N.Y. Insurance Law § 2320: Enforcement and penalties; where prior approval is not required

* § 2320. Enforcement and penalties; where prior approval is not

required. (a) The superintendent may as often as he deems it expedient

examine any insurer or rate service organization to ascertain whether

its rating and underwriting practices are in accordance with law. Rate

service organizations which make or file rates, whether or not advisory,

shall be examined at least once in every five years pursuant to the

provisions of this chapter applicable to the examination of insurers.

Filed reports on examinations shall be available for public inspection

at the department.

(b) (1) If the superintendent determines after a hearing that any rate

used by an insurer does not comply with the applicable provisions of

this article, he shall order that the rate be disapproved, and the order

may include provision for premium adjustment. The order may also require

that, for such period of time as the superintendent may determine,

subsequent rate filings of the insurer subject to subsection (a) of

section two thousand three hundred five of this article shall not become

effective unless the filings are made in accordance with the provisions

of subsection (b) of such section.

(2) The superintendent may, upon fifteen days prior written notice:

(A) order the suspension, prospectively, of a rate used by an insurer

and reimpose the last previous rate in effect; or

(B) order the suspension, prospectively, of a rate used by an insurer

and determine an adjusted rate that complies with the standards set

forth in this article.

In any such event, the insurer may within that same fifteen day period

make a written request for a hearing, in which event the superintendent

may establish an interim rate by reimposing the last previous rate in

effect or determining an adjusted rate pursuant to subparagraphs (A) and

(B), respectively, of this paragraph. This interim rate shall remain

effective pending the close of the hearing, which shall be held within

fifteen days of the insurer's request. Within fifteen days after the

close of the hearing, the superintendent shall determine the rate that

complies with the standards set forth in this article based upon the

hearing record, and the rate so determined shall apply prospectively for

a period not to exceed one year.

(3) At any such hearing, the insurer shall have the burden of

justifying the rate in question. All such determinations of the

superintendent shall be on the basis of findings of fact and

conclusions. Nothing in this subsection shall preclude the

superintendent from determining that the last previous rate in effect or

the rate filed by the insurer or rate service organization complies with

the standards set forth in this article. Nothing in this subsection

shall preclude the insurer or a rate service organization from making or

modifying any rate filing at any time.

(c) If the superintendent, after notice and hearing, finds that any

insurer, rate service organization or other person has violated the

applicable provisions of this article, he shall order the payment of a

penalty. The issuance, procurement or negotiation of a single policy of

insurance shall be deemed a separate offense. A penalty not to exceed

one thousand dollars may be imposed for each such offense. A further

penalty not to exceed two thousand five hundred dollars may be imposed

for each offense in which the superintendent finds that there was a

knowing violation, provided that a minumum penalty of at least

twenty-five thousand dollars shall be imposed regardless of the number

of such knowing offenses.

(d) This section shall be applicable to kinds of insurance or

insurance activities the rates for which are not subject to prior

approval and which are subject to this article.

* NB Expires July 1, 2026