S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    498
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sens. BRESLIN, BROOKS -- 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  permitting  certain
   insurance  coverage  to  be placed by licensed excess line broker with
   unauthorized insurers without regard to the diligent  effort  require-
   ment  and  simplifying  the  excess line insurance placement affidavit
   requirements
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subparagraph  (A)  of  paragraph  3  of subsection (b) of
 section 2118 of the insurance law, as amended by section 12 of part I of
 chapter 61 of the laws of 2011, is amended to read as follows:
   (A) Except as provided in subparagraph (F) AND SUBJECT TO SUBPARAGRAPH
 (C) of this paragraph, submission of insurance documents to  the  excess
 line  association shall be accompanied by a statement subscribed to, and
 affirmed by, the licensee or sublicensee as true under the penalties  of
 perjury  that,  after  diligent  effort,  the  full  amount of insurance
 required could not be procured, from authorized insurers, each of  which
 is  authorized  to  write  insurance of the kind requested and which the
 licensee has reason to believe might consider writing the type of cover-
 age or class of insurance involved, and further showing that the  amount
 of  insurance  procured  from an unauthorized insurer is only the excess
 over the amount procurable from an  authorized  insurer.  The  licensee,
 however,  shall  be  excused  from  affirming that a diligent effort, as
 defined above, was made to procure the coverage from authorized insurers
 if the licensee's affidavit is accompanied by the affidavit  of  another
 broker  involved  in the placement affirming as true under the penalties
 of perjury that, after diligent effort  by  the  affirming  broker,  the
 required  insurance  could  not  be  procured from an authorized insurer
 which the affirming broker had reason to believe might consider  writing
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD03856-01-1

 S. 498                              2
 
 the  type  of  coverage or class of insurance involved. The licensee and
 the affirming broker shall be excused from  affirming  that  a  diligent
 effort  was made if the superintendent determines, pursuant to paragraph
 four  of  this  subsection,  that no declinations are required. NOTWITH-
 STANDING ANYTHING TO THE CONTRARY CONTAINED IN  THIS  CHAPTER,  WHERE  A
 RETAIL  INSURANCE  BROKER  SEEKS  TO  PROCURE  OR PLACE COMMERCIAL LINES
 INSURANCE  THROUGH  AN  UNAFFILIATED  WHOLESALE  EXCESS  LINE  INSURANCE
 BROKER,  BOTH  THE RETAIL INSURANCE BROKER AND THE WHOLESALE EXCESS LINE
 INSURANCE BROKER SHALL BE EXCUSED FROM MAKING ANY DILIGENT EFFORT OTHER-
 WISE REQUIRED BY THIS ARTICLE.
   § 2. Subparagraph (C) of paragraph 3 of subsection (b) of section 2118
 of the insurance law, as amended by chapter 684 of the laws of 1993,  is
 amended to read as follows:
   (C) Every licensee, or affirming broker, in connection with the place-
 ment of each risk pursuant to this section NOT OTHERWISE EXEMPT FROM THE
 DILIGENT  EFFORT  REQUIREMENT,  shall  record  on the affidavit required
 pursuant to subparagraph (A) of this paragraph  the  NAME  AND  NATIONAL
 ASSOCIATION  OF  INSURANCE  COMMISSIONERS (NAIC) CODE OF EACH AUTHORIZED
 INSURER DECLINING A RISK AND information relied  upon  that  formed  the
 basis  of  such  licensee's or affirming broker's reason to believe that
 the authorized insurer might consider writing the type  of  coverage  or
 class  of insurance involved.  NO ADDITIONAL DILIGENT EFFORT INFORMATION
 SHALL BE REPORTED ON THE AFFIDAVIT.
   § 3. Section 2118 of the insurance law is  amended  by  adding  a  new
 subsection (g) to read as follows:
   (G) (1) FOR THE PURPOSES OF THIS SECTION:
   (A) A "RETAIL INSURANCE BROKER" MEANS AN INSURANCE BROKER LICENSEE WHO
 DIRECTLY DEALS WITH AN INSURED;
   (B)  A  "WHOLESALE  EXCESS  LINE  INSURANCE BROKER" MEANS THE LICENSED
 EXCESS LINE INSURANCE BROKER FROM WHOM OR THROUGH WHOM THE RETAIL INSUR-
 ANCE BROKER HAS PROCURED EXCESS LINE COVERAGE ON BEHALF OF THE  INSURED;
 AND
   (C)  "COMMERCIAL  LINES  INSURANCE"  MEANS ANY POLICY OF INSURANCE NOT
 DEFINED AS A "COVERED POLICY" IN SUBSECTION (A) OF SECTION  THREE  THOU-
 SAND FOUR HUNDRED TWENTY-FIVE OF THIS CHAPTER.
   (2)  A  RETAIL  INSURANCE BROKER AND A WHOLESALE EXCESS LINE INSURANCE
 BROKE ARE UNAFFILIATED IF ONE DOES NOT CONTROL, IS NOT CONTROLLED BY, OR
 IS NOT UNDER COMMON CONTROL WITH THE OTHER. ONE  HAS  CONTROL  OVER  THE
 OTHER IF THE BROKER DIRECTLY OR INDIRECTLY OR ACTING THROUGH ONE OR MORE
 OTHER  PERSONS  OWNS,  CONTROLS,  OR  HAS  THE POWER TO VOTE TWENTY-FIVE
 PERCENT OR MORE OF ANY CLASS OF  VOTING  SECURITIES  OF  THE  OTHER;  OR
 CONTROLS  IN  ANY  MANNER THE ELECTION OF A MAJORITY OF THE DIRECTORS OR
 TRUSTEES OF THE OTHER.
   § 4. This act shall take effect immediately, provided,  however,  that
 the amendments to subparagraphs (A) and (C) of paragraph 3 of subsection
 (b) of section 2118 of the insurance law made by sections one and two of
 this act shall not affect the expiration of such subsection and shall be
 deemed to expire therewith.