Last week, the New York State Assembly gave the final approval to a bill, S.B. 5811 and A.B. 8464, that would exempt large commercial insurance policies from certain rate and form approval requirements.
The new law would create a Class 3 in the New York Free Trade Zone to include policyholders whose commercial lines policies generate between $25,000 and $100,000 in premium annually and who meet other specified criteria. These policyholders would be eligible for exemption from rate and form approval requirements. Large commercial insurers that employ and retain special risk managers to assist in the negotiation and purchase of a policy are also exempt under certain circumstances.
According to press reports, supporters think the new law will provide a more efficient regulatory scheme and give insurers the flexibility to offer large commercial policyholders insurance policies that are tailored to meet their specialized needs. They note that state regulators will be able to shift their focus from large businesses with special risk managers who are experienced in the negotiation and purchase of large commercial policies to areas that need their attention.
The bill is awaiting Governor Andrew Cuomo’s signature and will take effect 90 days after his signature.