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A05718 Summary:

BILL NOA05718B
 
SAME ASSAME AS S05959-B
 
SPONSORKelles
 
COSPNSRFahy, Levenberg, Gonzalez-Rojas, Ardila, McMahon, Otis, Bronson, Lunsford, Epstein, Clark, Shrestha, Burdick, Reyes, Conrad, Shimsky, Stirpe, Jacobson, Simone, Steck, Burgos, Bores, McDonald, Rosenthal L, Raga, Thiele, Weprin
 
MLTSPNSRSimon
 
Amd 5913, Ins L; amd 311 & 370, V & T L
 
Authorizes certain policies issued by a risk retention group not chartered in this state but which is registered with the superintendent of financial services under the federal liability risk retention act of 1986, comprised entirely of organizations to which contributions are eligible for deduction under section 501(c)(3) of the internal revenue code and which qualifies as a charitable risk pool under section 501(n) of the internal revenue code.
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A05718 Actions:

BILL NOA05718B
 
03/22/2023referred to insurance
04/11/2023amend and recommit to insurance
04/11/2023print number 5718a
05/31/2023amend and recommit to insurance
05/31/2023print number 5718b
06/05/2023reference changed to ways and means
06/07/2023reported referred to rules
06/08/2023reported
06/08/2023rules report cal.704
06/08/2023substituted by s5959b
 S05959 AMEND=B WEBB
 03/23/2023REFERRED TO INSURANCE
 04/10/2023AMEND AND RECOMMIT TO INSURANCE
 04/10/2023PRINT NUMBER 5959A
 05/22/20231ST REPORT CAL.1188
 05/23/20232ND REPORT CAL.
 05/24/2023ADVANCED TO THIRD READING
 05/31/2023AMENDED ON THIRD READING 5959B
 06/05/2023PASSED SENATE
 06/05/2023DELIVERED TO ASSEMBLY
 06/05/2023referred to insurance
 06/08/2023substituted for a5718b
 06/08/2023ordered to third reading rules cal.704
 06/08/2023passed assembly
 06/08/2023returned to senate
 09/07/2023DELIVERED TO GOVERNOR
 09/15/2023SIGNED CHAP.438
 09/15/2023APPROVAL MEMO.8
 03/23/2023REFERRED TO INSURANCE
 04/10/2023AMEND AND RECOMMIT TO INSURANCE
 04/10/2023PRINT NUMBER 5959A
 05/22/20231ST REPORT CAL.1188
 05/23/20232ND REPORT CAL.
 05/24/2023ADVANCED TO THIRD READING
 05/31/2023AMENDED ON THIRD READING 5959B
 06/05/2023PASSED SENATE
 06/05/2023DELIVERED TO ASSEMBLY
 06/05/2023referred to insurance
 06/08/2023substituted for a5718b
 06/08/2023ordered to third reading rules cal.704
 06/08/2023passed assembly
 06/08/2023returned to senate
 09/07/2023DELIVERED TO GOVERNOR
 09/15/2023SIGNED CHAP.438
 09/15/2023APPROVAL MEMO.8
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A05718 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5718B
 
SPONSOR: Kelles
  TITLE OF BILL: An act to amend the insurance law and the vehicle and traffic law, in relation to owner's policies of liability insurance issued by a risk retention group not chartered within this state   PURPOSE: To allow risk retention groups which meet a minimum surplus requirement and which are registered in NYS to offer automobile insurance coverage to nonprofit organizations in this state.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends section 5913 of the Insurance Law to allow insurance coverage by a risk retention group pursuant to section 311 of the Vehi- cle and Traffic Law as amended in section 2 of this bill. Section 2 amends (b) and (c) of subdivision 4 of section 311 of the-Veh- icle and Traffic Law to include within the definition of "owner's policy of liability insurance" a policy issued by a Risk Retention Group (RRG) registered in New York State under the Federal Liability Risk Retention Act of 1986. Section 3 amends the opening paragraph of subdivision 5 of section 311 of the Vehicle and Traffic Law to allow a risk retention group author- ized to issue an owner's policy of liability insurance Section 4 amends subdivision 10 of section 311 of the Vehicle and Traf- fic Law to allow risk retention groups to issue insurance cards Section 5 amends the opening paragraph of subdivision 1 of section 370 of the vehicle and traffic law enables RRGs to file with the commission- er of motor vehicles a surety bond or policy of insurance Section 6 directs the superintendent of financial services to study the impact of this act three years after enactment of this law to be provided to the governor and legislature no later than four years after the effective date Section 7 is the effective date.   JUSTIFICATION: Nonprofit carshares are community-focused, membership-based services that provide access to cars for local trips to people who can't or choose not to buy their own vehicle. While there are a few carshares in NYS right now, the opportunity exists to significantly expand this service and its many benefits. This includes improved access to mobility for low- to moderate-income people and reducing transportation emissions as it has similar emissions reduction effects as public transit. However, due to a requirement that all insurers providing coverage in New York State be domiciled here, the state's only nonprofit "carshares will soon be unable to secure required automobile insurance and will be forced to close their operations. This legislation explicitly allows risk retention groups registered in New York State under the Federal Liability Risk Retention Act of 1986, and which are insuring 501(c) (3) nonprofit organizations exclusively, to be registered in and offer insurance coverage in New York State.   LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately.
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A05718 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         5718--B
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                     March 22, 2023
                                       ___________
 
        Introduced  by M. of A. KELLES, FAHY, LEVENBERG, GONZALEZ-ROJAS, ARDILA,
          McMAHON, OTIS, BRONSON, LUNSFORD, EPSTEIN, CLARK,  SHRESTHA,  BURDICK,
          REYES, CONRAD, SHIMSKY, STIRPE, JACOBSON, SIMONE, STECK, BURGOS, BORES
          --  Multi-Sponsored  by -- M. of A. SIMON -- read once and referred to
          the Committee on Insurance  --  committee  discharged,  bill  amended,
          ordered  reprinted  as  amended  and  recommitted to said committee --
          again reported from said committee with amendments, ordered  reprinted
          as amended and recommitted to said committee
 
        AN  ACT  to  amend the insurance law and the vehicle and traffic law, in
          relation to owner's policies of liability insurance issued by  a  risk
          retention group not chartered within this state
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 5913 of the insurance law, as added by chapter  109
     2  of the laws of 1988, is amended to read as follows:
     3    §  5913.  Financial  responsibility.  [Wherever] Except as provided in
     4  sections three hundred eleven and three hundred seventy of  the  vehicle
     5  and  traffic  law,  wherever  pursuant  to the laws of this state or any
     6  political subdivision of this state a demonstration of financial respon-
     7  sibility is required as a condition for obtaining a license or permit to
     8  undertake specified activities, if  any  such  requirement  may  not  be
     9  satisfied by obtaining insurance coverage from an insurer not authorized
    10  to  do  business in this state, such requirement may not be satisfied by
    11  purchasing insurance from a risk retention group not chartered  in  this
    12  state.    Every  insurance  policy  issued by a risk retention group not
    13  chartered in this state pursuant to sections three  hundred  eleven  and
    14  three  hundred  seventy of the vehicle and traffic law shall contain the
    15  notice set forth in section five thousand  nine  hundred  five  of  this
    16  article.
    17    §  2.  Paragraphs  (b)  and (c) of subdivision 4 of section 311 of the
    18  vehicle and traffic law, paragraph (c) as amended by chapter 200 of  the
    19  laws of 1974, are amended to read as follows:
    20    (b) In the case of a vehicle registered in this state, a policy issued
    21  by  (i) an insurer duly authorized to transact business in this state or
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10375-11-3

        A. 5718--B                          2
 
     1  (ii) a risk retention group not chartered in this  state  but  which  is
     2  registered  with  the  superintendent  under  the federal liability risk
     3  retention act of 1986, comprised  entirely  of  organizations  that  are
     4  tax-exempt  under section 501(c)(3) of the federal internal revenue code
     5  and where the risk retention group qualifies as a charitable  risk  pool
     6  under section 501(n) of the federal internal revenue code; or
     7    (c)  In the case of a vehicle lawfully registered in another state, or
     8  in both this state and another state, [either] (i) a policy issued by an
     9  authorized insurer, or (ii) a risk retention group not chartered in this
    10  state but which is registered with the superintendent under the  federal
    11  liability  risk  retention  act of 1986, comprised entirely of organiza-
    12  tions that are tax-exempt under section 501(c)(3) of the federal  inter-
    13  nal revenue code and where the risk retention group qualifies as a char-
    14  itable  risk  pool  under section 501(n) of the federal internal revenue
    15  code, or (iii) a policy issued by an unauthorized insurer authorized  to
    16  transact  business  in  another state if such unauthorized insurer files
    17  with the commissioner in form to be approved by [him] them  a  statement
    18  consenting  to  service  of  process and declaring its policies shall be
    19  deemed to be varied to comply with the requirements of this article; and
    20    § 3. The opening paragraph of subdivision 5  of  section  311  of  the
    21  vehicle  and traffic law, as amended by chapter 569 of the laws of 1981,
    22  is amended to read as follows:
    23    The term "certificate of insurance" shall mean any evidence issued  by
    24  or  on  behalf of an insurance company duly authorized to transact busi-
    25  ness in this state, or a risk retention group  authorized  to  issue  an
    26  owner's  policy  of  liability insurance pursuant to subdivision four of
    27  this section, stating in such form as the commissioner may prescribe  or
    28  approve  that  such  company  or such risk retention group has issued an
    29  owner's policy of liability insurance on the motor vehicle  or  vehicles
    30  designated  therein.    Such  certificate  shall  contain information as
    31  required by the commissioner including at least the following except  as
    32  otherwise provided:
    33    §  4. Subdivision 10 of section 311 of the vehicle and traffic law, as
    34  amended by chapter 103 of the laws  of  1972,  is  amended  to  read  as
    35  follows:
    36    10.  "Insurance Identification Card" shall mean a card issued by or on
    37  behalf of an insurance company or bonding  company  duly  authorized  to
    38  transact business in this state, or a risk retention group authorized to
    39  issue  an  owner's policy of liability insurance pursuant to subdivision
    40  four of this section, stating in  such  form  as  the  commissioner  may
    41  prescribe  or approve that such company or such risk retention group has
    42  issued an owner's policy of liability insurance or a financial  security
    43  bond  on  the  motor  vehicle  or vehicles designated therein. Such card
    44  shall contain such information and shall be valid during such period  as
    45  may  be  prescribed  by the commissioner. If an owner shall have filed a
    46  financial security deposit, or shall have qualified  as  a  self-insurer
    47  under  section three hundred sixteen of this [chapter] article, the term
    48  "insurance identification card" shall mean a card issued by the  depart-
    49  ment which evidences that such deposit has been filed or that such owner
    50  has so qualified.
    51    §  5.    The  opening paragraph of subdivision 1 of section 370 of the
    52  vehicle and traffic law, as amended by chapter 20 of the  laws  of  2002
    53  and  as  further  amended  by section 104 of part A of chapter 62 of the
    54  laws of 2011, is amended to read as follows:
    55    Every person, firm, association or corporation engaged in the business
    56  of carrying or transporting passengers for hire in any motor vehicle  or

        A. 5718--B                          3
 
     1  motorcycle,  except street cars, and motor vehicles or motorcycles owned
     2  and operated by a municipality, and except as otherwise provided in this
     3  section, which shall be operated over, upon or along any  public  street
     4  or  highway of the state of New York shall file with the commissioner of
     5  motor vehicles for each motor vehicle or motorcycle intended  to  be  so
     6  operated  evidence, in such form as the commissioner may prescribe, of a
     7  corporate surety bond or a policy of insurance[,]: (a)  approved  as  to
     8  form by the superintendent of financial services in a company authorized
     9  to  do  business  in  the  state,  approved  by the superintendent as to
    10  solvency and responsibility[,]; or (b) a risk retention group not  char-
    11  tered  in  this state but which is registered with the superintendent of
    12  financial services under the  federal liability  risk  retention  act of
    13  1986, comprised entirely of  organizations  that  are  tax-exempt  under
    14  section  501(c)(3)  of  the  federal internal revenue code and where the
    15  risk retention group qualifies as a charitable risk pool  under  section
    16  501(n)  of the federal internal revenue code. Such surety bond or policy
    17  of insurance shall be conditioned for the  payment  of  a  minimum  sum,
    18  hereinafter  called  minimum  liability,  on a judgment or judgments for
    19  damages, including damages for care and loss  of  services,  because  of
    20  bodily  injury  to,  or death of any one person in any one accident, and
    21  subject to such minimum liability  a  maximum  sum,  hereinafter  called
    22  maximum  liability  on  a  judgment  or judgments for damages, including
    23  damages for care and loss of services because of bodily  injury  to,  or
    24  death  of two or more persons in any one accident and for the payment of
    25  a minimum sum, called minimum liability on  all  judgments  for  damages
    26  because  of  injury  to  or destruction of property of others in any one
    27  accident, recovered against such person,  firm,  association  or  corpo-
    28  ration  upon  claims arising out of the same transaction or transactions
    29  connected with the same subject of action,  to  be  apportioned  ratably
    30  among the judgment creditors according to the amount of their respective
    31  judgments for damage or injury caused in the operation, maintenance, use
    32  or  the  defective  construction  of such motor vehicle or motorcycle as
    33  follows:
    34    § 6. Three years after the effective date of this act, the superinten-
    35  dent of financial services, in consultation  with  the  commissioner  of
    36  motor  vehicles,  shall  study  the  impact of this act to determine the
    37  efficacy of risk retention groups not chartered in  this  state  issuing
    38  vehicle  insurance  policies.  Such study shall examine certain factors,
    39  including, but not limited to: the quality and practicability of  cover-
    40  age  on  automotive accidents covered under such insurance policies, the
    41  magnitude of need and interest in  these  types  of  insurance  policies
    42  across  the  state,  customer  satisfaction and fiscal surety using such
    43  policies, the ability of the state to regulate such policies through the
    44  federal limited risk retention act, and other  data  as  is  practicable
    45  that  would  assess  the  potential  impact  on nonprofits that could be
    46  covered by the expansion of eligibility of these policies for  organiza-
    47  tions  that are tax-exempt under section 501(c)(3) of the federal inter-
    48  nal revenue code. Such superintendent shall report the findings and  any
    49  recommendations  of  such  study  to the governor and the legislature no
    50  later than four years after the effective date of this act.
    51    § 7.  This act shall take effect on  the  one  hundred  eightieth  day
    52  after it shall have become a law.
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