New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following opinion on January 7, 2003, representing the position of the New York State Insurance Department.

Re: Unaffiliated Not-for-Profit Cultural Institutions Seeking Group Property/Casualty Insurance

Question Presented:

May an authorized insurer issue a group policy of property/casualty insurance to various unaffiliated, nonprofit cultural institutions (e.g., dance companies, museums, theatres, etc.) in accordance with N.Y. Ins. Law § 3435 (McKinney 2000) and N.Y. Comp. Codes R. & Regs. tit. 11, § 153 (2001) (Regulation 135)?

Conclusion:

An authorized insurer may issue a group policy of property/casualty insurance to such institutions if the policy fulfills the standards, requirements and procedures of N.Y. Ins. Law § 3435 (McKinney 2000) and N.Y. Comp. Codes R. & Regs. tit. 11, § 153 (2001) (Regulation 135).

Facts:

An authorized insurer (the "Insurer") plans to issue a group policy of property/casualty insurance to various unaffiliated, nonprofit cultural institutions (e.g., dancing companies, museums, theatres, etc.) (the "Members"), which offer a range of cultural and educational activities to the public.

Analysis:

N.Y. Comp. Codes R. & Regs. tit. 11, § 153 (2001) (Regulation 135) implements N.Y. Ins. Law § 3435 (McKinney 2000) and establishes the standards, requirements and procedures for all property/casualty insurance policies issued on a group or quasi-group basis in New York. N.Y. Comp. Codes R. Regs. tit. 11, § 153.1(g) defines a "Group Policy," in relevant part, as "a policy underwritten and issued on a collective basis of: (i) property/casualty insurance insuring the interests of two or more persons or entities . . . ." Accordingly, the Policy would fall within this definition, and would not meet the exceptions of § 153.1(g)(2)(i)-(v).

The Insurer may issue a group policy to the Members if the standards, requirements and procedures of N.Y. Comp. Codes R. & Regs. tit. 11, § 153 (2001) are fulfilled. Regulation 135 requires, in relevant part, that: (i) all members of the group are nonprofit organizations (as defined in § 153.1(k)), N.Y. Comp. Codes R. & Regs. tit. 11, § 153.3(c)(4); (ii) all members of the group are homogenous in nature, § 153.3(c)(1); (iii) the group consists of no fewer than ten members (or at least five members if each member generates at least $5 million in annual revenues or annual premiums for such group total at least $500,000), engaged in similar activities giving rise to similar risks, based upon standards acceptable to the superintendent, § 153.3(c)(3); (iv) the group program is formed for purposes other than obtaining insurance, § 153.3(c)(2); and (v) the coverages are of the kinds permitted to be written on a group basis, § 153.3(c)(5).

Please note that the Insurance Department must approve all group policy forms pursuant to § 153.6 of Regulation 135.

For further information you may contact Senior Attorney Kristian Earl Lynch at the New York City Office.