FOURTH AMENDMENT TO REGULATION 41
11 NYCRR 27
EXCESS LINE PLACEMENTS
I, Neil D. Levin, Superintendent of Insurance of the State of New York, pursuant to the authority granted by Sections 201, 301, 2101, 2104, 2105, 2110, 2116, 2117, 2118, 2121, 2122, 2130, 3103, 5907, 5911 and 9102 of the Insurance Law, Chapter 225 of the Laws of 1997 and Chapter 282 of the Laws of 1998, do hereby promulgate the following Fourth Amendment to 11 NYCRR 27 (Regulation 41), to take effect upon publication in the State Register, and to read as follows:
(New Matter Underscored, Matter in [Brackets] Deleted)
New subdivisions (o) and (p) are added to Section 27.1 to read as follows:
(o) "Binder" has the meaning ascribed by Section 2118(f)(2)(B) of the Insurance Law.
(p) "Binding authority" has the meaning ascribed by Section 2118(f)(2)(C) of the Insurance Law.
The sections 27.4 through 27.23 are renumbered 27.5 through 27.24.
A new Section 27.4 is added to read as follows:
Section 27.4 Binding Authority.
(a) Section 2118(f) of the Insurance Law provides that an excess line broker may execute an authority to bind coverage for risks located within or outside the State of New York and may exercise binding authority on behalf of an insurer not licensed or authorized to do business in this state.
(b) No excess line broker shall exercise binding authority in this state on behalf of an unauthorized insurer, unless:
(1) The placement conforms in all respects with section 2118 of the
insurance law and this Part; and
(2) The broker has filed with the excess line association, at least ten business days prior to exercising such binding authority, a signed copy of the written agreement between the broker and the insurer, setting forth all terms, conditions and limitations of the binding authority. A copy of any amendments to, or any notice of cancellation or termination of, the agreement shall be filed with the excess line association no later than ten business days after adoption thereof.
(c) The binding authority agreements filed pursuant to this section shall describe the authority granted to the excess line broker and include the following items:
(1) A description of the kinds or classes of insurance which the
broker may bind;
(2) The maximum dollar limits for any policy which the broker may bind and/or a provision requiring the risk to be submitted to the insurer;
(3) The maximum policy period for which the broker may bind;
(4) The geographical limits upon the exercise of binding authority by the broker; and
(5) Name and telephone number of the principal insurer contact person.
(d) The excess line association shall provide monthly reports to the superintendent that will include the information contained in paragraphs (1) through (4) of subdivision (c) of this section.
(e) The excess line association shall, upon request, furnish the superintendent with a copy of any agreement or amendment thereto, filed with it by an excess line broker pursuant to subdivision (b) of this section.
(f) The reports filed pursuant to subdivision (d) and any agreement filed pursuant to subdivision (e) of this section shall be considered confidential documents and shall not be available for inspection by the public.
(g) No binding authority shall permit an excess line broker to bind before January 18, 1998, and no excess line broker shall so bind.
Subdivision (c) of the new Section 27.11 (formerly section 27.10) is amended to read as follows:
(c) No excess line broker shall solicit for, bind coverage on behalf of, or act as an agent or representative of, an unauthorized insurer, except as provided for in section 27.4.
Subdivision (g) of the new Section 27.14 (formerly section 27.13) is amended to read as follows:
(g) (1) In the case of a group [located outside the United States] whose members consist of individual incorporated alien insurers who are not engaged in any business other than underwriting as a member of the group and individual unincorporated insurers, provided all the members are subject to the same level of solvency regulation and control by the groups domiciliary regulator[,];
(i) each syndicate in the group shall maintain[: (1)] a trust fund in the form of a trusteed account representing the [groups] syndicates gross liabilities attributable to excess line business written in the United States (exclusive of any marine insurance business, excluded from excess line business pursuant to Section 2117(b)(3) of the Insurance Law); and
[(2)] (ii) the group shall maintain in the form of a trusteed account a surplus in the amount of US$100,000,000 which shall be held jointly for the benefit of United States excess line policyholders of any member of the group.
(2) The superintendent may determine that a syndicate need not maintain in trust the full amount required by subparagraph (i) of paragraph (1) of this subdivision, based on such factors as the amount and nature of the business written by the syndicate, the quality and completeness of financial information provided to the superintendent, information provided to the superintendent by the groups domiciliary regulator, and the amount of jointly held funds which the group maintains in excess of the amount required by subparagraph (ii) of paragraph (1) of this subdivision. In no event, however, shall the superintendent determine that a syndicate may maintain less than 30% of its gross United States excess line liabilities.
Subdivision (c) of the new Section 27.17 (formerly Section 27.16) is amended to read as follows:
(c) No excess line broker shall deliver, or cause to be delivered by the producing broker any evidence of insurance or represent that insurance will be or has been written by any unauthorized insurer, unless the excess line broker is exercising binding authority pursuant to section 27.4 or has received confirmation from the insurer that the insurance has been bound.
I, Neil D. Levin, Superintendent of Insurance of the State of New York, do hereby certify that the foregoing is the fourth amendment to 11 NYCRR 27 (Regulation 41), promulgated by me on April 30, 1999, pursuant to the authority granted by Sections 201, 301, 2101, 2104, 2105, 2110, 2116, 2117, 2118, 2121, 2122, 2130, 3103, 5907, 5911 and 9102 of the Insurance Law, Chapter 225 of the Laws of 1997 and Chapter 282 of the Laws of 1998, to take effect upon publication in the State Register.
Pursuant to the provisions of the State Administrative Procedure Act, prior notice of the proposed amendment was published in the State Register on March 17, 1999. No other publication or prior notice is required by statute.
|April 30, 1999|