S T A T E   O F   N E W   Y O R K
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                                 4718--A

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            February 5, 2015
                               ___________

Introduced  by  M. of A. MOYA, BRONSON, STIRPE, SKOUFIS, CROUCH, LAVINE,
  SIMOTAS, CLARK, BICHOTTE, BRINDISI, WALKER, MILLER, ORTIZ, SCHIMEL  --
  Multi-Sponsored  by  --  M.  of  A.  BRAUNSTEIN,  CERETTO,  DenDEKKER,
  PEOPLES-STOKES -- read once and referred to the Committee on Insurance
  -- recommitted to the Committee on Insurance in accordance with Assem-
  bly Rule 3, sec. 2 --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to  amend  the  insurance  law,  in  relation  to  enacting the
  "construction insurance transparency act of 2016" requiring all insur-
  ers which issue  policies  of  liability  insurance  insuring  against
  claims made in reliance upon the duty imposed by the "scaffold law" to
  file  annual  financial  statements  and  detailed claim data with the
  superintendent of financial services

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  This  act  shall  be  known  and  may  be  cited  as  the
"construction insurance transparency act of 2016".
  S 2. Declarations of  legislative  findings.  The  legislature  hereby
finds  and  declares  that  persons, corporations, associations or other
business entities which issue policies of liability  insurance  insuring
an  owner  of  real  property or a contractor who is performing work and
services on real property against  claims  made  in  reliance  upon  the
duties  imposed  upon  such  parties  by  section  240 of the labor law,
commonly referred to as the "scaffold law", owe  an  obligation  to  the
public,  to  those  they  insure  and  to those who may in the future be
insured by them, to fully disclose in a public  and  transparent  manner
all elements relating to the premiums paid for such insurance, the meth-
od  and  manner  in  which such premiums are determined and imposed upon
insureds, and claims made by injured persons  who  rely  on  owners  and
contractors  to  provide  a safe and secure worksite as required in such
section of such law. It is essential that the public be  made  aware  of

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02019-04-6
              

A. 4718--A                          2

such  an  insurer's  responsibility  to  inform  them of their financial
condition and solvency, and the details and specifics of the factors and
circumstances behind its financial solvency as well as the basis for the
rates they charge to owners and contractors to obtain such coverage. The
determination  of  premiums  for such liability insurance policy in this
state has, unfortunately, gone on too long in obscurity, with even those
who bear the cost of premiums unable to learn why prices are set as they
are. As a matter of public trust, liability insurers should be  required
to make the public aware of the pertinent facts related to their premium
determinations  and  financial  solvency by disclosing all the pertinent
facts as provided for in this section. It is the further  sense  of  the
legislature  that  this  data  should be disclosed in an open and public
manner, and should be made available without undue cost and delay.
  S 3. The insurance law is amended by adding a new section 343 to  read
as follows:
  S  343.  FINANCIAL  STATEMENT AND DETAILED CLAIM DATA TO BE FILED WITH
THE SUPERINTENDENT. (A) FOR PURPOSES OF THIS SECTION, THE TERM "INSURER"
SHALL MEAN ANY PERSON, CORPORATION, ASSOCIATION OR OTHER BUSINESS ENTITY
WHICH ISSUES A POLICY OF LIABILITY INSURANCE INSURING  A  CONTRACTOR  OR
OWNER  OF  REAL PROPERTY LOCATED IN THIS STATE AGAINST CLAIMS MADE BY AN
INJURED WORKER, THE CLAIM FOR WHICH IS MADE IN RELIANCE  UPON  THE  DUTY
OWED  TO  SUCH  WORKER PURSUANT TO THE PROVISIONS OF SECTION TWO HUNDRED
FORTY OF THE LABOR LAW.
  (B) ON OR BEFORE APRIL FIRST OF EACH YEAR, EVERY INSURER SHALL FOR THE
PRIOR CALENDAR YEAR PROVIDE THE SUPERINTENDENT AND  THE  PUBLIC  WITH  A
DETAILED  FINANCIAL  STATEMENT  TO  SUPPLEMENT AND EXPAND UPON ANY OTHER
INFORMATION OTHERWISE PROVIDED TO THE DEPARTMENT AS IT RELATES AN INSUR-
ER'S PROVISION OF LIABILITY INSURANCE COVERAGE TO OWNERS OF REAL PROPER-
TY OR CONTRACTORS PERFORMING SERVICES TO OWNERS  OF  REAL  PROPERTY  FOR
CLAIMS  MADE  BY  AN  INJURED  PERSON  IN RELIANCE UPON THE DUTY OWED BY
SECTION TWO HUNDRED FORTY OF THE LABOR LAW; PROVIDED, HOWEVER, THAT  THE
INITIAL  FINANCIAL  STATEMENT SO FILED BY AN INSURER AFTER THE EFFECTIVE
DATE OF THIS SECTION SHALL INCLUDE  THE  INFORMATION  REQUIRED  IN  THIS
SUBDIVISION  NOT  ONLY  FOR  SUCH  PRIOR  CALENDAR YEAR BUT ALSO FOR THE
PREVIOUS NINE CALENDAR YEARS PRIOR TO SUCH REPORT.  THE FINANCIAL STATE-
MENT SHALL, IN DEPTH, SEPARATE THE COST OF PROVIDING SECTION TWO HUNDRED
FORTY OF THE LABOR LAW BASED COVERAGE FROM THE COST OF PROVIDING GENERAL
LIABILITY INSURANCE INSURING THE SAME OWNER OR CONTRACTOR  WITH  RESPECT
TO  THE  SAME PROPERTY AND SHALL CONTAIN AT LEAST THE FOLLOWING INFORMA-
TION RELATING TO COVERAGE PURSUANT TO SUCH SECTION:  (1) THAT PORTION OF
PREMIUMS ASSESSED AND ATTRIBUTABLE TO PROVIDING SUCH COVERAGE; (2)  PAID
JUDGMENTS,  SETTLEMENTS OR LOSSES RESULTING FROM SUCH COVERAGE; (3) CASE
RESERVES FOR LOSSES WHICH MAY BE ATTRIBUTABLE TO COVERAGE; (4)  INCURRED
BUT  NOT  REPORTED LOSS ESTIMATES WHICH MAY BE ATTRIBUTABLE TO COVERAGE;
(5) PAID DEFENSE AND  COST  CONTAINMENT  EXPENSES  ATTRIBUTABLE  TO  ANY
CLAIMS  MADE BASED UPON SUCH COVERAGE; (6) CASE RESERVES FOR DEFENSE AND
COST CONTAINMENT EXPERIENCE ATTRIBUTABLE TO ANY CLAIMS MADE  BASED  UPON
SUCH  COVERAGE;  (7) INCURRED BUT NOT REPORTED DEFENSE AND COST CONTAIN-
MENT ESTIMATES BASED UPON SUCH COVERAGE; (8) PREMIUM AND LOSS EXPERIENCE
IDENTIFIED BY POLICY LIMITS AND DEDUCTIBLES; (9) NUMBER OF CLAIMS INITI-
ATED AND CLOSED; (10) NUMBER OF CLAIMS CLOSED WITH LOSS  PAYMENTS;  (11)
NUMBER OF OPEN CLAIMS AT THE TIME SUCH STATEMENT IS PREPARED; (12) OTHER
EXPENSES  BY CATEGORY AS DETERMINED BY THE SUPERINTENDENT TO REFLECT THE
COST TO THE INSURER TO PROVIDE SUCH COVERAGE  AS  PART  OF  A  LIABILITY
INSURANCE  POLICY;  (13) INVESTMENT INCOME REALIZED FROM THAT PORTION OF
THE PREMIUM PAID FOR A POLICY PROVIDING SUCH COVERAGE; (14)  THE  AMOUNT

A. 4718--A                          3

OF EXPOSURE TO THE INSURER RESULTING FROM THE PROVISION OF SUCH COVERAGE
AND  WHETHER  THE  INSURER  HAS  LIMITED THE AMOUNT OF COVERAGE PROVIDED
TOGETHER WITH AN ESTIMATE OF THE AMOUNT WHICH MIGHT BE REQUIRED  OF  THE
INSURED  TO  PURCHASE FURTHER COVERAGE FROM AN OUT OF STATE EXCESS LINES
PROVIDER, BASED UPON CURRENT DATA AVAILABLE TO SUCH  IN-STATE  PROVIDER,
ESPECIALLY  WHERE  SUCH  IN-STATE  PROVIDER  OPERATES  AS AN EXCESS LINE
INSURER FOR RISKS IN ANOTHER STATE; (15) AMOUNTS SPENT  BY  INSURER  FOR
RISK  MANAGEMENT  PROGRAMS,  OR  REQUIRED TO BE SPENT BY INSUREDS AT THE
BEHEST OF THE INSURER, WHICH  PROGRAMS  ARE  DESIGNED  AND  INTENDED  TO
PROMOTE  WORKSITE  SAFETY,  MORE  PARTICULARLY  AS  IT RELATES TO HEIGHT
RELATED ACCIDENTS COVERED BY SECTION TWO HUNDRED FORTY OF THE LABOR LAW;
AND (16) THE AFOREGOING EXPERIENCE AND INFORMATION FURTHER SUBDIVIDED BY
QUALITY OF RISK AS MEASURED BY PRIOR LOSS EXPERIENCE, CONTRACTOR PAYROLL
RANGES, CONTRACTOR NUMBER OF EMPLOYEE RANGES,  RISK  MANAGEMENT  PARTIC-
IPATION,  AND  OTHER  RELEVANT  IDENTIFIABLE  DIFFERENCES IN EXPOSURE TO
INSURANCE LOSS. THE DATA PROVIDED BY INSURERS SHALL BE SEPARATED OUT  SO
THAT  A  DETERMINATION  CAN  BE  MADE THAT A CLAIM MADE OR PAID IS BASED
PARTIALLY OR TOTALLY UPON SECTION TWO HUNDRED FORTY OF  THE  LABOR  LAW;
COVERAGE,  AND NOT ANY OTHER PROVISION OF STATUTORY OR COMMON LAW IMPOS-
ING ANOTHER OR DIFFERENT OR SEPARATE STANDARD OF  CARE  OR  DUTY  TO  AN
INJURED  PARTY.   SUCH FINANCIAL STATEMENT SHALL INCLUDE THE ENTIRETY OF
SUCH INSURER'S BUSINESS ACTIVITIES INSURING AGAINST RISKS  OCCURRING  IN
THIS  STATE AND SHALL BE IN A FORM DETERMINED BY THE SUPERINTENDENT. THE
FORM SHALL BE SUFFICIENTLY ITEMIZED IN A MANNER THAT ALLOWS FOR AN ACTU-
ARIALLY SOUND ANALYSIS OF THE INCOME REALIZED BY THE  INSURER  FROM  ALL
SOURCES DURING SUCH YEAR, INCLUDING BUT NOT LIMITED TO PREMIUMS, INVEST-
MENT  INCOME,  AND  ANY OTHER CATEGORY OR CATEGORIES OF INCOME AS DETER-
MINED BY THE SUPERINTENDENT TO REFLECT THE FULL DISCLOSURE  REQUIREMENTS
OF  THIS  SECTION  AND THAT PORTION WHICH MAY BE SPECIFICALLY RELATED TO
SUCH COVERAGE. AT A MINIMUM, SUCH INFORMATION SHALL CONSIST OF THE ITEMS
SET FORTH IN THE STATEMENT OF INCOME, EXCLUDING THE CAPITAL AND  SURPLUS
ACCOUNT  SECTION OF THE PROPERTY/CASUALTY STATUTORY ANNUAL STATEMENT, AS
APPLICABLE TO THE INSURER'S NEW YORK STATE  BUSINESS,  AS  WELL  AS  THE
OTHER  INFORMATION  DELINEATED IN THIS SUBSECTION. SUCH FINANCIAL STATE-
MENT SHALL ALSO CONTAIN A COMPREHENSIVE AND DETAILED DISCLOSURE  OF  THE
INSURER'S EXPENSES ACTUALLY INCURRED AND PAID DURING SUCH CALENDAR YEAR,
TO  INCLUDE  NORMAL BUSINESS EXPENSES, SALARIES, COMMISSIONS, CONSULTING
FEES, LEGAL EXPENSES, ADVERTISING COSTS AND ANY  OTHER  CATEGORY  DEEMED
PERTINENT  TO  THE  INTENT  OF  THIS  SECTION. AT A MINIMUM, THE EXPENSE
INFORMATION REQUIRED SHALL CONSIST OF THE ITEMS SET FORTH IN THE  UNDER-
WRITING   AND   INVESTMENT   EXHIBIT   -   PART  3  -  EXPENSES  OF  THE
PROPERTY/CASUALTY STATUTORY  ANNUAL  STATEMENT,  AS  APPLICABLE  TO  THE
INSURER'S  NEW  YORK STATE BUSINESS. WITH RESPECT TO SALARIES (INCLUDING
ALL OTHER FORMS OF COMPENSATION), EACH INSURER SHALL ITEMIZE THE  SALARY
OF  THE  TWENTY MOST HIGHLY COMPENSATED EMPLOYEES OF SUCH INSURER DURING
SUCH YEAR, PROVIDED THAT  THE  NAMES  OF  SUCH  EMPLOYEES  NEED  NOT  BE
DISCLOSED.   SUCH FINANCIAL STATEMENT SHALL ALSO PROVIDE THE PUBLIC WITH
A SYNOPSIS OF CLAIMS OR SETTLEMENTS PAID FOR SECTION TWO  HUNDRED  FORTY
OF  THE LABOR LAW COVERAGE PURSUANT TO SUCH POLICIES OR CONTRACTS, LIST-
ING THE TOTAL OF SUCH CLAIMS AND SETTLEMENTS ATTRIBUTABLE TO SUCH COVER-
AGE. AT A MINIMUM, THE CLAIM INFORMATION REQUIRED SHALL CONSIST  OF  THE
ITEMS   SET  FORTH  IN  THE  EXHIBIT  OF  PREMIUMS  AND  LOSSES  OF  THE
PROPERTY/CASUALTY STATUTORY  ANNUAL  STATEMENT,  AS  APPLICABLE  TO  THE
INSURER'S  NEW  YORK STATE BUSINESS AND IDENTIFIED AND CATEGORIZED SEPA-
RATELY FOR EACH ZIP CODE IN THIS STATE. SUCH FINANCIAL  STATEMENT  SHALL
BE SIGNED AND ATTESTED AS FULL, COMPLETE AND ACCURATE BY THE CHIEF EXEC-

A. 4718--A                          4

UTIVE  OFFICER  OF  THE  INSURER, AND HE OR SHE SHALL BE HELD PERSONALLY
RESPONSIBLE WITH RESPECT TO THE ACCURACY OF THE CONTENT OF  SUCH  STATE-
MENT.  THE SUPERINTENDENT SHALL PROVIDE INSURERS WITH A METHOD TO SUBMIT
THEIR FINANCIAL STATEMENTS ELECTRONICALLY VIA THE INTERNET, WHICH METHOD
SHALL  INCLUDE  INSTRUCTIONS RELATING TO THE USE OF AN ELECTRONIC SIGNA-
TURE WHICH SHALL BE SUBJECT TO, AND SUBMITTED IN ACCORDANCE WITH SECTION
THREE HUNDRED SIXTEEN OF THIS ARTICLE; PROVIDED, HOWEVER, THAT NO EXCEP-
TION AUTHORIZED IN SUCH SECTION MAY BE REQUESTED OR GRANTED.
  (C) ON OR BEFORE APRIL FIRST OF EACH YEAR, EVERY INSURER SHALL PROVIDE
THE SUPERINTENDENT WITH DETAILED CLOSED CLAIM INFORMATION FOR  THE  SAME
INSURANCE COVERAGE AS PROVIDED FOR IN SUBSECTION (B) OF THIS SECTION FOR
THE  MOST  RECENTLY  CONCLUDED  CALENDAR  YEAR. UNTIL THE SUPERINTENDENT
PROMULGATES DATA COLLECTION FORMS AND  PROCEDURES  FOR  THE  ITEMIZATION
REQUIREMENTS,  DATA  SHALL  BE  COLLECTED  USING, AT A MINIMUM, THE MOST
RECENT PUBLICLY AVAILABLE FORMS REQUIRED BY LAW, OR COMMONLY USED IN THE
INSURANCE INDUSTRY. THE SUPERINTENDENT MAY REQUIRE  ADDITIONAL  INFORMA-
TION  BEYOND THAT WHICH MAY OTHERWISE BE CURRENTLY REQUIRED IF HE OR SHE
DEEMS IT NECESSARY AND WARRANTED WITHOUT THE NEED TO  FORMALLY  ADOPT  A
RULE  OR  REGULATION  PROVIDED  SUCH  REQUIREMENT IS CONSISTENT WITH THE
INTENT OF THIS SECTION. SUCH DETAILED CLAIM DATA  SHALL  BE  SIGNED  AND
ATTESTED  AS  FULL, COMPLETE AND ACCURATE BY THE CHIEF EXECUTIVE OFFICER
OF THE INSURER, AND HE OR SHE SHALL BE HELD PERSONALLY RESPONSIBLE  WITH
RESPECT  TO  THE  ACCURACY OF THE DATA. THE DETAILED CLAIM DATA SHALL BE
SUBMITTED IN THE SAME MANNER AS PROVIDED FOR IN SUBSECTION (B)  OF  THIS
SECTION.
  (D)  THE SUPERINTENDENT SHALL, IN BOTH WRITTEN FORM AND AS PART OF THE
DEPARTMENT WEB SITE, MAKE SUCH FINANCIAL STATEMENTS AND  DETAILED  CLAIM
INFORMATION  AVAILABLE  TO  THE  PUBLIC.  THE DETAILED CLAIM INFORMATION
SHALL BE PROVIDED IN AGGREGATE FORM FOR ALL INSURERS  AND  SEPARATED  BY
SPECIFIC  INSURER,  COMBINED  WITHOUT  ANY  IDENTIFICATION OF A SPECIFIC
CLAIM TO A SPECIFIC INSURER.  NONE OF THE  PUBLICLY  AVAILABLE  DETAILED
CLAIM  INFORMATION  SHALL  IDENTIFY THE INDIVIDUAL INSURER, DEFENDANT OR
PLAINTIFF, OR REPRESENTATIVE OF THE SAME,  ASSOCIATED  WITH  THE  CLAIM.
SUCH FINANCIAL STATEMENTS AND DETAILED CLAIM INFORMATION SHALL BE DEEMED
A  PUBLIC DOCUMENT AND NO PERSON SHALL BE REQUIRED TO FILE A REQUEST FOR
SUCH FINANCIAL STATEMENTS PURSUANT TO ARTICLE SIX OF THE PUBLIC OFFICERS
LAW IN ORDER TO RECEIVE A COPY THEREOF, BUT UPON REQUEST AND PAYMENT  OF
THE  FEE FOR COPYING SUCH DOCUMENT, IT SHALL BE PROVIDED FORTHWITH. WITH
RESPECT TO THE ELECTRONIC COPY OF SUCH FINANCIAL STATEMENTS AND DETAILED
CLAIM INFORMATION, WHICH SHALL BE ACCESSIBLE  ON  THE  DEPARTMENT'S  WEB
SITE,  THE  DEPARTMENT SHALL HIGHLIGHT THE AVAILABILITY OF SUCH INFORMA-
TION TO THE PUBLIC ON SUCH WEB SITE, AND  THE  LINK  TO  EACH  INSURER'S
FINANCIAL  STATEMENT AND THE AGGREGATED DETAILED CLAIM INFORMATION SHALL
BE ACCESSIBLE IN A SIMPLE AND EASY MANNER. BOTH THE FINANCIAL  STATEMENT
AND  AGGREGATED  DETAILED CLAIM INFORMATION ON THE DEPARTMENT'S WEB SITE
SHALL BE AVAILABLE IN SPREADSHEET  FORMAT,  IN  ADDITION  TO  ANY  OTHER
FORMAT THE SUPERINTENDENT DETERMINES IS APPROPRIATE. WHERE SUMMARIES ARE
INCLUDED,  THEY SHALL BE WRITTEN IN PLAIN AND SIMPLE ENGLISH SO THAT THE
PUBLIC AT LARGE CAN EASILY COMPREHEND THE DATA PROVIDED.
  (E) ON OR BEFORE JULY FIRST OF EACH  YEAR,  THE  SUPERINTENDENT  SHALL
ISSUE  REPORTS SUMMARIZING AND EXPLAINING THE INFORMATION COLLECTED FROM
THE FINANCIAL STATEMENTS AND THE DETAILED CLAIM INFORMATION  AND  SUMMA-
RIZING  THE  COST  AND  OTHER  ESSENTIAL  ELEMENTS RELEVANT TO PROVIDING
SECTION TWO HUNDRED FORTY OF THE LABOR LAW COVERAGE. SUCH  REPORT  SHALL
FURTHER  CONTAIN SUCH RECOMMENDATIONS THE SUPERINTENDENT DEEMS ADVISABLE
TO ENCOURAGE THE UTILIZATION OF RISK MANAGEMENT PROGRAMS TO BE REGULARLY

A. 4718--A                          5

CONDUCTED BY CONTRACTORS TO REDUCE PREMIUMS AND PROVIDE WORKERS  WITH  A
SAFER WORK ENVIRONMENT, AND ANY OTHER STEPS CONTRACTORS OR REAL PROPERTY
OWNERS SHOULD UTILIZE IN FURTHERANCE OF THE SAME. THE SUPERINTENDENT MAY
SEEK,  AND  SHALL  BE ENTITLED TO RECEIVE, THE AID AND ASSISTANCE OF THE
COMMISSIONER OF LABOR AND ANY OTHER STATE OR LOCAL GOVERNMENTAL OFFICIAL
CHARGED WITH RESPONSIBILITY FOR WORK SITE SAFETY IN PREPARING SUCH ANAL-
YSIS AND RECOMMENDATIONS.  COPIES OF SUCH REPORTS SHALL BE FORWARDED  TO
THE  TEMPORARY  PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY AND
THE CHAIRS OF THE SENATE AND ASSEMBLY INSURANCE COMMITTEES. SUCH REPORTS
SHALL BE PUBLIC DOCUMENTS AND SHALL BE ACCESSIBLE BOTH IN PAPER COPY AND
ON THE DEPARTMENT'S WEB SITE IN A SIMILAR FASHION  AS  PROVIDED  FOR  IN
SUBSECTION (D) OF THIS SECTION.
  (F)  WHERE  AN  INSURER FAILS OR REFUSES TO PROVIDE THE SUPERINTENDENT
WITH A FULL AND COMPLETE DISCLOSURE AS REQUIRED  BY  THIS  SECTION,  THE
SUPERINTENDENT SHALL TAKE SUCH ACTION HE OR SHE DEEMS NECESSARY TO BRING
THE  INSURER INTO FULL COMPLIANCE. SUCH ACTION MAY INCLUDE IMPOSITION OF
A CIVIL PENALTY OF UP TO FIFTY THOUSAND  DOLLARS  ASSESSED  AGAINST  THE
INSURER  FOR  EACH VIOLATION, TEMPORARY SUSPENSION OF ANY RIGHT TO ISSUE
ADDITIONAL POLICIES OR CONTRACTS UNTIL THE INSURER  BRINGS  ITSELF  INTO
FULL  COMPLIANCE, AN AUDIT OF THE INSURER'S RECORDS BY THE DEPARTMENT OR
ITS DESIGNATED REPRESENTATIVE TO OBTAIN THE INFORMATION AND WHICH  AUDIT
SHALL  BE  PAID FOR BY THE INSURER, OR ANY OTHER CIVIL REMEDY THE SUPER-
INTENDENT  DEEMS  WARRANTED  OR  NECESSARY  UNTIL  SUCH  INSURER   FULLY
COMPLIES.  IN  ADDITION  THE  OFFICER WHOSE SIGNATURE IS AFFIXED TO SUCH
STATEMENT MAY BE PERSONALLY PENALIZED TO THE SAME EXTENT.
  (G) THE SUPERINTENDENT MAY PROMULGATE SUCH RULES AND REGULATIONS HE OR
SHE DEEMS NECESSARY FOR THE PROPER ADMINISTRATION OF THE  PROVISIONS  OF
THIS  SECTION,  AND  SUCH RULES AND REGULATIONS MAY BE PROMULGATED ON AN
EMERGENCY BASIS IF THE SUPERINTENDENT WARRANTS SUCH ACTION TO BE  NECES-
SARY.
  S 4. Severability. If any item, clause, sentence, subparagraph, subdi-
vision  or  other  part  of  this act, or the application thereof to any
person or circumstances shall be held to be invalid, such holding  shall
not  affect, impair or invalidate the remainder of this act but it shall
be confined in its operation to the  item,  clause,  sentence,  subpara-
graph,  subdivision  or other part of this act directly involved in such
holding, or to the person and circumstances therein involved.
  S 5. This act shall take effect on the first of January next  succeed-
ing the date upon which it shall have become a law.