Bill Text: NY S08128 | 2021-2022 | General Assembly | Introduced

---

Bill Title: Permits a waiver of the diligent effort requirement in limited circumstances for certain insurance coverage to be placed by licensed excess line brokers with unauthorized insurers where a retail producing insurance broker seeks to procure or place commercial lines insurance through an unaffiliated wholesale excess line insurance broker.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2022-04-04 - referred to insurance [S08128 Detail]

Download: New_York-2021-S08128-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                          8128

                    IN SENATE

                                    January 25, 2022
                                       ___________

        Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Insurance

        AN ACT to amend the insurance law, in relation to permitting a waiver of
          the diligent effort requirement in limited circumstances  for  certain
          insurance  coverage  to be placed by licensed excess line brokers with
          unauthorized insurers

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subparagraph  (A)  of  paragraph  3  of subsection (b) of
     2  section 2118 of the insurance law, as amended by section 12 of part I of
     3  chapter 61 of the laws of 2011, is amended to read as follows:
     4    (A) Except as provided in  subparagraph  (F)  of  this  paragraph  and
     5  subject  to  subparagraph (C) of this paragraph, submission of insurance
     6  documents to the excess line  association  shall  be  accompanied  by  a
     7  statement subscribed to, and affirmed by, the licensee or sublicensee as
     8  true  under  the  penalties  of perjury that, after diligent effort, the
     9  full amount of insurance required could not be procured, from authorized
    10  insurers, each of which is authorized to write  insurance  of  the  kind
    11  requested  and  which  the licensee has reason to believe might consider
    12  writing the type of coverage or class of insurance involved, and further
    13  showing that the amount  of  insurance  procured  from  an  unauthorized
    14  insurer is only the excess over the amount procurable from an authorized
    15  insurer.  The  licensee, however, shall be excused from affirming that a
    16  diligent effort, as defined above, was made to procure the coverage from
    17  authorized insurers if the licensee's affidavit is  accompanied  by  the
    18  affidavit  of another broker involved in the placement affirming as true
    19  under the penalties of  perjury  that,  after  diligent  effort  by  the
    20  affirming  broker,  the required insurance could not be procured from an
    21  authorized insurer which the affirming  broker  had  reason  to  believe
    22  might  consider  writing  the  type  of  coverage  or class of insurance
    23  involved. The licensee and the affirming broker shall  be  excused  from
    24  affirming  that  a diligent effort was made if the superintendent deter-
    25  mines, pursuant to paragraph four of this subsection, that  no  declina-
    26  tions  are  required.  Notwithstanding  any  provision  to  the contrary

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14301-01-2
        S. 8128                             2

     1  contained in   this chapter,   where   a  retail    producing  insurance
     2  broker   seeks  to procure  or place commercial lines insurance  through
     3  an  unaffiliated wholesale  excess  line  insurance broker,   both   the
     4  retail  producing  insurance broker and the wholesale excess line insur-
     5  ance broker shall be excused from making any diligent  effort  otherwise
     6  required by this article.
     7    §  2.  Section  2118  of  the insurance law is amended by adding a new
     8  subsection (g) to read as follows:
     9    (g) (1) As used in this section:
    10    (A) "retail producing insurance  broker"  means  an  insurance  broker
    11  licensee who directly deals with an insured;
    12    (B) "wholesale excess line insurance broker" means the licensed excess
    13  line  insurance  broker  from  whom or through whom the retail insurance
    14  broker has procured excess line coverage on behalf of the insured; and
    15    (C) "commercial lines insurance" means any  policy  of  insurance  not
    16  defined  as  a "covered policy" in subsection (a) of section three thou-
    17  sand four hundred twenty-five of this chapter.
    18    (2) A retail producing insurance broker and a  wholesale  excess  line
    19  insurance  broker  are  unaffiliated if such broker does not control, is
    20  not controlled by, or is not under common  control  with  the  other.  A
    21  retail  producing  insurance broker or a wholesale excess line insurance
    22  broker has control over the other if the broker: (A) directly  or  indi-
    23  rectly  or  acting  through one or more other persons owns, controls, or
    24  has the power to vote twenty-five percent or more of any class of voting
    25  securities of the other, or (B) controls in any manner the election of a
    26  majority of the directors or trustees of the other.
    27    § 3. This act shall take effect immediately, provided,  however,  that
    28  the  amendments  to subparagraph (A) of paragraph 3 of subsection (b) of
    29  section 2118 of the insurance law made by section one of this act  shall
    30  not  affect  the  expiration  of  such subsection and shall be deemed to
    31  expire therewith.