N.Y. Insurance Law § 2321: Enforcement and penalties; where prior approval is required

§ 2321. Enforcement and penalties; where prior approval is required.

(a) Rate service organizations shall be subject to examination by the

superintendent, as often as he may deem it expedient, pursuant to the

provisions of this chapter applicable to the examination of insurers.

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

shall be examined at least once in every five years.

(b) (1) If the superintendent finds that any rate filing theretofore

filed does not comply with the provisions of this article or that such

filing provides rates or rules which are inadequate, excessive, unfairly

discriminatory, destructive of competition, detrimental to the solvency

of the insurer, or otherwise unreasonable, the superintendent may order

the filing withdrawn and the rate suspended prospectively upon fifteen

days prior written notice to the rate service organization or to the

insurer which filed them, provided, however, such rate service

organization or insurer may request a hearing, in which case no

withdrawal or suspension shall become effective pending the close of the

hearing, which shall be held within fifteen days of the request. Within

fifteen days after the close of the hearing, the superintendent shall

determine an adjusted rate based upon the hearing record deemed to be in

compliance with the standards set forth in this article, and the rate so

determined shall apply prospectively for a period not to exceed one

year.

(2) At any such hearing, the insurer or rate service organization

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) Whenever the superintendent finds, after notice and a hearing,

that unfair discrimination exists in the making or in the application of

rates made or used by any rate service organization or by any authorized

insurer, he may order that the rate service organization or the insurer

remove the discrimination; but the same shall not be removed by

increasing the rate on any risk affected by the order unless the rate is

approved by the superintendent as reasonable. Before making such order,

the superintendent shall give notice to the rate service organization,

if any, which made such rate, and to all insurers and other persons

which he may deem directly affected thereby. Every rate service

organization receiving any such notice shall promptly notify all its

members or subscribers who would be affected by the order, and notice to

such rate service organization shall be deemed notice to its members or

subscribers.

(d) Proceedings pursuant to subsections (b) and (c) hereof may be

instituted upon the initiative of the superintendent or upon written

application to the superintendent by any aggrieved person or

organization, other than a rate service organization, for a hearing, if

the superintendent finds that the application is made in good faith and

that the grounds otherwise justify holding such a hearing.

(e) Any person, association, corporation or rate service organization

wilfully violating the applicable provisions of this article shall, in

addition to any other penalty provided by law, be liable to the people

of this state for a penalty in an amount not less than twenty-five

dollars nor more than one thousand dollars for each offense. If the

superintendent finds after notice and hearing, that any authorized

insurer, licensed agent or licensed insurance broker has wilfully

violated any of the provisions of this article, he may, in lieu of any

other penalty provided by law, order the insurer, agent or broker, as

the case may be, to pay to the people of this state a penalty in the sum

of one hundred dollars, for each offense, and the failure of any such

person to pay the penalty within thirty days after the making of the

order, unless the order is suspended by a court of competent

jurisdiction, shall constitute a violation of the provisions of this

chapter. Within the meaning of this subsection, the issuance,

procurement or negotiation of each policy of insurance, by an insurer,

agent or broker, as the case may be, in willful violation of the

provisions of this article shall be deemed a separate offense.

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

insurance activities the rates for which are subject to prior approval

and which are subject to this article.