NY State Senate Bill 2017-S422

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to insurance
Jan 04, 2017	referred to insurance

co-Sponsors

2017-S422 (ACTIVE) - Details

See Assembly Version of this Bill:: A29
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §2118, Ins L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S7339, A10579
2019-2020: S1603, A157
2021-2022: S714, A996
2023-2024: S2796, A4597

2017-S422 (ACTIVE) - Summary

Relates to medical malpractice excess line insurance.

2017-S422 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S422

 TITLE OF BILL :

An act to amend the insurance law, in relation to excess line coverage
for certain medical malpractice insurance

 PURPOSE :

To repeal the requirement that excess line brokers must obtain a
declination from the medical malpractice insurance pool before the
broker can place primary malpractice insurance in the excess line
market

 SUMMARY OF PROVISIONS :

Section 1 amends subsection (e) of section 2118 of the insurance law.

Section 2 is the effective date.

 JUSTIFICATION :

New York State continues to suffer in numerous ways from a
malfunctioning medical malpractice insurance marketplace that many
describe as a crisis. There are only four insurers which assume a
significant volume of medical malpractice business, insuring over 80%

of the entire New York market. Threeof those insurers support the
fourth insurer financially by bearing a portion of the losses which
exceed premium. That fourth market is the residual market, Medical
Malpractice Insurance Pool ("MMIP"). MMIP exists to underwrite all
medical malpractice risks rejected by licensed insurers. MMIP insures
physicians and hospitals which cannot obtain insurance from other
licensed insurers in New York willing to write medical malpractice
risks.

New York Law (§ 2118(e) (2) (A) (ii)) currently requires excess line
brokers to obtain a declination from the MMIP before the broker can
place primary malpractice insurance in the excess line market. As a
practical matter, MMIP will not decline such risks except in the
rarest of circumstances, which, by and large, bars the excess line
market from this line of business in New York. This bill would repeal
the requirement for the excess line brokers to obtain a declination
from the MMIP. Repealing the MMIP declination requirement will provide
doctors, dentists and general hospitals a broader array of choices,
products, terms and conditions to suit a professional's particular
insurance needs. While all insurers, including MMIP, will be permitted
to continue to make available their malpractice insurance products,
the addition of excess line insurers will allow insureds greater
choice in the selection of insurance policies which best suit their
needs from a number of additional, highly rated insurers.

While excess line brokers will continue to be required to diligently
search the licensed market before placing coverage with an excess line
insurer, the insured professional will be permitted to accept an offer
of coverage from an excess line insurer when the policy terms and
conditions are superior to those offered by MMIP. This legislation
will bolster the marketplace and treat the medical malpractice
residual market MMIP, in a manner consistent with the New York
Property Insurance Association and the Assigned Risk Plan. As a
result, these changes will provide medical professionals with more
secure coverage options, while also benefiting consumers who need
protection and support should an unfortunate medical event occur.

 LEGISLATIVE HISTORY :

S.7339 of 2016.
 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
Immediately.

2017-S422 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    422
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2017
                                ___________
 
 Introduced  by  Sen.  SEWARD -- 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 excess  line  coverage
   for certain medical malpractice insurance

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subsection (e) of section 2118 of  the  insurance  law,  as
 added  by chapter 684 of the laws of 1993, subparagraph (A) of paragraph
 2 as amended by chapter 587 of the laws of  2002,  subparagraph  (C)  of
 paragraph 2 as amended by chapter 498 of the laws of 1996, is amended to
 read as follows:
   (e)(1)  Except  as  provided  in  paragraph two of this subsection, no
 licensee shall be required to obtain a declination from  an  association
 established  pursuant  to article fifty-four or fifty-five of this chap-
 ter, or to apply for insurance through a plan  established  pursuant  to
 article  fifty-three of this chapter, as a condition of procuring insur-
 ance pursuant to this section.
   (2) (A) Unless the licensee obtains a declination from the appropriate
 association, or from an insurer pursuant to an application for  coverage
 through a plan, no diligent effort shall be considered to have been made
 if the insurance is available from the plan or association in connection
 with the placement of:
   (i) a policy of non-commercial motor vehicle liability insurance; OR
   (ii) [medical malpractice insurance for a general hospital, as defined
 in  subdivision  ten  of  section  two thousand eight hundred one of the
 public health law, a physician or dentist; or
   (iii)] insurance which by law must be provided by an authorized insur-
 er.
   (B) In connection with the placement of any other kind of insurance, a
 declination from the appropriate association, or from an insurer  pursu-

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD01681-01-7

 S. 422                              2
 
 ant  to  an  application  for coverage through a plan, shall be required
 unless prior to the placement the insured has been advised of the avail-
 ability of insurance from the plan or association.
   (C)  The  affirming broker shall provide written notice to the insured
 that the placement was made with an unauthorized insurer. A copy of this
 notice shall be attached to the affirming broker's affidavit. The  affi-
 davits  required by this section to be completed by the affirming broker
 shall include a statement that the affirming broker advised the  insured
 in writing:
   (i)  that  the  unauthorized  insurer with which the coverage is being
 placed is not authorized to do an insurance business in this  state  and
 is not subject to supervision by this state;
   (ii)  that in the event of the insolvency of the unauthorized insurer,
 losses will not be covered by any New York state insolvency fund;
   (iii) that the policy may not be subject to all of the regulations  of
 the superintendent pertaining to policy forms; and
   (iv)  such other information as the superintendent may, by regulation,
 require.
   § 2. This act shall take effect immediately.

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Senate Bill S422

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

co-Sponsors

2017-S422 (ACTIVE) - Details

2017-S422 (ACTIVE) - Summary

2017-S422 (ACTIVE) - Sponsor Memo

2017-S422 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S422

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Sponsored By

James L. Seward

Archive: Last Bill Status - In Senate Committee Insurance Committee

co-Sponsors

Martin J. Golden

2017-S422 (ACTIVE) - Details

2017-S422 (ACTIVE) - Summary

2017-S422 (ACTIVE) - Sponsor Memo

2017-S422 (ACTIVE) - Bill Text download pdf

Comments