BILL NUMBER: S3572

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to permitting insurers to
make available multiple rating programs for commercial insurance within
the same company

 
PURPOSE:

To permit property/casualty insurers to make available multiple rating
programs within the same company for commercial lines insurance in the
voluntary market.

 
SUMMARY OF PROVISIONS:

Section 1: Amends Insurance Law Section 2352 to permit insurers to make
available multiple rating programs within the same company for commer-
cial lines insurance in the voluntary market.

              

 
EXISTING LAW:

Section 2352 of the insurance law currently permits multiple rating
plans for personal lines insurance.

 
JUSTIFICATION:

In 2011, legislation was enacted to authorize insurers to make available
multiple rating programs within the same company for personal lines
insurance. Prior to the enactment of this law, if an insurance company
wished to have more than one rating plan for personal lines insurance,
they would be required to establish a separate subsidiary or affiliate
company for the primary purpose of offering a new rating plan. Obvious-
ly, this was a cumbersome and expensive process which added unnecessary
costs to personal lines insurance. Accordingly, legislation was enacted
to authorize multiple rating plans for personal lines insurance and
remove these unnecessary burdens and costs associated with offering
multiple rating plans for personal lines insurance.

The same rationale applies for commercial lines policies and this legis-
lation would similarly allow insurers to make available multiple rating
plans for commercial lines without having to form a subsidiary or affil-
iate company. To remain competitive, insurance companies, both commer-
cial and personal lines companies, need to be able to continually devel-
op new rating plans that introduce different rating elements that allow
them to better segment and price business. This bill allows insurers on
the commercial lines side to adopt these innovations in the most effi-
cient and cost effective way possible by authorizing the establishment
of an additional rating plan within the same insurance company.

It should be noted that, as is currently the case for personal lines
policies, each time a company develops a new rating plan, the plan would
be subject to the prior approval of the Superintendent of Financial
Services and would be provided only to new business customers.

 
LEGISLATIVE HISTORY:

S5735 of 2019-20
S.1057 of 2016-18

S.2891 of 2013-14;

S.6454 of 2012

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.