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

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following informal opinion on, June 20, 2005, representing the position of the New York State Insurance Department.

Re: Cancellation of Excess Line Insurance Policies

Question Presented

Although excess line insurance companies are exempt from the cancellation provisions of N.Y. Ins. Law § 3426(l)(2) (McKinney’s Supp. 2005), if an excess line insurance company voluntarily complies with a requirement of that section, would the insurance company then be bound to comply with all requirements of the section?

Conclusion

No. Pursuant to N.Y. Ins. Law § 3426(l)(2) (McKinney’s Supp. 2005), excess line insurance companies are exempt from this section of the New York State Insurance Law.

Facts

The inquirer inquired about an excess line insurance company. The inquirer stated that the excess line insurance company sent the inquirer a cancellation notification on a form that the inquirer believes was intended for use only by insurance companies that are subject to N.Y. Ins. Law § 3426 (McKinney’s Supp. 2005) and the inquirer further believes that such form is supplied by the Department. The inquirer asked whether the insurer subjected itself to N.Y. Ins. Law § 3426(l)(2) (McKinney’s Supp. 2005) by use of the cancellation form.

Analysis

N.Y. Ins. Law § 3426(l)(2) (McKinney’s Supp. 2005) states in relevant part that "[t]his section shall not apply to . . . policies written on an excess line basis, . . . ". An excess line insurance company is explicitly exempt from N.Y. Ins. Law § 3426 (McKinney’s Supp. 2005). Furthermore, the notification that the inquirer included with the inquirer’s inquiry was not a standard form that was issued by the Department. The Department has no standard notification forms for cancellations made pursuant to N.Y. Ins. Law § 3426 (McKinney’s Supp. 2005) or any other section of the Insurance Law. The use of the form did not make the insurer subject to N.Y. Ins. Law § 3426(l)(2) (McKinney’s Supp. 2005). The provisions of the insurance policy, which is a contract, would govern the insurer’s right to cancel.

For further information one may contact Susan Dess, Senior Attorney at the New York City Office.