New York State Department of Financial Services announced on Monday that it issued new regulations to implement a recently adopted state law that deregulates most insurance business for large, sophisticated companies.
The law exempts insurers from rate filing and form approval requirements when issuing a policy to companies that generate annual commercial risk insurance premiums totaling over $25,000 in P/C insurance.
Businesses that retain special risk managers to assist in negotiating and purchasing policies would also qualify for this exemption. The law was signed by Gov. Andrew Cuomo last August.
The exemption allows insurers to issue policies to these insureds without submitting rate filings to the New York State Financial Services Department or obtaining the department superintendent’s prior approval for the sale of policies.
There are some exceptions, however. The exemption does not apply to workers’ comp, medical malpractice and certain other kinds of property/casualty insurance.
“The new law and regulation enhance the ability of insurers to underwrite large commercial insureds in New York, increase speed to market for certain insurance products not currently exempted and eliminate barriers to economic development in New York,” said the department superintendent Benjamin Lawsky.
An insurer using the exemption must still file with the superintendent a certificate of insurance documenting the terms of the policy within one business day of binding the insurance coverage, and a supplemental checklist and certification form that the department developed to facilitate compliance with this submission requirement, along with a copy of the certificate previously filed, within 30 days from the policy inception date.
To be eligible to use the exemption, an insurer must issue the policy to an entity that also meets the definition of a “large commercial insured,” the department said.
For example, a for-profit business entity could be considered a “large commercial insured,” if it generates annual gross revenues exceeding $15 million and has a net worth of at least $1.5 million.
A not-for-profit organization or public entity could be considered a “large commercial insured” if it has an annual budget exceeding $20 million for each of its three fiscal years immediately preceding the policy’s effective date, while a municipality could meet this definition if it has a population of at least 50,000 people.