S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5896
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 22, 2023
                                ___________
 
 Introduced  by  Sen. BRESLIN -- 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 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
              

 S. 5896                             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.