A09088 Summary:

BILL NOA09088
 
SAME ASSAME AS S08127
 
SPONSORHunter
 
COSPNSRMcDonald, Thiele
 
MLTSPNSR
 
Amd §2118, Ins L
 
Simplifies the excess line insurance placement affidavit requirements.
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A09088 Actions:

BILL NOA09088
 
01/31/2022referred to insurance
05/04/2022reported
05/05/2022advanced to third reading cal.622
05/09/2022substituted by s8127
 S08127 AMEND= BRESLIN
 01/25/2022REFERRED TO INSURANCE
 02/14/20221ST REPORT CAL.490
 02/15/20222ND REPORT CAL.
 02/16/2022ADVANCED TO THIRD READING
 03/23/2022PASSED SENATE
 03/23/2022DELIVERED TO ASSEMBLY
 03/23/2022referred to insurance
 05/09/2022substituted for a9088
 05/09/2022ordered to third reading cal.622
 05/09/2022passed assembly
 05/09/2022returned to senate
 12/19/2022DELIVERED TO GOVERNOR
 12/30/2022SIGNED CHAP.833
 12/30/2022APPROVAL MEMO.110
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A09088 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9088
 
SPONSOR: Hunter
  TITLE OF BILL: An act to amend the insurance law, in relation to simplifying the excess line insurance placement affidavit requirements   PURPOSE OR GENERAL IDEA OF BILL: This legislation would streamline the excess line affidavit regarding declinations that are filed by both retail and wholesale insurance brokers when placing excess line transactions. The bill would reduce excessive reporting requirements that provide no benefit to insureds and allow brokers to focus on providing services that consumers need and value.   SUMMARY OF PROVISIONS: Section one - Amends subparagraph (C) of paragraph 3 of subsection (b) of section 2118 of the insurance law, as amended by chapter 684 of the laws of 1993, to simplify excess line insurance placement affidavit requirements. Section two - establishes the effective date.   JUSTIFICATION: The excess line market exists as a matter of public policy to insure risks which New York admitted insurers choose not to underwrite because the risks are distressed, unique, volatile, or involve new businesses or coverages without loss history. The legislature reasoned that New York businesses could not operate without a secondary market to insure risks that are rejected by licensed insurers. The excess line market is of vital importance to New York and nimble processing is essential to effectively serve consumer needs. The bill would reduce the number of data elements that a broker is required to collect and report for each of three declining licensed insurers from seven to three. The insurer name, NAIC number and the reason the broker believed the licensed insurer would consider under- writing the risk would still be recorded in an affidavit. The name of the insurer representative who declined the risk and their affiliation with the insurer, and the date and reason the risk was declined would no longer be recorded in the affidavit. Insurance brokers would still be required to file insurance coverage documents and affidavits with the Excess Line Association of New York (ELANY). The current affidavit forms are unduly complex, burdensome and time-con- suming to complete. As a result, mistakes are frequently made and time spent correcting the affidavits results in unnecessary delays to the detriment of consumers. Many submissions to insurers are made through web portals which generate either an electronic quote or a declination to insure the risk. A web portal declination does not contain the name of an individual or their affiliation (company employee, agent, other). The current affidavit requires this information, placing brokers in an untenable situation. Fewer than 20% of New York-licensed retail brokers place excess line business through wholesale brokers, averaging twenty-five annual trans- actions each. Of those retail brokers, 70% place less than 10 trans- actions with wholesale excess line brokers. This is a powerful indicator that retailers only go to wholesalers when the retailers' licensed markets refuse to insure a risk and that most retail brokers have little experience in completing the excess line placement affidavit. New York is among a minority of states that require the filing of decli- nation information for each policy and the only state that requires twenty-one elements in total for three separate declinations. An excess line broker that is required to file declinations and also allocate tax liability for non-U.S. risk exposures must currently submit seventy-one affidavit data elements. The bill would reduce declination data elements from twenty-one to nine.   PRIOR LEGISLATIVE HISTORY: New Bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: Immediately.
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A09088 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9088
 
                   IN ASSEMBLY
 
                                    January 31, 2022
                                       ___________
 
        Introduced by M. of A. HUNTER -- read once and referred to the Committee
          on Insurance
 
        AN ACT to amend the insurance law, in relation to simplifying the excess
          line insurance placement affidavit requirements
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subparagraph (C)  of  paragraph  3  of  subsection  (b)  of
     2  section 2118 of the insurance law, as amended by chapter 684 of the laws
     3  of 1993, is amended to read as follows:
     4    (C) Every licensee, or affirming broker, in connection with the place-
     5  ment of each risk pursuant to this section not otherwise exempt from the
     6  diligent    effort  requirement,  shall record on the affidavit required
     7  pursuant to subparagraph (A) of this paragraph the name   and   national
     8  association   of insurance commissioners code of each authorized insurer
     9  declining a risk and information relied upon that formed  the  basis  of
    10  such licensee's or affirming broker's reason to believe that the author-
    11  ized  insurer  might  consider  writing the type of coverage or class of
    12  insurance involved. No additional diligent effort information  shall  be
    13  reported on the affidavit.
    14    §  2.  This act shall take effect immediately, provided, however, that
    15  the amendments to subparagraph (C) of paragraph 3 of subsection  (b)  of
    16  section  2118 of the insurance law made by section one of this act shall
    17  not affect the expiration of such subsection  and  shall  be  deemed  to
    18  expire therewith.
 
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14285-01-2
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A09088 LFIN:

 NO LFIN
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