Circular Letter No. 11 (2006)

May 8, 2006

STATUTORY REFERENCE:  INSURANCE LAW SECTIONS 7603 AND 7606

Calculations made in accordance with the requirements of Sections 7603 and 7606 of the New York Insurance Law indicate that the net value of the Property/ Casualty Insurance Security Fund as of December 31, 2005 was less than $150 million. In accordance with Section 7603(c)(1), additional contributions are due after the determination that the net value is less than $150 million.

The first quarterly filing will be due on or before May 15, 2006; the second, third, and fourth quarter filings will be due on August 15, 2006, November 15, 2006 and February 15, 2007 respectively. The required report forms, additional information and instructions will follow both in hard copy and on the Department's website.

In view of issue date of this Circular Letter, the late payment provisions of Section 7614 will not be imposed on an insurer for the first quarterly filing, provided the insurer submits these filings by May 31, 2006.

During the fund year ending December 31, 2005, payments were made from the Property/Casualty Insurance Security Fund for various kinds of insurance as defined in Insurance Law Section 1113. Accordingly, contributions to the Property/Casualty Insurance Security Fund shall be continued on the basis of "net direct written premiums" on policies insuring property or risks located or resident in this state for each of the following Lines of Business as listed on Page 30 (New York Business) of the Annual Statement. "Net direct written premiums" equals column 1 minus column 3 on Page 30. The premiums and dividends in column 1 and 3 respectively shall be adjusted to account for premiums subject to contributions to the Public Motor Vehicle Liability Security Fund. The contributions shall be made on a quarterly basis by multiplying the factor listed by the 2006 quarterly net direct written premium to which it applies.

Pursuant to regulations of the Federal Crop Insurance Corporation (7 CFR Part 400, subpart L), Multiple Peril Crop Insurance premiums on policies reinsured by the Federal Crop Insurance Corporation under its Standard Reinsurance Agreement continue to be exempt from contribution.

Please acknowledge receipt of this letter and refer any questions to: