RISK MANAGER IS LICENSED AS AN INSURANCE PRODUCER IN THIS STATE PURSUANT TO ARTICLE TWENTY-ONE OF THIS CHAPTER, UNLESS EXEMPTED FROM LICENSING THEREIN; (B) THE INSURER SHALL FILE WITH THE SUPERINTENDENT A CERTIFICATE OF INSURANCE EVIDENCING THE EXISTENCE AND TERMS OF THE POLICY WITHIN ONE BUSINESS DAY OF BINDING THE INSURANCE COVERAGE; AND (C) A POLICY FORM THAT HAS NOT BEEN PREVIOUSLY FILED WITH THE SUPER- INTENDENT SHALL BE FILED WITH THE SUPERINTENDENT FOR INFORMATIONAL PURPOSES WITHIN THREE BUSINESS DAYS AFTER FIRST DELIVERY OF A POLICY USING SUCH FORM, BUT NO LATER THAN SIXTY CALENDAR DAYS AFTER THE INCEP- TION DATE OF SUCH POLICY. (b) [All policies] FOR THE PURPOSES OF THIS SECTION: (1) "LARGE COMMERCIAL INSURED" MEANS AN ENTITY THAT GENERATES ANNUAL COMMERCIAL RISK INSURANCE PREMIUM, OTHER THAN FOR MEDICAL MALPRACTICE INSURANCE, IN EXCESS OF TWENTY-FIVE THOUSAND DOLLARS WITH RESPECT TO THE KINDS OF INSURANCE SPECIFIED IN PARAGRAPHS FOUR THROUGH FOURTEEN, SIXTEEN, SEVENTEEN, NINETEEN THROUGH TWENTY-TWO, TWENTY-SEVEN AND TWEN- TY-NINE OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED THIRTEEN
OF THIS CHAPTER AND SUCH INSURANCE AS THE SUPERINTENDENT DEEMS TO BE SUBSTANTIALLY SIMILAR TO ONE OF THE FOREGOING KINDS AND: (A) HAS A NET WORTH OF AT LEAST SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; (B) HAS GROSS ASSETS EXCEEDING TEN MILLION DOLLARS AND A NET WORTH OF AT LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; (C) IS A FOR-PROFIT BUSINESS ENTITY THAT GENERATES ANNUAL GROSS REVEN- UES EXCEEDING FIFTEEN MILLION DOLLARS, AND HAS A NET WORTH OF AT LEAST ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; (D) IS A FOR-PROFIT BUSINESS ENTITY THAT HAS GROSS ASSETS EXCEEDING TEN MILLION DOLLARS AND GENERATES ANNUAL GROSS REVENUES EXCEEDING FIFTEEN MILLION DOLLARS AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; (E) IS A NOT-FOR-PROFIT ORGANIZATION OR PUBLIC ENTITY WITH AN ANNUAL BUDGET EXCEEDING TWENTY MILLION DOLLARS FOR EACH OF ITS THREE FISCAL YEARS IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; (F) HAS FIFTY EMPLOYEES OR, TOGETHER WITH ITS PARENT, SUBSIDIARIES AND AFFILIATES, ONE HUNDRED EMPLOYEES, AS OF THE INSURED'S FISCAL YEAR END IMMEDIATELY PRECEDING THE POLICY'S EFFECTIVE DATE; OR (G) IS A MUNICIPALITY WITH A POPULATION OF FIFTY THOUSAND OR MORE PERSONS. (2) "SPECIAL RISK MANAGER" MEANS A PERSON WHO MEETS ALL OF THE FOLLOW- ING REQUIREMENTS: (A) THE PERSON IS AN EMPLOYEE OF, OR THIRD-PARTY CONSULTANT RETAINED BY, THE LARGE COMMERCIAL INSURED; (B) THE PERSON PROVIDES SKILLED SERVICES IN LOSS PREVENTION, LOSS REDUCTION, OR RISK AND INSURANCE COVERAGE ANALYSIS AND ASSESSMENT, AND PURCHASE OF INSURANCE; AND (C) THE PERSON: (I)(I) HAS A BACHELOR'S DEGREE OR HIGHER FROM AN ACCREDITED COLLEGE OR UNIVERSITY IN RISK MANAGEMENT, BUSINESS ADMINISTRATION, FINANCE, ECONOM- ICS, OR ANY OTHER FIELD DETERMINED BY THE SUPERINTENDENT TO DEMONSTRATE MINIMUM COMPETENCE IN RISK MANAGEMENT; AND (II)(AA) HAS FIVE YEARS OF EXPERIENCE IN RISK FINANCING, LOSS PREVENTION, RISK AND INSURANCE COVERAGE ANALYSIS AND ASSESSMENT, OR PURCHASING COMMERCIAL RISK INSURANCE; AND (BB) HAS: (AAA) A DESIGNATION AS A CHARTERED PROPERTY AND CASUALTY UNDERWRITER (IN THIS CLAUSE REFERRED TO AS A "CPCU") ISSUED BY THE AMERICAN INSTI- TUTE FOR CPCU/INSURANCE INSTITUTE OF AMERICA; (BBB) A DESIGNATION AS AN ASSOCIATE IN RISK MANAGEMENT (ARM) ISSUED BY THE AMERICAN INSTITUTE FOR CPCU/INSURANCE INSTITUTE OF AMERICA; (CCC) A DESIGNATION AS CERTIFIED RISK MANAGER (CRM) ISSUED BY THE NATIONAL ALLIANCE FOR INSURANCE EDUCATION & RESEARCH; (DDD) A DESIGNATION AS A RISK AND INSURANCE MANAGEMENT SOCIETY (RIMS) FELLOW (RF) ISSUED BY THE GLOBAL RISK MANAGEMENT INSTITUTE; OR (EEE) ANY OTHER DESIGNATION, CERTIFICATION, OR LICENSE DETERMINED BY THE SUPERINTENDENT TO DEMONSTRATE MINIMUM COMPETENCY IN RISK MANAGEMENT; (II)(I) HAS AT LEAST SEVEN YEARS OF EXPERIENCE IN RISK FINANCING, LOSS PREVENTION, RISK AND INSURANCE COVERAGE ANALYSIS AND ASSESSMENT, OR PURCHASING COMMERCIAL RISK INSURANCE; AND
(II) HAS ANY ONE OF THE DESIGNATIONS SPECIFIED IN SUBCLAUSES (AAA) THROUGH (EEE) OF SUBITEM (BB) OF CLAUSE (II) OF ITEM (I) OF THIS SUBPAR- AGRAPH; (III) HAS AT LEAST TEN YEARS OF EXPERIENCE IN RISK FINANCING, LOSS PREVENTION, RISK AND INSURANCE COVERAGE ANALYSIS AND ASSESSMENT, OR PURCHASING COMMERCIAL RISK INSURANCE; OR (IV) (I) HAS A GRADUATE DEGREE FROM AN ACCREDITED COLLEGE OR UNIVERSI- TY IN RISK MANAGEMENT, BUSINESS ADMINISTRATION, FINANCE, ECONOMICS, OR ANY OTHER FIELD DETERMINED BY THE SUPERINTENDENT TO DEMONSTRATE MINIMUM COMPETENCE IN RISK MANAGEMENT; AND (II)(AA) HAS AT LEAST THREE YEARS OF EXPERIENCE IN RISK FINANCING, LOSS PREVENTION, RISK AND INSURANCE COVERAGE ANALYSIS AND ASSESSMENT, OR PURCHASING COMMERCIAL RISK INSURANCE; OR (BB) HAS ANY ONE OF THE DESIGNATIONS SPECIFIED IN SUBCLAUSES (AAA) THROUGH (EEE) OF SUBITEM (BB) OF CLAUSE (II) OF ITEM (I) OF THIS SUBPAR- AGRAPH. (3) "MUNICIPALITY" SHALL MEAN ANY COUNTY, CITY, TOWN OR VILLAGE. (C) EFFECTIVE ON THE FIFTH JANUARY FIRST OCCURRING AFTER THE DATE OF THE ENACTMENT OF THIS SUBSECTION AND EACH FIFTH JANUARY FIRST OCCURRING THEREAFTER, THE AMOUNTS SPECIFIED IN PARAGRAPH ONE OF SUBSECTION (B) OF THIS SECTION MAY BE ADJUSTED TO REFLECT THE PERCENTAGE CHANGE FOR SUCH FIVE-YEAR PERIOD IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE UNITED STATES DEPART- MENT OF LABOR. THE SUPERINTENDENT MAY CONDUCT A PUBLIC HEARING TO DETERMINE WHETHER SUCH INCREASE IS NECESSARY. (D) (1) EXCEPT AS PROVIDED IN PARAGRAPH TWO OF THIS SUBSECTION, EVERY POLICY issued pursuant to the provisions of this article shall contain a notice to the policyholder that the rate and policy form are not subject to the filing requirements of this state and such other notices required by the superintendent pursuant to regulation. (2) EVERY POLICY ISSUED PURSUANT TO PARAGRAPH THREE OF SUBSECTION (A) OF SECTION SIX THOUSAND THREE HUNDRED THREE OF THIS ARTICLE SHALL CONTAIN A NOTICE TO THE POLICYHOLDER THAT THE RATES ARE NOT SUBJECT TO THE FILING REQUIREMENTS OF THIS STATE AND THE POLICY FORMS ARE NOT SUBJECT TO THE APPROVAL REQUIREMENTS OF THIS STATE, AND SUCH OTHER NOTICES REQUIRED BY THE SUPERINTENDENT PURSUANT TO REGULATION. [(c)] (E) The superintendent may by regulation prescribe limitations on the total amount of business [which] THAT an insurer may transact pursuant to this article OR REIMPOSE FILING OR APPROVAL REQUIREMENTS WHERE AND TO THE EXTENT THAT THE SUPERINTENDENT DEEMS IT IN THE INTEREST OF THE POLICYHOLDERS. S 5. Section 2307 of the insurance law is amended by adding a new subsection (e) to read as follows: (E) POLICY FORMS FOR INLAND MARINE RISKS WHERE THE RATES FOR SUCH RISKS BY GENERAL CUSTOM OF THE BUSINESS ARE NOT WRITTEN ACCORDING TO MANUAL RATES OR RATING PLANS SHALL NOT BE FILED PURSUANT TO SUBSECTION (B) OF THIS SECTION, UNLESS THE SUPERINTENDENT DIRECTS THAT THEY BE FILED. S 6. Subsection (d) of section 2320 of the insurance law, as amended by chapter 235 of the laws of 1989, is amended to read as follows: (d) This section shall be applicable to kinds of insurance or insur- ance activities the rates for which[, pursuant to subsection (a) of section two thousand three hundred five, section two thousand three hundred twenty-eight or section two thousand three hundred forty-four of this article,] are not subject to prior approval AND WHICH ARE SUBJECT TO THIS ARTICLE.
S 7. Subsection (f) of section 2321 of the insurance law, as amended by chapter 235 of the laws of 1989, is amended to read as follows: (f) This section shall be applicable to kinds of insurance or insur- ance activities the rates for which[, pursuant to subsection (b) of section two thousand three hundred five, section two thousand three hundred twenty-eight or section two thousand three hundred forty-four of this article,] are subject to prior approval AND WHICH ARE SUBJECT TO THIS ARTICLE. S 8. Section 3110 of the insurance law is amended to read as follows: S 3110. Withdrawal of [approval of] any policy form. (A) Whenever by the provisions of this chapter the superintendent is authorized to give [his] approval of any form of insurance policy or contract, [he] THE SUPERINTENDENT may, after notice and hearing given to the insurer [which] THAT submitted such form for approval, withdraw an approval previously given, if the use of such form is contrary to the require- ments applicable to such form at the time of such withdrawal. Any such withdrawal shall be effective at the expiration of such period, not less than ninety days after the giving of notice of withdrawal, as the super- intendent shall in such notice prescribe. (B) WHENEVER BY THE PROVISIONS OF THIS CHAPTER AN INSURER MAY USE A POLICY FORM WITHOUT OBTAINING THE PRIOR APPROVAL OF THE SUPERINTENDENT, THE SUPERINTENDENT MAY, AFTER NOTICE AND HEARING GIVEN TO THE INSURER, ORDER THE INSURER TO CEASE USING SUCH POLICY FORM, IF THE USE OF SUCH FORM IS CONTRARY TO THE REQUIREMENTS APPLICABLE TO SUCH FORM AT THE TIME OF THE EFFECTIVE DATE OF SUCH ORDER. ANY SUCH ORDER SHALL BE EFFECTIVE AT THE EXPIRATION OF SUCH PERIOD, NOT LESS THAN NINETY DAYS AFTER THE GIVING OF A NOTICE OF CESSATION, AS THE SUPERINTENDENT SHALL IN SUCH NOTICE PRESCRIBE. S 9. This act shall take effect on the ninetieth day after it shall have become a law; provided that the amendments to subsection (d) of section 2320 of the insurance law made by section six of this act shall not affect the expiration of such section and shall be deemed to expire therewith.

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