S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8949
 
                           I N  A S S E M B L Y
 
                              January 9, 2018
                                ___________
 
 Introduced  by M. of A. BRONSON -- read once and referred to the Commit-
   tee on Insurance
 
 AN ACT  to  amend  the  insurance  law,  in  relation  to  enacting  the
   "construction insurance transparency act of 2017" requiring all insur-
   ers  which  issue  policies  of  liability  insurance insuring against
   claims made in reliance upon the duty imposed by the "scaffold law" to
   file annual financial statements and  detailed  claim  data  with  the
   superintendent of financial services
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  This  act  shall  be  known  and  may  be  cited  as  the
 "construction insurance transparency act of 2017".
   §  2.  Declarations  of  legislative  findings. The legislature hereby
 finds and declares that persons,  corporations,  associations  or  other
 business  entities  which issue policies of liability insurance insuring
 an owner of real property or a contractor who  is  performing  work  and
 services  on  real  property  against  claims  made in reliance upon the
 duties imposed upon such parties  by  section  240  of  the  labor  law,
 commonly  referred  to  as  the "scaffold law", owe an obligation to the
 public, to those they insure and to those  who  may  in  the  future  be
 insured  by  them,  to fully disclose in a public and transparent manner
 all elements relating to the premiums paid for such insurance, the meth-
 od and manner in which such premiums are  determined  and  imposed  upon
 insureds,  and  claims  made  by  injured persons who rely on owners and
 contractors to provide a safe and secure worksite as  required  in  such
 section  of  such  law. It is essential that the public be made aware of
 such an insurer's responsibility  to  inform  them  of  their  financial
 condition and solvency, and the details and specifics of the factors and
 circumstances behind its financial solvency as well as the basis for the
 rates they charge to owners and contractors to obtain such coverage. The
 determination  of  premiums  for such liability insurance policy in this
 state has, unfortunately, gone on too long in obscurity, with even those
 who bear the cost of premiums unable to learn why prices are set as they
 are. As a matter of public trust, liability insurers should be  required
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD07100-01-7

 A. 8949                             2
 
 to make the public aware of the pertinent facts related to their premium
 determinations  and  financial  solvency by disclosing all the pertinent
 facts as provided for in this section. It is the further  sense  of  the
 legislature  that  this  data  should be disclosed in an open and public
 manner, and should be made available without undue cost and delay.
   § 3. The insurance law is amended by adding a new section 343 to  read
 as follows:
   §  343.  FINANCIAL  STATEMENT AND DETAILED CLAIM DATA TO BE FILED WITH
 THE SUPERINTENDENT. (A) FOR PURPOSES OF THIS SECTION, THE TERM "INSURER"
 SHALL MEAN ANY PERSON, CORPORATION, ASSOCIATION OR OTHER BUSINESS ENTITY
 WHICH ISSUES A POLICY OF LIABILITY INSURANCE INSURING  A  CONTRACTOR  OR
 OWNER  OF  REAL PROPERTY LOCATED IN THIS STATE AGAINST CLAIMS MADE BY AN
 INJURED WORKER, THE CLAIM FOR WHICH IS MADE IN RELIANCE  UPON  THE  DUTY
 OWED  TO  SUCH  WORKER PURSUANT TO THE PROVISIONS OF SECTION TWO HUNDRED
 FORTY OF THE LABOR LAW.
   (B) ON OR BEFORE APRIL FIRST OF EACH YEAR, EVERY INSURER SHALL FOR THE
 PRIOR CALENDAR YEAR PROVIDE THE SUPERINTENDENT AND  THE  PUBLIC  WITH  A
 DETAILED  FINANCIAL  STATEMENT  TO  SUPPLEMENT AND EXPAND UPON ANY OTHER
 INFORMATION OTHERWISE PROVIDED TO THE DEPARTMENT AS IT RELATES AN INSUR-
 ER'S PROVISION OF LIABILITY INSURANCE COVERAGE TO OWNERS OF REAL PROPER-
 TY OR CONTRACTORS PERFORMING SERVICES TO OWNERS  OF  REAL  PROPERTY  FOR
 CLAIMS  MADE  BY  AN  INJURED  PERSON  IN RELIANCE UPON THE DUTY OWED BY
 SECTION TWO HUNDRED FORTY OF THE LABOR LAW; PROVIDED, HOWEVER, THAT  THE
 INITIAL  FINANCIAL  STATEMENT SO FILED BY AN INSURER AFTER THE EFFECTIVE
 DATE OF THIS SECTION SHALL INCLUDE  THE  INFORMATION  REQUIRED  IN  THIS
 SUBDIVISION  NOT  ONLY  FOR  SUCH  PRIOR  CALENDAR YEAR BUT ALSO FOR THE
 PREVIOUS NINE CALENDAR YEARS PRIOR TO SUCH REPORT.  THE FINANCIAL STATE-
 MENT SHALL, IN DEPTH, SEPARATE THE COST OF PROVIDING SECTION TWO HUNDRED
 FORTY OF THE LABOR LAW BASED COVERAGE FROM THE COST OF PROVIDING GENERAL
 LIABILITY INSURANCE INSURING THE SAME OWNER OR CONTRACTOR  WITH  RESPECT
 TO  THE  SAME PROPERTY AND SHALL CONTAIN AT LEAST THE FOLLOWING INFORMA-
 TION RELATING TO COVERAGE PURSUANT TO SUCH SECTION:  (1) THAT PORTION OF
 PREMIUMS ASSESSED AND ATTRIBUTABLE TO PROVIDING SUCH COVERAGE; (2)  PAID
 JUDGMENTS,  SETTLEMENTS OR LOSSES RESULTING FROM SUCH COVERAGE; (3) CASE
 RESERVES FOR LOSSES WHICH MAY BE ATTRIBUTABLE TO COVERAGE; (4)  INCURRED
 BUT  NOT  REPORTED LOSS ESTIMATES WHICH MAY BE ATTRIBUTABLE TO COVERAGE;
 (5) PAID DEFENSE AND  COST  CONTAINMENT  EXPENSES  ATTRIBUTABLE  TO  ANY
 CLAIMS  MADE BASED UPON SUCH COVERAGE; (6) CASE RESERVES FOR DEFENSE AND
 COST CONTAINMENT EXPERIENCE ATTRIBUTABLE TO ANY CLAIMS MADE  BASED  UPON
 SUCH  COVERAGE;  (7) INCURRED BUT NOT REPORTED DEFENSE AND COST CONTAIN-
 MENT ESTIMATES BASED UPON SUCH COVERAGE; (8) PREMIUM AND LOSS EXPERIENCE
 IDENTIFIED BY POLICY LIMITS AND DEDUCTIBLES; (9) NUMBER OF CLAIMS INITI-
 ATED AND CLOSED; (10) NUMBER OF CLAIMS CLOSED WITH LOSS  PAYMENTS;  (11)
 NUMBER OF OPEN CLAIMS AT THE TIME SUCH STATEMENT IS PREPARED; (12) OTHER
 EXPENSES  BY CATEGORY AS DETERMINED BY THE SUPERINTENDENT TO REFLECT THE
 COST TO THE INSURER TO PROVIDE SUCH COVERAGE  AS  PART  OF  A  LIABILITY
 INSURANCE  POLICY;  (13) INVESTMENT INCOME REALIZED FROM THAT PORTION OF
 THE PREMIUM PAID FOR A POLICY PROVIDING SUCH COVERAGE; (14)  THE  AMOUNT
 OF EXPOSURE TO THE INSURER RESULTING FROM THE PROVISION OF SUCH COVERAGE
 AND  WHETHER  THE  INSURER  HAS  LIMITED THE AMOUNT OF COVERAGE PROVIDED
 TOGETHER WITH AN ESTIMATE OF THE AMOUNT WHICH MIGHT BE REQUIRED  OF  THE
 INSURED  TO  PURCHASE FURTHER COVERAGE FROM AN OUT OF STATE EXCESS LINES
 PROVIDER, BASED UPON CURRENT DATA AVAILABLE TO SUCH  IN-STATE  PROVIDER,
 ESPECIALLY  WHERE  SUCH  IN-STATE  PROVIDER  OPERATES  AS AN EXCESS LINE
 INSURER FOR RISKS IN ANOTHER STATE; (15) AMOUNTS SPENT  BY  INSURER  FOR
 RISK  MANAGEMENT  PROGRAMS,  OR  REQUIRED TO BE SPENT BY INSUREDS AT THE

 A. 8949                             3
 
 BEHEST OF THE INSURER, WHICH  PROGRAMS  ARE  DESIGNED  AND  INTENDED  TO
 PROMOTE  WORKSITE  SAFETY,  MORE  PARTICULARLY  AS  IT RELATES TO HEIGHT
 RELATED ACCIDENTS COVERED BY SECTION TWO HUNDRED FORTY OF THE LABOR LAW;
 AND (16) THE AFOREGOING EXPERIENCE AND INFORMATION FURTHER SUBDIVIDED BY
 QUALITY OF RISK AS MEASURED BY PRIOR LOSS EXPERIENCE, CONTRACTOR PAYROLL
 RANGES,  CONTRACTOR  NUMBER  OF EMPLOYEE RANGES, RISK MANAGEMENT PARTIC-
 IPATION, AND OTHER RELEVANT  IDENTIFIABLE  DIFFERENCES  IN  EXPOSURE  TO
 INSURANCE  LOSS. THE DATA PROVIDED BY INSURERS SHALL BE SEPARATED OUT SO
 THAT A DETERMINATION CAN BE MADE THAT A CLAIM  MADE  OR  PAID  IS  BASED
 PARTIALLY  OR  TOTALLY  UPON SECTION TWO HUNDRED FORTY OF THE LABOR LAW;
 COVERAGE, AND NOT ANY OTHER PROVISION OF STATUTORY OR COMMON LAW  IMPOS-
 ING  ANOTHER  OR  DIFFERENT  OR  SEPARATE STANDARD OF CARE OR DUTY TO AN
 INJURED PARTY.  SUCH FINANCIAL STATEMENT SHALL INCLUDE THE  ENTIRETY  OF
 SUCH  INSURER'S  BUSINESS ACTIVITIES INSURING AGAINST RISKS OCCURRING IN
 THIS STATE AND SHALL BE IN A FORM DETERMINED BY THE SUPERINTENDENT.  THE
 FORM SHALL BE SUFFICIENTLY ITEMIZED IN A MANNER THAT ALLOWS FOR AN ACTU-
 ARIALLY  SOUND  ANALYSIS  OF THE INCOME REALIZED BY THE INSURER FROM ALL
 SOURCES DURING SUCH YEAR, INCLUDING BUT NOT LIMITED TO PREMIUMS, INVEST-
 MENT INCOME, AND ANY OTHER CATEGORY OR CATEGORIES OF  INCOME  AS  DETER-
 MINED  BY THE SUPERINTENDENT TO REFLECT THE FULL DISCLOSURE REQUIREMENTS
 OF THIS SECTION AND THAT PORTION WHICH MAY BE  SPECIFICALLY  RELATED  TO
 SUCH COVERAGE. AT A MINIMUM, SUCH INFORMATION SHALL CONSIST OF THE ITEMS
 SET  FORTH IN THE STATEMENT OF INCOME, EXCLUDING THE CAPITAL AND SURPLUS
 ACCOUNT SECTION OF THE PROPERTY/CASUALTY STATUTORY ANNUAL STATEMENT,  AS
 APPLICABLE  TO  THE  INSURER'S  NEW  YORK STATE BUSINESS, AS WELL AS THE
 OTHER INFORMATION DELINEATED IN THIS SUBSECTION. SUCH  FINANCIAL  STATE-
 MENT  SHALL  ALSO CONTAIN A COMPREHENSIVE AND DETAILED DISCLOSURE OF THE
 INSURER'S EXPENSES ACTUALLY INCURRED AND PAID DURING SUCH CALENDAR YEAR,
 TO INCLUDE NORMAL BUSINESS EXPENSES, SALARIES,  COMMISSIONS,  CONSULTING
 FEES,  LEGAL  EXPENSES,  ADVERTISING COSTS AND ANY OTHER CATEGORY DEEMED
 PERTINENT TO THE INTENT OF THIS  SECTION.  AT  A  MINIMUM,  THE  EXPENSE
 INFORMATION  REQUIRED SHALL CONSIST OF THE ITEMS SET FORTH IN THE UNDER-
 WRITING  AND  INVESTMENT  EXHIBIT  -  PART   3   -   EXPENSES   OF   THE
 PROPERTY/CASUALTY  STATUTORY  ANNUAL  STATEMENT,  AS  APPLICABLE  TO THE
 INSURER'S NEW YORK STATE BUSINESS. WITH RESPECT TO  SALARIES  (INCLUDING
 ALL  OTHER FORMS OF COMPENSATION), EACH INSURER SHALL ITEMIZE THE SALARY
 OF THE TWENTY MOST HIGHLY COMPENSATED EMPLOYEES OF SUCH  INSURER  DURING
 SUCH  YEAR,  PROVIDED  THAT  THE  NAMES  OF  SUCH  EMPLOYEES NEED NOT BE
 DISCLOSED.  SUCH FINANCIAL STATEMENT SHALL ALSO PROVIDE THE PUBLIC  WITH
 A  SYNOPSIS  OF CLAIMS OR SETTLEMENTS PAID FOR SECTION TWO HUNDRED FORTY
 OF THE LABOR LAW COVERAGE PURSUANT TO SUCH POLICIES OR CONTRACTS,  LIST-
 ING THE TOTAL OF SUCH CLAIMS AND SETTLEMENTS ATTRIBUTABLE TO SUCH COVER-
 AGE.  AT  A MINIMUM, THE CLAIM INFORMATION REQUIRED SHALL CONSIST OF THE
 ITEMS  SET  FORTH  IN  THE  EXHIBIT  OF  PREMIUMS  AND  LOSSES  OF   THE
 PROPERTY/CASUALTY  STATUTORY  ANNUAL  STATEMENT,  AS  APPLICABLE  TO THE
 INSURER'S NEW YORK STATE BUSINESS AND IDENTIFIED AND  CATEGORIZED  SEPA-
 RATELY  FOR  EACH ZIP CODE IN THIS STATE. SUCH FINANCIAL STATEMENT SHALL
 BE SIGNED AND ATTESTED AS FULL, COMPLETE AND ACCURATE BY THE CHIEF EXEC-
 UTIVE OFFICER OF THE INSURER, AND HE OR SHE  SHALL  BE  HELD  PERSONALLY
 RESPONSIBLE  WITH  RESPECT TO THE ACCURACY OF THE CONTENT OF SUCH STATE-
 MENT. THE SUPERINTENDENT SHALL PROVIDE INSURERS WITH A METHOD TO  SUBMIT
 THEIR FINANCIAL STATEMENTS ELECTRONICALLY VIA THE INTERNET, WHICH METHOD
 SHALL  INCLUDE  INSTRUCTIONS RELATING TO THE USE OF AN ELECTRONIC SIGNA-
 TURE WHICH SHALL BE SUBJECT TO, AND SUBMITTED IN ACCORDANCE WITH SECTION
 THREE HUNDRED SIXTEEN OF THIS ARTICLE; PROVIDED, HOWEVER, THAT NO EXCEP-
 TION AUTHORIZED IN SUCH SECTION MAY BE REQUESTED OR GRANTED.

 A. 8949                             4
 
   (C) ON OR BEFORE APRIL FIRST OF EACH YEAR, EVERY INSURER SHALL PROVIDE
 THE SUPERINTENDENT WITH DETAILED CLOSED CLAIM INFORMATION FOR  THE  SAME
 INSURANCE COVERAGE AS PROVIDED FOR IN SUBSECTION (B) OF THIS SECTION FOR
 THE  MOST  RECENTLY  CONCLUDED  CALENDAR  YEAR. UNTIL THE SUPERINTENDENT
 PROMULGATES  DATA  COLLECTION  FORMS  AND PROCEDURES FOR THE ITEMIZATION
 REQUIREMENTS, DATA SHALL BE COLLECTED USING,  AT  A  MINIMUM,  THE  MOST
 RECENT PUBLICLY AVAILABLE FORMS REQUIRED BY LAW, OR COMMONLY USED IN THE
 INSURANCE  INDUSTRY.  THE SUPERINTENDENT MAY REQUIRE ADDITIONAL INFORMA-
 TION BEYOND THAT WHICH MAY OTHERWISE BE CURRENTLY REQUIRED IF HE OR  SHE
 DEEMS  IT  NECESSARY  AND WARRANTED WITHOUT THE NEED TO FORMALLY ADOPT A
 RULE OR REGULATION PROVIDED SUCH  REQUIREMENT  IS  CONSISTENT  WITH  THE
 INTENT  OF  THIS  SECTION.  SUCH DETAILED CLAIM DATA SHALL BE SIGNED AND
 ATTESTED AS FULL, COMPLETE AND ACCURATE BY THE CHIEF  EXECUTIVE  OFFICER
 OF  THE INSURER, AND HE OR SHE SHALL BE HELD PERSONALLY RESPONSIBLE WITH
 RESPECT TO THE ACCURACY OF THE DATA. THE DETAILED CLAIM  DATA  SHALL  BE
 SUBMITTED  IN  THE SAME MANNER AS PROVIDED FOR IN SUBSECTION (B) OF THIS
 SECTION.
   (D) THE SUPERINTENDENT SHALL, IN BOTH WRITTEN FORM AND AS PART OF  THE
 DEPARTMENT  WEB  SITE, MAKE SUCH FINANCIAL STATEMENTS AND DETAILED CLAIM
 INFORMATION AVAILABLE TO THE  PUBLIC.  THE  DETAILED  CLAIM  INFORMATION
 SHALL  BE  PROVIDED  IN AGGREGATE FORM FOR ALL INSURERS AND SEPARATED BY
 SPECIFIC INSURER, COMBINED WITHOUT  ANY  IDENTIFICATION  OF  A  SPECIFIC
 CLAIM  TO  A SPECIFIC INSURER.   NONE OF THE PUBLICLY AVAILABLE DETAILED
 CLAIM INFORMATION SHALL IDENTIFY THE INDIVIDUAL  INSURER,  DEFENDANT  OR
 PLAINTIFF,  OR  REPRESENTATIVE  OF  THE SAME, ASSOCIATED WITH THE CLAIM.
 SUCH FINANCIAL STATEMENTS AND DETAILED CLAIM INFORMATION SHALL BE DEEMED
 A PUBLIC DOCUMENT AND NO PERSON SHALL BE REQUIRED TO FILE A REQUEST  FOR
 SUCH FINANCIAL STATEMENTS PURSUANT TO ARTICLE SIX OF THE PUBLIC OFFICERS
 LAW  IN ORDER TO RECEIVE A COPY THEREOF, BUT UPON REQUEST AND PAYMENT OF
 THE FEE FOR COPYING SUCH DOCUMENT, IT SHALL BE PROVIDED FORTHWITH.  WITH
 RESPECT TO THE ELECTRONIC COPY OF SUCH FINANCIAL STATEMENTS AND DETAILED
 CLAIM  INFORMATION,  WHICH  SHALL  BE ACCESSIBLE ON THE DEPARTMENT'S WEB
 SITE, THE DEPARTMENT SHALL HIGHLIGHT THE AVAILABILITY OF  SUCH  INFORMA-
 TION  TO  THE  PUBLIC  ON  SUCH WEB SITE, AND THE LINK TO EACH INSURER'S
 FINANCIAL STATEMENT AND THE AGGREGATED DETAILED CLAIM INFORMATION  SHALL
 BE  ACCESSIBLE IN A SIMPLE AND EASY MANNER. BOTH THE FINANCIAL STATEMENT
 AND AGGREGATED DETAILED CLAIM INFORMATION ON THE DEPARTMENT'S  WEB  SITE
 SHALL  BE  AVAILABLE  IN  SPREADSHEET  FORMAT,  IN ADDITION TO ANY OTHER
 FORMAT THE SUPERINTENDENT DETERMINES IS APPROPRIATE. WHERE SUMMARIES ARE
 INCLUDED, THEY SHALL BE WRITTEN IN PLAIN AND SIMPLE ENGLISH SO THAT  THE
 PUBLIC AT LARGE CAN EASILY COMPREHEND THE DATA PROVIDED.
   (E)  ON  OR  BEFORE  JULY FIRST OF EACH YEAR, THE SUPERINTENDENT SHALL
 ISSUE REPORTS SUMMARIZING AND EXPLAINING THE INFORMATION COLLECTED  FROM
 THE  FINANCIAL  STATEMENTS AND THE DETAILED CLAIM INFORMATION AND SUMMA-
 RIZING THE COST AND  OTHER  ESSENTIAL  ELEMENTS  RELEVANT  TO  PROVIDING
 SECTION  TWO  HUNDRED FORTY OF THE LABOR LAW COVERAGE. SUCH REPORT SHALL
 FURTHER CONTAIN SUCH RECOMMENDATIONS THE SUPERINTENDENT DEEMS  ADVISABLE
 TO ENCOURAGE THE UTILIZATION OF RISK MANAGEMENT PROGRAMS TO BE REGULARLY
 CONDUCTED  BY  CONTRACTORS TO REDUCE PREMIUMS AND PROVIDE WORKERS WITH A
 SAFER WORK ENVIRONMENT, AND ANY OTHER STEPS CONTRACTORS OR REAL PROPERTY
 OWNERS SHOULD UTILIZE IN FURTHERANCE OF THE SAME. THE SUPERINTENDENT MAY
 SEEK, AND SHALL BE ENTITLED TO RECEIVE, THE AID AND  ASSISTANCE  OF  THE
 COMMISSIONER OF LABOR AND ANY OTHER STATE OR LOCAL GOVERNMENTAL OFFICIAL
 CHARGED WITH RESPONSIBILITY FOR WORK SITE SAFETY IN PREPARING SUCH ANAL-
 YSIS  AND RECOMMENDATIONS.  COPIES OF SUCH REPORTS SHALL BE FORWARDED TO
 THE TEMPORARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE  ASSEMBLY  AND

 A. 8949                             5
 
 THE CHAIRS OF THE SENATE AND ASSEMBLY INSURANCE COMMITTEES. SUCH REPORTS
 SHALL BE PUBLIC DOCUMENTS AND SHALL BE ACCESSIBLE BOTH IN PAPER COPY AND
 ON  THE  DEPARTMENT'S  WEB  SITE IN A SIMILAR FASHION AS PROVIDED FOR IN
 SUBSECTION (D) OF THIS SECTION.
   (F)  WHERE  AN  INSURER FAILS OR REFUSES TO PROVIDE THE SUPERINTENDENT
 WITH A FULL AND COMPLETE DISCLOSURE AS REQUIRED  BY  THIS  SECTION,  THE
 SUPERINTENDENT SHALL TAKE SUCH ACTION HE OR SHE DEEMS NECESSARY TO BRING
 THE  INSURER INTO FULL COMPLIANCE. SUCH ACTION MAY INCLUDE IMPOSITION OF
 A CIVIL PENALTY OF UP TO FIFTY THOUSAND  DOLLARS  ASSESSED  AGAINST  THE
 INSURER  FOR  EACH VIOLATION, TEMPORARY SUSPENSION OF ANY RIGHT TO ISSUE
 ADDITIONAL POLICIES OR CONTRACTS UNTIL THE INSURER  BRINGS  ITSELF  INTO
 FULL  COMPLIANCE, AN AUDIT OF THE INSURER'S RECORDS BY THE DEPARTMENT OR
 ITS DESIGNATED REPRESENTATIVE TO OBTAIN THE INFORMATION AND WHICH  AUDIT
 SHALL  BE  PAID FOR BY THE INSURER, OR ANY OTHER CIVIL REMEDY THE SUPER-
 INTENDENT  DEEMS  WARRANTED  OR  NECESSARY  UNTIL  SUCH  INSURER   FULLY
 COMPLIES.  IN  ADDITION  THE  OFFICER WHOSE SIGNATURE IS AFFIXED TO SUCH
 STATEMENT MAY BE PERSONALLY PENALIZED TO THE SAME EXTENT.
   (G) THE SUPERINTENDENT MAY PROMULGATE SUCH RULES AND REGULATIONS HE OR
 SHE DEEMS NECESSARY FOR THE PROPER ADMINISTRATION OF THE  PROVISIONS  OF
 THIS  SECTION,  AND  SUCH RULES AND REGULATIONS MAY BE PROMULGATED ON AN
 EMERGENCY BASIS IF THE SUPERINTENDENT WARRANTS SUCH ACTION TO BE  NECES-
 SARY.
   § 4. Severability. If any item, clause, sentence, subparagraph, subdi-
 vision  or  other  part  of  this act, or the application thereof to any
 person or circumstances shall be held to be invalid, such holding  shall
 not  affect, impair or invalidate the remainder of this act but it shall
 be confined in its operation to the  item,  clause,  sentence,  subpara-
 graph,  subdivision  or other part of this act directly involved in such
 holding, or to the person and circumstances therein involved.
   § 5. This act shall take effect on the first of January next  succeed-
 ing the date upon which it shall have become a law.