The Department has noted that inconsistency exists within the industry as to the classes
of business that should be classified as marine insurance, whether inland or ocean, and
which of these classes are subject to filing requirements pursuant to Article 23 of the
Insurance Law. The purpose of this Circular Letter is to (1) clarify what the Department
considers to be inland and ocean marine insurance and provide general guidelines and rules
of application for the classification and distinction of these kinds of insurance; (2)
specify which inland marine classes are subject to filing; and (3) establish uniformity in
the submissions to the Department.
However, this Circular Letter should not be
construed as a comprehensive list of all types of risks and coverages which may be
written, classified, or identified under marine or inland marine insuring powers; nor does
it mean that the types of risks and coverages described are solely marine or inland marine
insurance in all instances; nor does it contain all classes which are subject to filing.
For the purposes of this Circular
Letter, the following definitions shall apply:
INLAND MARINE INSURANCE pertains to the
insuring of property in transit over land; the insuring of property which is mobile by
nature and for which there is no fixed situs; and the insuring of property which are
instruments of communication or transportation such as bridges, tunnels, piers or
OCEAN MARINE INSURANCE is insurance
covering damage to ships or vessels and the goods they carry while on the ocean or inland
NATION-WIDE MARINE DEFINITION, as adopted
by the National Association of Insurance Commissioners, describes the kinds of risks and
coverages which may be classified or identified as marine, inland marine or transportation
insurance. New York adopted, with exceptions, the 1976 version of the nationwide
In addition to the provisions of
Section 1113 (a)(20) of the Insurance Law, the Department is also guided by the NAIC
Nation-Wide Marine Definition to determine whether a particular class or type of insurance
should be classified as marine or inland marine insurance. However, the Department does
take some exception to the 1976 Nation-Wide Marine definition. These exceptions are in the
Builders Risk and/or Installation Risks, Domestic Bulk Liquids, Difference in
Conditions and Electronic Data Processing classes. The exceptions follow:
Bridges, tunnels, et al. These
risks may be written as inland marine without qualification. Filing of rates, forms, etc.
will not be required.
Builders risk and/or installation
risk policies These risks may be written as inland marine until the earliest of the
(A) Occupancy of the structure by any
tenant for the purpose for which the structure was intended;
(B) Delivery to, or acceptance by, the
owner of the structure;
(C) Completion of the structure; or
(D) Issuance of a Certificate of Occupancy
or Completion covering the structure, by any appropriate governmental authority.
For policies covering more than one
structure, the foregoing rules of application shall apply separately to each structure.
As a manually rated class, rate and form
filings will still be expected for builders risk policies.
Domestic bulk liquids These risks
may be written as inland marine, provided that the tank is part of a larger pipeline
system. Filing of rates, forms, etc. will not be required. Freestanding tanks that are not
part of a pipeline system may not be written as inland marine.
Difference in condition (DIC) policies
These risks may be written as inland marine if and only if all of the underlying
policies also qualify as inland marine. For example, DIC policies written to insure real
property at a fixed site do not qualify as inland marine. A DIC policy written to fill the
gaps of an underlying inland marine policy would qualify as inland marine. Filing of
rates, forms, etc. will not be required.
Electronic data processing policies
These risks may be written as inland marine if the equipment being insured is of a
relatively transportable nature, and intended to be used in that manner. Equipment that is
intended to be used as part of a larger network or system does not qualify as inland
For example, a laptop or similar portable
personal computer would qualify as inland marine. Personal computers designed to be used
as terminals for a larger, mainframe network would not qualify as inland marine.
As manually rated risks, rate and form
filings will continue to be made for electronic data processing policies.
If a particular class or type of insurance
cannot reasonably be categorized within the Nation-Wide Marine Definition or
Section 1113(a)(20) of the Insurance Law, it should not be classified as
inland marine. If an insurer has any doubt as to where to place a particular class or type
of insurance, the matter should be submitted to the Department for review.
If a class or type of insurance is
identified as either ocean or inland marine, then it must be determined whether it is to
be a filed or unfiled class of business. Section 2302(a)(4) exempts marine risks from the
general filing requirements of rates, rules and forms. Section 2310(b) exempts inland
marine risks from the laws filing requirements if, by general custom of the
business, the specific risks in question are not written according to manual rates and
rating plans, unless the Superintendent directs that they be filed. Therefore, even though
the custom of the business may be that no filings be made for a particular inland marine
class, the Superintendent may direct that such filings be submitted to the Department for
Rates, loss costs and forms promulgated by
the principal rate organization, Insurance Services Office (ISO), for the various inland
marine classes constitute the general custom of the business. Accordingly, these classes
are subject to all the filing requirements under Article 23.
ISO supports and distributes advisory
forms, rates and rules for the following inland marine classifications:
Personal: bicycles, cameras, fine arts,
furs, golfers equipment, jewelry, musical instruments, personal articles, personal
effects, personal property floater, stamp and coin collection and silverware.
Commercial: accounts receivable, camera
and musical instrument dealers, commercial articles, equipment dealers, film, floor plan,
jewelers block for retail only up to $250,000 inventory, mail, physicians and
surgeons equipment, signs, theatrical property and valuable papers.
The Department considers all the above
classes to be filed classes subject to Article 23 of the Insurance Law.
The Department has also adopted guidelines
for an additional class as follows:
Pleasure boats 16 feet or less in length
are classified as inland marine. When coverage for these boats is provided by a
stand-alone policy, they are not subject to any filing requirements. However, if coverage
for any pleasure boat is provided by endorsement to a homeowners policy, then both
the forms and rates for this coverage are considered subject to all the filing
requirements and the experience for this coverage should be included with the
Any questions regarding the foregoing
should be directed to:
Gerald Scattaglia, Supervising Insurance
Property Bureau, 2nd floor
New York State Insurance Department
25 Beaver Street, New York, NY 10004