STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
NOTE: WITHDRAWN EFFECTIVE AUGUST 14, 2003
|Supplement No. 1 to Circular Letter No. 21
September 20, 2001
|TO:||All Insurers Licensed to Write Private Passenger Automobile Insurance In New York State|
|RE:||Section 2349 (Multi-tiering) and Sunset of Portions of Section 3425|
|STATUTORY REFERENCES: Sections 2349 and 3425 of the Insurance Law|
|Recently issued Circular Letter No. 21, dated August 8, 2001,
provided guidance to insurers in meeting their obligations under the law subsequent to the
expiration on August 2, 2001 of certain provisions of New York Insurance Law (NYIL)
Section 3425 and Article 23, relating to covered policies of "automobile
insurance", as defined in §3425(a)(1). Since §3425(f) has expired while §2349(b)
has not, insurers have requested additional guidance with respect to the relationship
between the expiration of §3425(f) and the provisions of §2349(b) and Regulation 150 (11
NYCRR 154.3), specifically regarding the "three-percent" and
"two-for-one" rules in connection with private passenger motor vehicle
As stated in Circular Letter No. 21 (2001), the provisions in question expired only in connection with new policies issued on or after August 2, 2001. Further, §3425(f) remains applicable to policies issued on or before August 1, 2001. The affected policies cover motor vehicles used primarily for non-business purposes, other than policies issued by the New York Automobile Insurance Plan pursuant to NYIL Article 53.
Regulation 150, in §154.3, clarifies the relationship between §3425(f) and §2349(b). Section 154.3(b) states that the three-percent limit is in addition to the two-percent limit. Section 154.3(e) provides that the two-for-one new business credit in §3425(f)(2) shall apply to the two-percent and three-percent limitations as follows: for every two new policies written, an insurer may either nonrenew one additional policy in excess of the two-percent limitation or may uptier one additional policy in excess of the three percent limitation. Unlike the three-percent limit, which was in addition to the two-percent limit, the uptiering two-for-one rule actually served to limit the two-for-one rule for nonrenewals and conditional renewals.
The Superintendent has determined that, consistent with the Legislatures intent in enacting §2349, an insurer may apply the two-for-one rule to implement a nonrenewal or conditional renewal only for business written on or before August 1, 2001, while it may apply the rule to implement an uptier increase for any business, regardless of when it was originally written. Therefore:
Please acknowledge receipt of this letter, and address any questions or problems concerning this subject, to Alan Goren, Associate Insurance Examiner, Property Bureau, at the above address, by e-mail at email@example.com, or at 212-480-5598.
Very truly yours,