Bill S6706-2013

Relates to extending the effectiveness of certain provisions relating to automobile and property/casualty insurance rates

Relates to extending the effectiveness of certain provisions relating to automobile and property/casualty insurance rates.

Details

Actions

  • Mar 27, 2014: referred to insurance
  • Mar 27, 2014: DELIVERED TO ASSEMBLY
  • Mar 27, 2014: PASSED SENATE
  • Mar 12, 2014: ADVANCED TO THIRD READING
  • Mar 11, 2014: 2ND REPORT CAL.
  • Mar 10, 2014: 1ST REPORT CAL.242
  • Mar 3, 2014: REFERRED TO INSURANCE

Votes

VOTE: COMMITTEE VOTE: - Insurance - Mar 10, 2014
Ayes (19): Seward, Carlucci, Flanagan, Golden, Grisanti, Lanza, Larkin, LaValle, Martins, O'Mara, Young, Avella, Breslin, Espaillat, Kennedy, Parker, Stavisky, O'Brien, Peralta

Memo

BILL NUMBER:S6706

TITLE OF BILL: An act to amend the insurance law, in relation to extending the effectiveness of certain provisions relating to automobile and property/casualty insurance rates

PURPOSE:

To extend several important provisions of the Insurance Law that promote the stability of the property/casualty insurance market.

SUMMARY OF PROVISIONS:

Section one of the bill would extend until June 30, 2017 provisions which allow the New York Property Insurance Underwriting Association to write certain coverage upon a determination by the Superintendent of Insurance that coverage is unavailable in a particular market.

Section two would extend sections 2328 and 2329 of the Insurance Law dealing with commercial motor vehicle insurance rates to June 30, 2017.

Sections three and four would extend for three years provisions of section 3425 of the Insurance Law dealing with non-renewal requirements for automobile insurance.

Section five extends the expiration of subsection (a) of section 2305 of the insurance law relating to prior approval of certain insurance rates to June 30, 2017.

Section six extends section 2342 of the Insurance Law which extends the expiration of sections 2307(c), 2308, 2310(a), 2316, 2320, 2323, 2326, 2335, 2336(b), and 2341 to June 30, 2017.

Section seven extends subsection (h) of section 2344 of the Insurance Law dealing with flexible rate limitations in problem markets to June 30, 2017.

Section eight extends subsection (c) of paragraph 3 of section 6302 of the Insurance Law dealing with surplus requirements for certain insurers authorized to write in the free trade zone to December 31, 2016.

Section nine provides for an immediate effective date.

JUSTIFICATION:

Many of the provisions of this bill are important consumer protections that have been in place for years regarding rate regulation in certain areas of insurance. Several provisions of the bill also enable insurers to continue making certain types of insurance readily available in New York. While some provisions may merit future analysis, they must be maintained as presently in operation in order to preserve the stability of the market.

LEGISLATIVE HISTORY:

This is new legislation. These provisions were previously extended for a three year period by Chapter 490 of the laws of 2011.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 6706 IN SENATE March 3, 2014 ___________
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 extending the effec- tiveness of certain provisions relating to automobile and property/casualty insurance rates THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (g) of section 5412 of the insurance law, as amended by chapter 102 of the laws of 2011, is amended to read as follows: (g) The provisions of this section shall cease to be of any force or effect on or after June thirtieth, two thousand [fourteen] SEVENTEEN, except that policies issued or other obligations incurred by the associ- ation shall not be impaired by the expiration of this section and the association shall continue for the purpose of servicing such policies and performing such obligations. S 2. Sections 2328 and 2329 of the insurance law, as amended by chap- ter 102 of the laws of 2011, are amended to read as follows: S 2328. Certain motor vehicle insurance rates; prior approval. For the periods February first, nineteen hundred seventy-four through August second, two thousand one, and the effective date of the property/casualty insurance availability act through June thirtieth, two thousand [fourteen] SEVENTEEN, no changes in rates, rating plans, rating rules and rate manuals applicable to motor vehicle insurance, including no-fault coverages under article fifty-one of this chapter, shall be made effective until approved by the superintendent, notwithstanding any inconsistent provisions of this article; provided, however, that changes in such rates, rating plans, rating rules and rate manuals may be made effective without such approval if the rates which result from such changes are no higher than the insurer's rates last approved by the superintendent. This section shall apply only to policies covering loss- es or liabilities arising out of ownership of a motor vehicle used prin- cipally for the transportation of persons for hire, including a bus or a
school bus as defined in sections one hundred four and one hundred forty-two of the vehicle and traffic law. S 2329. Motor vehicle insurance rates; excess profits. In accordance with regulations prescribed by the superintendent, each insurer issuing policies which are subject to article fifty-one of this chapter, includ- ing policies of motor vehicle personal injury liability insurance or policies of motor vehicle property damage liability insurance or insur- ance for loss or damage to a motor vehicle, shall establish a fair, practicable, and nondiscriminatory plan for refunding or otherwise cred- iting to those purchasing such policies their share of the insurer's excess profit, if any, on such policies. An excess profit shall be a profit beyond a percentage rate of return on net worth attributable to such policies, computed in accordance with the regulation required by section two thousand three hundred twenty-three of this article, and determined by the superintendent to be so far above a reasonable average profit as to amount to an excess profit, taking into consideration the fact that losses or profits below a reasonable average profit will not be recouped from such policyholders. Each plan shall apply to policy periods for the periods January first, nineteen hundred seventy-four through August second, two thousand one, and the effective date of the property/casualty insurance availability act through June thirtieth, two thousand [fourteen] SEVENTEEN. In prescribing such regulations the superintendent may limit the duration of such plans, waive any require- ment for refund or credit which he or she determines to be de minimis or impracticable, adopt forms of returns which shall be made to him or her in order to establish the amount of any refund or credit due, establish periods and times for the determination and distribution of refunds and credits, and shall provide that insurers receive appropriate credit against any refunds or credits required by any such plan for policyhold- er dividends and for return premiums which may be due under rate credit or retrospective rating plans based on experience. S 3. Paragraph 2 of subsection (l) of section 3425 of the insurance law, as amended by chapter 102 of the laws of 2011, is amended to read as follows: (2) The superintendent shall collect, analyze and compile such reports with regard to the number of new insureds, non-renewed insureds and business written by each insurer in each rating territory of each such insurer and, in each case, the class of insureds (including age and sex) affected so that a statistical analysis of the results obtained pursuant to subsections (f) and (m) of this section shall be provided to each house of the legislature by March fifteenth, in the years nineteen hundred ninety-two, nineteen hundred ninety-six, nineteen hundred nine- ty-eight, two thousand one, two thousand six, two thousand seven, two thousand eight, two thousand eleven and two thousand [fourteen] SEVEN- TEEN. S 4. Paragraphs 1 and 2 and the opening paragraph of paragraph 3 of subsection (m) of section 3425 of the insurance law, as amended by chap- ter 102 of the laws of 2011, are amended to read as follows: (1) Paragraphs eight and nine of subsection (a), subsection (f) and subparagraphs (B) and (E) of paragraph one of subsection (j) of this section shall not apply to any new covered policy of automobile insur- ance voluntarily written on or after August first, nineteen hundred eighty-five and prior to January first, nineteen hundred eighty-six, and on or after August second, two thousand one and prior to the effective date of the property/casualty insurance availability act, and on or after June thirtieth, two thousand [fourteen] SEVENTEEN, but the legal
rights granted to insurers or policyholders under such provisions shall not be extinguished or impaired thereby. (2) In lieu of such provisions, paragraph seven of subsection (a), subparagraph (A) of paragraph one of subsection (j) and paragraph three of this subsection shall apply to such automobile insurance policies which are newly and voluntarily written to have an effective date on or after August first, nineteen hundred eighty-five and prior to January first, nineteen hundred eighty-six, and on or after August second, two thousand one and prior to the effective date of the property/casualty insurance availability act, and on or after June thirtieth, two thousand [fourteen] SEVENTEEN. On and after August first, nineteen hundred eighty-five and prior to January first, nineteen hundred eighty-six, and on or after August second, two thousand one and prior to the effective date of the property/casualty insurance availability act, and on or after June thir- tieth, two thousand [fourteen] SEVENTEEN, no notice of nonrenewal or conditional renewal of such covered automobile insurance policies referred to in this subsection shall be issued to become effective during the required policy period unless it is based upon a ground for which the policy could have been cancelled or unless it is based upon one or more of the following grounds which occurred during the thirty- six month period ending on the last day of the fourth month preceding the month of the effective date of such notice of nonrenewal or condi- tional renewal: S 5. Subsection (f) of section 2305 of the insurance law, as amended by chapter 102 of the laws of 2011, is amended to read as follows: (f) Subsection (a) of this section shall be of no force or effect during the period August third, two thousand one through the day before the effective date of the property/casualty insurance availability act, and after June thirtieth, two thousand [fourteen] SEVENTEEN. During the period August third, two thousand one through the day before the effec- tive date of the property/casualty insurance availability act, and again commencing on July first, two thousand [fourteen] SEVENTEEN, all rates previously subject to subsection (a) of this section, other than rates which are not required to be filed pursuant to subsection (b) of section two thousand three hundred ten of this article or which have been suspended from the filing requirement pursuant to section two thousand three hundred eleven of this article, shall become subject to subsections (b), (c) and (d) of this section. All other provisions of this article applicable to kinds of insurance or insurance activities the rates for which are subject to prior approval under subsection (b) of this section shall apply to kinds of insurance the rates for which were previously subject to subsection (a) of this section or the rates for which are not required to be filed pursuant to subsection (b) of section two thousand three hundred ten of this article or the rates for which have been suspended from the filing requirement pursuant to section two thousand three hundred eleven of this article. S 6. Section 2342 of the insurance law, as amended by chapter 102 of the laws of 2011, is amended to read as follows: S 2342. Expiration of certain provisions. The provisions of subsection (c) of section two thousand three hundred seven, section two thousand three hundred eight, subsection (a) of section two thousand three hundred ten, sections two thousand three hundred sixteen, two thousand three hundred twenty, two thousand three hundred twenty-three, two thou- sand three hundred twenty-six, and two thousand three hundred thirty- five, subsection (b) of section two thousand three hundred thirty-six
and section two thousand three hundred forty-one of this article shall cease to be of any force or effect during the period August third, two thousand one through the day before the effective date of the property/casualty insurance availability act, and after June thirtieth, two thousand [fourteen] SEVENTEEN. S 7. Subsection (h) of section 2344 of the insurance law, as amended by chapter 102 of the laws of 2011, is amended to read as follows: (h) This section shall cease to be of any force or effect during the period August third, two thousand one through the day before the effec- tive date of the property/casualty insurance availability act, and after June thirtieth, two thousand [fourteen] SEVENTEEN, except that rates shall reflect the likely reductive cost effects reasonably attributable to the statutory provisions specified in paragraph one of subsection (g) of this section. S 8. Paragraph 3 of subsection (c) of section 6302 of the insurance law, as amended by chapter 490 of the laws of 2011, is amended to read as follows: (3) until [June thirtieth, two thousand fourteen] DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN, a domestic property/casualty insur- ance company that maintains at all times a surplus to policyholders of at least twice the minimum surplus to policyholders required to be main- tained 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 insur- ance company or reciprocal insurer: (A) has total direct premiums comprised of at least ninety percent medical malpractice insurance; (B) assumes reinsurance premiums 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. S 9. This act shall take effect immediately.

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