Regulatory Impact Statement for the Fourth Amendment to 11 NYCRR 60-2 (Insurance Regulation 35-D)

1. Statutory authority: Sections 202 and 302 of the Financial Services Law and Sections 301 and 3420 of the Insurance Law, Chapter 496 of the Laws 2012 and Chapter 11 of the Laws of 2013. Financial Services Law Sections 202 and 302 and Insurance Law Section 301 authorize the Superintendent of Financial Services (the "Superintendent") to prescribe regulations interpreting the provisions of the Insurance Law and to effectuate any power granted to the Superintendent under the Insurance Law.

Insurance Law Section 3420 sets forth standard provisions that must be included in all liability policies issued in this state. Insurance Law Section 3420(f)(2) requires motor vehicle liability insurers to provide, at the option of the insured, supplementary uninsured/underinsured motorists ("SUM") insurance coverage to all policyholders in New York State.

Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws of 2013 amended Insurance Law Section 3420 in relation to SUM coverage for fire companies, ambulance services, volunteer fire departments and voluntary ambulance services.

2. Legislative objectives: Insurance Law Section 3420 sets forth the minimum provisions that must be included in all liability policies issued in this state to protect the rights of injured persons. On December 17, 2012, Governor Andrew Cuomo signed Chapter 496 of the Laws of 2012, to take effect on April 16, 2013. This bill amended Insurance Law Section 3420(f) pertaining to SUM coverage for fire companies, ambulance services, and voluntary ambulance services. Subsequently, Chapter 11 of the Laws of 2013 was enacted on March 15, 2013, also to take effect on April 16, 2013. It amended Chapter 496 to further clarify the SUM coverage for employees and members of a fire department, fire company, ambulance service or voluntary ambulance service. The law now requires that policies providing SUM coverage that are issued or renewed on or after April 16, 2013 include such coverage for members and employees of fire departments, fire companies, ambulance services or voluntary ambulance services when the policy insures the fire department, fire company, ambulance service or voluntary ambulance service.

3. Needs and benefits: Insurance Regulation 35-D implements Insurance Law section 3420(f), which requires motor vehicle liability insurers to provide, at the option of the insured, SUM coverage to all policyholders in New York State. This amendment implements the provisions and purposes of Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws of 2013 by amending the definition of "insured" in the prescribed SUM endorsement contained in Insurance Law Section 60-2.3(f) to include members and employees of a fire department, fire company, ambulance service or voluntary ambulance service when the policy insures the fire department, fire company, ambulance service or voluntary ambulance service.

4. Costs: Motor vehicle insurers will incur some costs because they will have to revise policy forms and send them to their insureds. However, this is mandated by Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws of 2013.

This rule does not impose compliance costs on state or local governments. The Department of Financial Services does not anticipate that it will incur additional costs, although there will be an increased number of filings. However, insurers must use the language prescribed in the regulation and may not deviate from it.

5. Local government mandates: This rule does not impose any program, service, duty or responsibility upon a city, town, village, school district or fire district.

6. Paperwork: Insurance companies will have to submit appropriate filings.

7. Duplication: This rule will not duplicate any existing state or federal rule, but rather implement and conform to the federal requirements.

8. Alternatives: There are no alternatives to this amendment. The changes to the rule are mandated by Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws of 2013.

9. Federal standards: There are no federal standards.

10. Compliance schedule: Pursuant to Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws of 2013, all policies issued or renewed on or after April 16, 2013 covering fire departments, fire companies, ambulance services or voluntary ambulance services providing SUM coverage must include the coverage for such employees and members.

Statement setting forth the basis for the finding that the Fourth Amendment to 11 NYCRR 60-2 (Insurance Regulation 35-D) will not impose adverse economic impact or compliance requirements on small businesses or local governments

1. Small businesses: The Department of Financial Services ("Department") finds that this rule will not impose any adverse economic impact on small businesses and will not impose any reporting, recordkeeping or other compliance requirements on small businesses. The basis for this finding is that this rule is directed at property/casualty insurance companies licensed to do business in New York State, none of which falls within the definition of "small business" as found in State Administrative Procedure Act Section 102(8). The Department has monitored annual statements and reports on examination of authorized property/casualty insurers subject to this rule, and believes that none of the insurers falls within the definition of "small business", because there are none that are both independently owned and have fewer than one hundred employees.

2. Local governments: The rule does not impose any impacts, including any adverse impacts, or reporting, recordkeeping, or other compliance requirements on any local governments. The basis for this finding is that this rule is directed at property/casualty insurance companies, none of which are local governments.

Statement setting forth the basis for the finding that the Fourth Amendment to 11 NYCRR 60-2 (Insurance Regulation 35-D) will not impose adverse economic impact or compliance requirements on rural areas

The Department of Financial Services ("Department") finds that this rule does not impose any additional burden on persons located in rural areas, and the Department finds that it will not have an adverse impact on rural areas. This rule applies uniformly to regulated parties that do business in both rural and non-rural areas of New York State.

Statement setting forth the basis for the finding that the Fourth Amendment to 11 NYCRR 60-2 (Insurance Regulation 35-D) will not have a substantial adverse impact on jobs and employment opportunities

The Department of Financial Services finds that this rule should have no impact on jobs and employment opportunities. The rule implements the provisions and purposes of Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws of 2013 amending the definition of "insured" to provide coverage for members and employees of a fire department, fire company, ambulance service or voluntary ambulance service when the named insured is the fire department, fire company, ambulance service or voluntary ambulance service.