S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5253
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               March 7, 2023
                                ___________
 
 Introduced by M. of A. HUNTER -- read once and referred to the Committee
   on Insurance
 
 AN ACT to amend the insurance law, in relation to permitting a waiver of
   the  diligent  effort requirement in limited circumstances for certain
   insurance coverage to be placed by licensed excess line  brokers  with
   unauthorized insurers

   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) OF THIS PARAGRAPH 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 coverage 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 the  type  of  coverage  or  class  of  insurance
 involved.  The  licensee  and the affirming broker shall be excused from
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05708-01-3
              

 A. 5253                             2
 
 affirming that a diligent effort was made if the  superintendent  deter-
 mines,  pursuant  to paragraph four of this subsection, that no declina-
 tions are  required.  NOTWITHSTANDING  ANY  PROVISION  TO  THE  CONTRARY
 CONTAINED  IN    THIS  CHAPTER,   WHERE   A RETAIL   PRODUCING INSURANCE
 BROKER  SEEKS  TO PROCURE  OR PLACE COMMERCIAL LINES INSURANCE   THROUGH
 AN    UNAFFILIATED WHOLESALE  EXCESS  LINE  INSURANCE BROKER,  BOTH  THE
 RETAIL PRODUCING INSURANCE BROKER AND THE WHOLESALE EXCESS  LINE  INSUR-
 ANCE  BROKER  SHALL BE EXCUSED FROM MAKING ANY DILIGENT EFFORT OTHERWISE
 REQUIRED BY THIS ARTICLE.
   § 2. Section 2118 of the insurance law is  amended  by  adding  a  new
 subsection (g) to read as follows:
   (G) (1) AS USED IN THIS SECTION:
   (A)  "RETAIL  PRODUCING  INSURANCE  BROKER"  MEANS AN INSURANCE BROKER
 LICENSEE WHO DIRECTLY DEALS WITH AN INSURED;
   (B) "WHOLESALE EXCESS LINE INSURANCE BROKER" MEANS THE LICENSED EXCESS
 LINE INSURANCE BROKER FROM WHOM OR THROUGH  WHOM  THE  RETAIL  INSURANCE
 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  PRODUCING INSURANCE BROKER AND A WHOLESALE EXCESS LINE
 INSURANCE BROKER ARE UNAFFILIATED IF SUCH BROKER DOES  NOT  CONTROL,  IS
 NOT  CONTROLLED  BY,  OR  IS  NOT UNDER COMMON CONTROL WITH THE OTHER. A
 RETAIL PRODUCING INSURANCE BROKER OR A WHOLESALE EXCESS  LINE  INSURANCE
 BROKER  HAS  CONTROL OVER THE OTHER IF THE BROKER: (A) DIRECTLY OR INDI-
 RECTLY 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 (B) CONTROLS IN ANY MANNER THE ELECTION OF A
 MAJORITY OF THE DIRECTORS OR TRUSTEES OF THE OTHER.
   §  3.  This act shall take effect immediately, provided, however, that
 the amendments to subparagraph (A) of paragraph 3 of subsection  (b)  of
 section  2118 of the insurance law made by section one of this act shall
 not affect the expiration of such subsection  and  shall  be  deemed  to
 expire therewith.