NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8306
SPONSOR: Cahill
 
TITLE OF BILL:
An act to amend the insurance law, in relation to permitting insurers to
make available multiple rating programs for commercial insurance within
the same company
 
PURPOSE:
To permit property/casualty insurers to make available multiple rating
programs within the same company for commercial lines insurance in the
voluntary market.
 
SUMMARY OF PROVISIONS:
Section 1: Amends Insurance Law Section 2352 to permit insurers to make
available multiple rating programs within the same company for commer-
cial lines insurance in the voluntary market.
 
EXISTING LAW:
Section 2352 of the insurance law currently permits multiple rating
plans for personal lines insurance.
 
JUSTIFICATION:
In 2011, legislation was enacted to authorize insurers to make available
multiple rating programs within the same company for personal lines
insurance. Prior to the enactment of this law, if an insurance company
wished to have more than one rating plan for personal lines insurance,
they would be required to establish a separate subsidiary or affiliate
company for the primary purpose of offering a new rating plan. Obvious-
ly, this was a cumbersome and expensive process which added unnecessary
costs to personal lines insurance. Accordingly, legislation was enacted
to authorize multiple rating plans for personal lines insurance and
remove these unnecessary burdens and costs associated with offering
multiple rating plans for personal lines insurance.
The same rationale applies for commercial lines policies and this legis-
lation would similarly allow insurers to make available multiple rating
plans for commercial lines without having to form a subsidiary or affil-
iate company. To remain competitive, insurance companies, both commer-
cial and personal lines companies, need to be able to continually devel-
op new rating plans that introduce different rating elements that allow
them to better segment and price business. This bill allows insurers on
the commercial lines side to adopt these innovations in the most effi-
cient and cost effective way possible by authorizing the establishment
of an additional rating plan within the same insurance company.
It should be noted that, as is currently the case for personal lines
policies, each time a company develops a new rating plan, the plan would
be subject to the prior approval of the Superintendent of Financial
Services and would be provided only to new business customers.
 
LEGISLATIVE HISTORY:
New Bill
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.
STATE OF NEW YORK
________________________________________________________________________
8306
2021-2022 Regular Sessions
IN ASSEMBLY
October 20, 2021
___________
Introduced by M. of A. CAHILL -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to permitting insurers to
make available multiple rating programs for commercial insurance with-
in the same company
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 2352 of the insurance law, as added by chapter 457
2 of the laws of 2011, is amended to read as follows:
3 § 2352. Multiple rating programs. (a) Subject to the superintendent's
4 prior approval, an insurer may establish more than one rating program
5 within the same company for policies of insurance that are subject to
6 section three thousand four hundred twenty-five or section three thou-
7 sand four hundred twenty-six of this chapter; provided that:
8 (1) each rating program shall apply only to policies newly written on
9 or after the effective date of the rating program but prior to the
10 effective date of any subsequently approved rating program; provided
11 however if an insurer terminates a rating program, then the insurer
12 shall renew the policies that were subject to the terminated rating
13 program in a subsequently approved rating program.
14 (2) the provisions of subsection (f) of section three thousand four
15 hundred twenty-five and subsection (b) of section two thousand three
16 hundred forty-nine of this chapter shall be applied to each rating
17 program to which they are applicable separately.
18 (b) The superintendent may promulgate rules and regulations to imple-
19 ment the provisions of this section.
20 § 2. This act shall take effect on the ninetieth day after it shall
21 have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07531-01-1