N.Y. Insurance Law § 2329: Motor vehicle insurance rates; excess profits

§ 2329. Motor vehicle insurance rates; excess profits. (a) Each

insurer issuing policies that are subject to article fifty-one of this

chapter, including policies of motor vehicle personal injury liability

insurance or policies of motor vehicle property damage liability

insurance or insurance for loss or damage to a motor vehicle, shall

establish a fair, practicable, and nondiscriminatory plan for crediting

to those purchasing such policies their share of the insurer's excess

profit, if any, on such policies. An excess profit shall be an

underwriting gain for the three most recent calendar years combined

which is greater than the anticipated underwriting profit plus five

percent of earned premiums for those calendar years. Each plan shall

apply to policy periods for the periods January first, nineteen hundred

seventy-four through August second, two thousand one, and the effective

date of the property/casualty insurance availability act through June

thirtieth, two thousand twenty-nine. The superintendent may, through

duly promulgated regulations, waive any requirement for credit that the

superintendent determines to be de minimis or impracticable, adopt forms

of returns that shall be made to the superintendent in order to

establish the amount of any credit due, establish periods and times for

the determination and distribution of credits, and shall provide that

insurers receive appropriate credit against any credits required by any

such plan for policyholder dividends and for return premiums that may be

due under rate credit or retrospective rating plans based on experience.

(b) If an insurer subject to this section distributes a credit

pursuant to this section due to the reforms enacted in the state fiscal

year two thousand twenty-six--two thousand twenty-seven budget, the

insurer shall provide notice to policyholders of this credit and

indicate that the credit was due to the reforms enacted in the state

fiscal year two thousand twenty-six--two thousand twenty-seven budget.

This notification shall be made at the time the credit is distributed.

(c) As used herein with respect to any three-year period, "anticipated

underwriting profit" means the sum of the dollar amounts obtained by

multiplying, for each rate filing of the insurer in effect during such

period, the earned premiums applicable to such rate filing during such

period by the percentage factor included in such rate filing for profit

and contingencies. Separate calculations need not be made for

consecutive rate filings containing the same percentage factor for

profits and contingencies. Underwriting gain or loss for each calendar

year shall be computed as follows: the sum of the incurred losses and

loss adjustment expenses as of March thirty-first of the following year,

developed to an ultimate basis, plus the administrative and selling

expenses incurred in the calendar year, plus policyholder dividends

applicable to the calendar year, will be subtracted from the calendar

year earned premium to determine the underwriting gain or loss.

(d) On or before March thirty-first of each year, an insurer subject

to this section shall submit a report to the superintendent, in a format

specified by the superintendent, demonstrating whether the insurer

realized an excess profit for the three most recent calendar years

combined. Such report shall include all relevant information required to

calculate underwriting gain and loss and determine whether an excess

profit threshold has been realized. If an insurer realized an excess

profit, then the insurer shall notify the superintendent when the

insurer has completed making any credits required by this section. If an

insurer has realized an excess profit, the superintendent shall provide

notice to the speaker of the assembly, the temporary president of the

senate, the chair of the assembly insurance committee, the chair of the

senate insurance committee, and the governor.

(e)(1) Each insurer subject to this section shall, by July first, two

thousand twenty-seven, and annually thereafter, submit a report to the

superintendent that:

(A) identifies and quantifies, in a manner prescribed by the

superintendent, the estimated impact on losses, expenses, and premiums

resulting from statutory or regulatory reforms enacted in or the result

of the state fiscal year two thousand twenty-six--two thousand

twenty-seven budget; and

(B) reflects such estimated impact in the insurer's proposed rates,

rating plans, and rating rules.

(2) In reviewing any rate filing submitted after enactment of the

state fiscal year two thousand twenty-six--two thousand twenty-seven

budget, the superintendent shall consider the estimated impact of the

reforms described in paragraph one of this subsection and shall not

approve any rate that, after such consideration, fails to meet the

standards set forth in section twenty-three hundred three of this

article.

(3) On or before December thirty-first, two thousand twenty-nine, the

superintendent shall submit a report to the governor, the temporary

president of the senate, the speaker of the assembly, the chair of the

assembly insurance committee, and the chair of the senate insurance

committee that:

(A) summarizes the estimated aggregate impact of the reforms described

in paragraph one of this subsection on insurer losses, expenses, and

premiums; and

(B) evaluates the extent to which such savings have been reflected in

approved rates and realized by policyholders.

(4) The superintendent may promulgate regulations or guidance

necessary to implement the provisions of this subsection.