STATE OF NEW YORK
Please be advised that determinations made in accordance with the requirements of Sections 7603 and 7606 of the New York State Insurance Law indicate that the net value of the Property/Casualty Insurance Security Fund as of December 31, 1997 was less than $150 million. Section 7603 provides that when the net value of the fund is less than $150 million, contributions shall be resumed. Such section further provides that if contributions are so resumed they shall be apportioned among those kinds of insurance for which payments were made from the fund during the fund year in which the net value was reduced below such amount, and among insurers in accordance with their respective amounts of net direct premiums written in each such kind of insurance.
During the fund year
ending December 31, 1997, payments were made from the Property/Casualty Insurance Security
Fund for various kinds of insurance as defined in Insurance Law Section 1113. Accordingly,
contributions to the Property/Casualty Insurance Security Fund shall be resumed on the
basis of "net direct written premiums" on policies insuring property or risks
located or resident in this state for each of the following Lines of Business as listed on
Page 15 (New York Business) of the Annual Statement. "Net direct written
premiums" equals column 2 minus column 4 on Page 15. The premiums and dividends in
column 2 and 4 respectively shall be adjusted to account for premiums subject to
contributions to the Public Motor Liability Security Fund. The contributions shall be made
on a quarterly basis by multiplying the factor listed by the 1998 quarterly net direct
written premium to which it applies.
The first quarterly payment will be due on or before June 30, 1998 for the quarter ending March 31, 1998. The required report forms, additional information and instructions will follow both in hard copy and on the Departments website.
Pursuant to regulations of the Federal Crop Insurance Corporation (7 CFR Part 400, subpart L), Multiple Peril Crop Insurance premiums on policies reinsured by the Federal Crop Insurance Corporation under its Standard Reinsurance Agreement continue to be exempt from contribution.
In view of the issue date of this Circular Letter Supplement, the late payment provisions of Section 7614 will not be imposed on an insurer unable to meet the June 30, 1998 due date. However, returns for the first quarter received after July 15, 1998 will be subject to the foregoing penalty provisions. Such insurer must submit a reasonable explanation for the delay.
Please acknowledge receipt of this letter and refer any questions