N.Y. Comp. Codes R. & Regs. tit. 11 § 27.0

Current through Register Vol. 46, No. 43, October 23, 2024

Section 27.0 - Preamble

(a) The Insurance Law prohibits the sale in New York of insurance (other than ocean marine insurance and such other insurance specified in section 2117 (b) and (c) of the Insurance Law) when written by insurers not authorized in New York, unless:

(1) the contract of insurance provides insurance coverage only of the kinds specified in paragraphs 4 through 14, 16, 17, 19, 20, 22, 27, 28, 31, 32, or 33 of section 1113 (a) of the Insurance Law;

(2) the coverage is unobtainable in whole or in part from authorized insurers, including, where appropriate, residual market facilities authorized to write and writing the kinds of insurance provided, except as set forth in section 2118 (b)(3)(F) of the Insurance Law; and

(3) the coverage is procured from one or more unauthorized insurers by a licensed excess line broker, provided that the broker exercises due care and makes a diligent effort as required by section 2118 of the Insurance Law, except as set forth in section 2118 (b)(3)(F) of the Insurance Law.

(b) On July 21, 2010, President Obama signed into law the Nonadmitted and Reinsurance Reform Act of 2010 (NRAA), which prohibits any state, other than the insured's home state, from requiring a premium tax payment for nonadmitted insurance. The NRRA also subjects the placement of nonadmitted insurance solely to the statutory and regulatory requirements of the insured's home state, and provides that only an insured's home state may require an excess line broker to be licensed to sell, solicit, or negotiate nonadmitted insurance with respect to such insured. On March 31, 2011, Governor Andrew M. Cuomo signed into law chapter 61 of the Laws of 2011, part I of which amended the New York Insurance Law to conform to the NRRA.

(c) This Part establishes procedures deemed essential in the exercise of due care and the making of a diligent effort as required by the Insurance Law and in accordance with the NRRA, when the insured's home state is this State.

(d) In the absence of satisfactory explanation, failure by an excess line broker to comply with the requirements of this Part when the insured's home state is this State may be considered as evidence of:

(1) conduct detrimental to the interests of the people of this State within the meaning of section 2118 of the Insurance Law; and

(2) incompetency or untrustworthiness within the meaning of section 2110 (a) of the Insurance Law.

(e) When the insured's home state is this State, an excess line broker shall not place coverage with any unauthorized insurer except in conformity with this Part or as otherwise permitted by the Insurance Law.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 27.0

Amended, New York State Register October 8, 2014/Volume XXXVI, Issue 40, eff. 10/8/2014

Amended New York State Register July 12, 2023/Volume XLV, Issue 28, eff. 7/12/2023