BILL NUMBER: S10582
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law, in relation to extending provisions
of the property/casualty insurance availability act and the authority of
the New York property insurance underwriting association
 
PURPOSE:
This bill would extend several provisions of the Insurance Law that
promote the stability of the property/casualty insurance market.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill would amend Insurance Law § 2342 to extend the
sunset dates for Insurance Law §§ 2307(c), 2308, 2310(a), 2316, 2320,
2323, 2326, 2335, and 2336(b) for three years to June 30, 2029.
Section 2 would amend Insurance Law § 2305(f) to extend, until June 30,
2029, provisions in Insurance Law § 2305(a) relating to prior approval
of certain insurance rates.
Section 3 would amend Insurance Law § 2344(h) to extend, until June 30,
2029, the applicability of the flexible rate limitations in problem
markets for certain commercial property/casualty insurance rates.
Section 4 would amend Insurance Law § 3425(m) to extend, until June, 30,
2029, the "two percent rule" and "two-for-one credit" set forth in
Insurance Law § 3425(f), which pertain to non-renewal requirements for
voluntary noncommercial motor vehicle insurance.
Section 5 would amend Insurance Law § 5412(g) to extend, until June 30,
2029, provisions allowing NYPIUA to write certain coverage upon a deter-
mination by the Superintendent that coverage is unavailable in a partic-
ular market.
Section 6 would provide for an immediate effective date.
 
JUSTIFICATION:
This bill extends the expiration dates of certain provisions of Insur-
ance Law Article 23, which pertains to property/casualty insurance
rates. Extending the expiration dates for these provisions assures the
insurance industry that the file-and-use and flexible rating provisions
set forth in Article 23 will stay in effect for the next three years.
These file-and-use and flexible rating approaches enable insurers to
respond more quickly to changing market conditions in a more expeditious
manner than the prior approval approach, to which the law would revert
if these key provisions of Article 23 are permitted to expire.
In addition, the bill extends provisions set forth in Insurance Law
3425(f). Section 3425 contains the minimum nonrenewal and cancellation
requirements for most voluntarily written personal lines insurance.
Specifically, § 3425(f) establishes the "two percent rule" for personal
motor vehicle insurance, which permits an insurer to nonrenew or condi-
tionally renew up to a maximum of two percent of the total number of
motor vehicle covered policies in force at last year-end in each of the
insurer's rating territories, and the "two for-one credit", which
provides that an insurer may nonrenew or conditionally renew one addi-
tional motor vehicle policy in each territory beyond the two percent
limitation, for every two newly issued automobile insurance policies
voluntarily written by that insurer in such territory. Section 3425
provides an equitable balance among the often-competing forces of poli-
cyholders' expectations, insurers' legitimate prerogatives in evaluating
and assuming risk, and the realities of the non-commercial motor vehicle
insurance marketplace. It provides the foundation for a reliable noncom-
mercial motor vehicle insurance market that promotes stability and
protects consumers against arbitrary cancellation or nonrenewal of
coverage.
Finally, the bill extends the sunset dates for Insurance Law §§ 5402(g)
and 5412(g), promoting the availability and affordability of
property/casualty insurance and the stability of the property/casualty
insurance market in New York by extending the Superintendent's authority
to authorize NYPIUA to write broad form coverage and coverage for an
underserved market.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S10582: 2342 insurance law, 2305 insurance law, 2305(f) insurance law, 2344 insurance law, 2344(h) insurance law, 5412 insurance law, 5412(g) insurance law