Enacts provisions relating to reciprocal insurers having a corporate attorney-in-fact wholly owned by subscribers at the reciprocal insurers.
Ayes (60): Adams, Addabbo, Alesi, Aubertine, Bonacic, Breslin, DeFrancisco, Diaz, Dilan, Duane, Espada, Farley, Foley, Fuschillo, Golden, Griffo, Hannon, Hassell-Thomps, Huntley, Johnson C, Johnson O, Klein, Krueger, Kruger, Lanza, Larkin, LaValle, Leibell, Libous, Little, Marcellino, Maziarz, McDonald, Montgomery, Nozzolio, Onorato, Oppenheimer, Padavan, Parker, Peralta, Perkins, Ranzenhofer, Robach, Saland, Sampson, Savino, Schneiderman, Serrano, Seward, Skelos, Smith, Squadron, Stachowski, Stavisky, Stewart-Cousins, Thompson, Valesky, Volker, Winner, Young
Absent (1): Flanagan
Excused (1): Morahan
TITLE OF BILL:
An act to amend the insurance law, in relation to subscribers agreements of reciprocal insurers
PURPOSE OR GENERAL IDEA OF BILL:
Enacts provisions relating to reciprocal insurers having a corporate attorney-in-fact wholly owned by subscribers.
SUMMARY OF PROVISIONS:
This measure would amend sections 6106 and 6107 of the Insurance Law to correct an anomaly that occurred in the 1984 recodification of the Insurance Law. (L. 1984, c. 367).
Section 1 amends paragraph (2) of subdivision (a) of section 6106 of the insurance law to reinsert language omitted in the recodification of the insurance law in 1984.
Section 2 requires reciprocal insurers having an attorney-in-fact wholly owned by the subscribers and who have not provided a copy of the subscriber's agreement printed with each policy to do so at the time of a revision of the subscriber's agreement.
Section 3 provides for the effective date.
The proposed bill reinserts into section 6106 the language previously existing in the pre-recodification section 415, referring to reciprocals having a corporate attorney in fact wholly owned by the subscribers of the reciprocal.
In addition, the proposed bill includes a new provision in insurance law section 6107 to avoid transition difficulties that would otherwise ensue for insurers who have attorneys-in-fact wholly owned by their subscribers, but who currently are not expressly authorized to issue renewal insurance policies with the notice that the acceptance of the policy with the subscribers' agreement attached constitutes the signing of the subscribers' agreement.
The new procedure allows such reciprocals (and reciprocals authorized to issue non-assessable policies) to transmit to the subscribers changes to the subscribers' agreement together with the entire subscribers' agreement in force. In addition, the proposed change must be submitted to the subscribers with a notice stating that the failure to object to the amendment within sixty days constitutes the acceptance of the agreement as amended.
All reciprocal insurer subscribers' agreement amendments must be approved by the Superintendent pursuant to subdivision (b) of section 6107 of the insurance law, and by the advisory committee of the reciprocal pursuant to subdivision (d) of section 6107. Therefore, the new procedure provides essentially the same safeguards and efficiencies recognized in the procedures authorized by prior sections 415 and 416 of the insurance law before the 1984 recodification.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 6948 IN SENATE March 1, 2010 ___________Introduced by Sen. BRESLIN -- 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 subscribers agreements of reciprocal insurers THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 2 of subsection (a) of section 6106 of the insur- ance law is amended to read as follows: (2) Every subscriber's agreement shall be identical in terms, except as to the date and the name and address of the subscriber, with all other subscriber's agreements currently in force and effect with all other subscribers of such reciprocal insurers. However, in the case of any reciprocal insurer authorized pursuant to section six thousand one hundred eight of this article to issue non-assessable policies or agree- ments, OR HAVING A CORPORATE ATTORNEY-IN-FACT WHOLLY OWNED BY THE SUBSCRIBERS AT SUCH RECIPROCAL INSURER, the acceptance of a policy or binder of insurance containing the subscriber's agreement printed at the end of the standard policy provisions or the binder, as the case may be, preceded by the words printed upon the policy or binder: "The acceptance of this policy or binder shall constitute that insured designated therein is a subscriber of the reciprocal insurer and shall constitute the execution and delivery by the insured of the subscriber's agreement which is appended to this policy or binder, and hereby made a part thereof", shall constitute the execution and delivery of said subscriber's agree- ment by that insured as fully and to the same extent as though said agreement had been signed and acknowledged by that insured. S 2. Paragraph 4 of subsection (d) of section 6107 of the insurance law is amended to read as follows: (4) Notwithstanding paragraphs one, two and three hereof, in the case of any reciprocal insurer which shall have issued its policies, or bind- ers, with the subscriber's agreement and statement printed thereon pursuant to paragraph two of subsection (a) of section six thousand oneEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15411-01-0 S. 6948 2
hundred six of this article, OR A RECIPROCAL INSURER HAVING A CORPORATE ATTORNEY-IN-FACT WHOLLY OWNED BY THE SUBSCRIBERS AT SUCH RECIPROCAL INSURER WHO PROVIDES WITH SUCH SUBMISSION A COPY OF THE SUBSCRIBER'S AGREEMENT IN FORCE, the failure of any subscriber at such reciprocal to object in writing thereto within sixty days after the date of such submission shall constitute such subscriber's acceptance of such change, amendment or modification as fully and to the same extent as though acceptance of such change, amendment or modification had been signed and acknowledged by that subscriber and such change, amendment or modifica- tion shall take effect, as to all subscribers at such reciprocal who have not objected thereto in writing, at the expiration of sixty days from the date of submission. Any subscriber at such reciprocal who objects in writing, within sixty days from the date of such submission, to such change, amendment or modification shall be deemed to have with- drawn from membership in such reciprocal. S 3. This act shall take effect immediately.