Relates to the effectiveness of flexible rating for nonbusiness automobile insurance plans.
TITLE OF BILL: An act to amend the insurance law, in relation to the effectiveness of flexible rating for nonbusiness automobile insurance plans
PURPOSE: The purpose of this bill is to protect consumers from high premium increases by ensuring that the process used to establish rate increases is reviewed on a regular basis.
SUMMARY OF PROVISIONS: This legislation would sunset section 2350 of the Insurance Law on June 30, 2017.
EXISTING LAW: Amends § 2350 of the Insurance Law.
JUSTIFICATION: New York State's automobile insurance premiums are some of the highest in the nation. Since 2008, New York State has used flex rating, a process by which auto insurers are authorized to increase or decrease premiums by up to five percent without approval from the Department of Financial Services. This process was also used in the 1990's and the statutory provisions allowing for flex rating were reviewed and extended every three years until they were allowed to sunset subjecting all rates to prior approval. Currently, the provisions of New York State Law related to flex rating are permanent. This bill would reinstate the three year sunset to the provisions of law related to flex rating to ensure that the rate increases are fair, appropriate and are subject to the necessary Department of Financial Services oversight.
LEGISLATIVE HISTORY: New Bill.
FISCAL IMPLICATIONS: None
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 7566 IN SENATE May 15, 2014 ___________Introduced by Sen. LARKIN -- 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 the effectiveness of flexible rating for nonbusiness automobile insurance plans THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 2350 of the insurance law is amended by adding a new subsection (e) to read as follows: (E) THIS SECTION SHALL CEASE TO BE OF ANY FORCE AND EFFECT AFTER JUNE 30, 2017. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15068-01-4