The Emergency Regulation, effective April 21, 2014, conforms 11 NYCRR 27 to the requirements of the Non-Admitted and Reinsurance Reform Act of 2010 (“NRRA”). The amendments make the following changes to Insurance Regulation 41:
- Defines three new terms: “exempt commercial purchaser,” “insured’s home state,” and “United States.”
- Provides an exception for an Exempt Commercial Purchaser (“ECP”) consistent with Insurance Law Section 2118(b)(3)(F)
- Regarding ECPs requires:
- An excess line broker or the producing broker to affirm in part A or part C of the affidavit that the ECP was specifically advised in writing, prior to placement, that the insurance may or may not be available from the authorized market that may provide greater protection with more regulatory oversight.
- Requires an excess line broker to identify the insured’s home state in part A of the affidavit; and (4) clarify that the premium tax is to be allocated in accordance with Section 27.9 of Insurance Regulation 41 for insurance contracts that have an effective date prior to July 21, 2011
- Revises the address to which reports required by Section 27.7 should be submitted.
- Requires a licensed excess line broker to:
- Electronically file an annual premium tax statement unless the broker is granted an exemption pursuant to Section 27.23 of Insurance Regulation 41.
- Acknowledge that payment of the premium tax may be made electronically.
- Clarifies how an excess line broker must calculate the taxable portion of the premium for insurance contracts that have an effective date prior to July 21, 2011 and insurance contracts that have an effective date on or after July 21, 2011 and that cover property or risks located both inside and outside the United States.
- Requires an excess line broker to obtain, review, and retain certain trust fund information if the excess line insurer seeks an exemption from Insurance Law Section 1213.
- Requires an excess line insurer to file electronically with the NYDFS a current listing that sets forth certain individual policy details.
- Specifies that that in order to be exempt from Insurance Law Section 1213 pursuant to Section 27.16 of Insurance Regulation 41, an excess line insurer must establish and maintain a trust fund, and to permit an actuary who is a fellow of the Casualty Actuarial Society (FCAS) or a fellow in the Society of Actuaries (FSA) to make certain audits and certifications (in addition to a certified public accountant), with regard to the trust fund.
- Specifies that an excess line insurer will be subject to Insurance Law Section 1213 unless the contract of insurance is effectuated in accordance with Insurance Law Section 2105 and Insurance Regulation 41 and the insurer maintains a trust fund in accordance with Sections 27.14 and 27.15 of Insurance Regulation 41, in addition to other current requirements.
- Clarifies that the requirements set forth Sections 27.3 27.4, 27.5, 27.6, 27.10, 27.11, 27.12, 27.17, 27.18, 27.19, 27.20, and 27.21 apply when the insured’s home state is New York.
- Repeals existing Section 27.23 and adds new Section 27.23 titled, “Exemptions from electronic filing and submission requirements”. An insurer or excess line broker may request exemption from electronic filing and submission requirements; however, the request must be in writing and filed with the NYDFS at least 30 days prior to the filing due date. The request for exemption must:
- Identify the insurer’s NAIC number or the excess line broker’s New York license number;
- Identify the specific filing or submission the insurer or excess line broker is applying for the exemption;
- State whether the request for an exemption is based upon undue hardship, impracticability, or good cause;
- Provide a detailed explanation for the reason(s) why the request should be approved;
and - Specify whether the request for an exemption extends to future filings or submissions,
in addition to the specific filing or submission identified in the exemption request.
- Amends Appendix 4, which sets forth the premium tax allocation schedule, to apply to insurance contracts that have an effective date prior to July 21, 2011.
- Adds a new Appendix 5 setting forth the premium tax allocation schedule to apply to insurance contracts that have an effective date on or after July 21, 2011 and that cover property and risks located both inside and outside the United States.
11 NYCRR 27 (Insurance Regulation 41) (2014).
This post written by Kelly A. Cruz-Brown.
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