N.Y. Insurance Law § 5412: Additional powers of the association

* § 5412. Additional powers of the association. (a) As used in this

article:

(1) "Commercial risk insurance", "public entity insurance" and

"professional liability insurance" have the meanings ascribed to them by

section one hundred seven of this chapter, except that motor vehicle

insurance and medical malpractice liability insurance are excluded from

such meanings for purposes of this article;

(2) "Market" means a line, subline or classification (other than a

classification delineated by geographic location) of property/casualty

insurance not subject to subsection (b) of section two thousand three

hundred five, section two thousand three hundred twenty-eight or section

three thousand four hundred twenty-five of this chapter. Provided,

however, a "market" shall also include homeowners insurance as defined

in subsection (h) of section five thousand four hundred one of this

article. A "market" shall also include mandatory minimum surety bonds

required pursuant to section two hundred fifty-eight-b of the

agriculture and markets law.

(b) The association shall begin, or resume after any suspension, its

insurance underwriting operations for any market only after the

superintendent has determined after a hearing on a record that it is

necessary, due to unavailability of meaningful coverage in a particular

voluntary market, to activate the association to write coverage for such

market. In making a determination of necessity pursuant to this

subsection, the superintendent may consider such factors as: the extent

and nature of competition; size and significance of the coverage;

availability of adequate limits of coverage; efficacy of any market

assistance program administered by the superintendent including but not

limited to actual placement of coverage through a voluntary market

assistance program at the time such determination is to be made;

reinsurance availability; extent of consumer complaints to the

department of financial services; extent of denials and restrictions of

coverage; volume of cancellations and nonrenewals; or changing

conditions in the economic, judicial and social environment. If, after

activating the association in regard to a particular market, the

superintendent determines that ready availability of meaningful coverage

in such voluntary market has been restored, the association shall

thereupon suspend its underwriting in regard to such market. The

superintendent shall, no later than October first, nineteen hundred

eighty-six, activate the association to write particular markets in

regard to public entities, unless the superintendent determines that

activation is unnecessary because public entities are able to secure

meaningful coverage in voluntary markets, including through any market

assistance program administered by the superintendent.

(c) The directors of the association, after consultation with the

superintendent, shall forthwith prepare a plan of operation, subject to

approval by the superintendent who shall act expeditiously thereon, and

the directors shall take all other necessary steps on and after the

effective date of this section to prepare for prompt implementation of

the association's powers in the event that any market is activated by

the superintendent pursuant to subsection (b) of this section. The

directors of the association may, on their own initiative or at the

request of the superintendent, amend the plan subject to approval by the

superintendent. The superintendent may direct that the plan of

operation, or amendments to such plan, shall include specified limits of

coverage for particular markets activated.

(d) Upon activation by the superintendent of any market pursuant to

subsection (b) of this section, all insurers (excluding assessment

cooperative fire insurers) authorized to write and engaged in writing on

a direct basis within this state commercial risk, public entity or

professional liability insurance, including commercial multiple peril

policies, shall participate as members in the association. Every such

insurer shall be and remain a member of the association as a condition

of its authority to continue to transact such insurance in this state.

In addition to the credit provided pursuant to subsection (f) of section

five thousand four hundred five of this article, the superintendent may

by regulation provide for additional credits to such insurers that

voluntarily provide a market for those risks that the superintendent

determines to be extremely difficult to place in the voluntary market.

(e) The association shall with respect to any market activated by the

superintendent pursuant to subsection (b) of this section issue policies

in accordance with the association's plan of operation, and shall

maintain separate accounts and records for premiums, losses, expenses

and investment income attributable to such insurance. Assessments of

insurers for expenses and any losses of the association in connection

with such insurance shall be based on an insurer's net direct premiums

attributable to the types of insurance specified in subsection (a) of

this section. Rates shall be based upon loss and expense experience of

the risks insured by the association pursuant to this section and shall

be on an actuarially sound basis, calculated to be self-supporting at

the lowest possible rates consistent with the maintenance of solvency of

the association and of reasonable reserves, surplus and expenses,

including commissions. The provisions of subsection (d) of section five

thousand four hundred five of this article shall not apply to insurance

written pursuant to this section.

(f) The superintendent may also activate the association for purposes

of providing excess or umbrella coverages in connection with a market.

Hazards that the superintendent determines are uninsurable shall be

excluded from coverages which the association is required to furnish.

(g) The provisions of this section shall cease to be of any force or

effect on or after June thirtieth, two thousand twenty-nine, except that

policies issued or other obligations incurred by the association shall

not be impaired by the expiration of this section and the association

shall continue for the purpose of servicing such policies and performing

such obligations.

* NB Expires June 30, 2029