A bill that would exempt agents from the diligent-effort requirement in certain circumstances passed the New York state Senate on Monday, with a 62-0 vote.
The legislation (S.8128), which is sponsored by Sen. Neil D. Breslin, D-44, would eliminate the excess-lines insurance diligent-effort requirement for commercial-risk placements made by retail producers through unaffiliated wholesale brokers. The exemption would apply to retail agents and wholesale brokers.
Prioritizing excess-lines reform
Excess-lines reform is a key legislative priority for PIANY during the 2021-22 legislative sessions. This legislation, as well as related reform legislation that passed the Senate last week, would help modernize the excess-lines placement process. The current requirements for placing business in the excess lines marketplace are overly stringent, requiring the filing of unnecessary and time-consuming paperwork.
To place business in the excess-lines market, a producer must file declination information, which includes 21 different elements in total for three separate declinations. New York is one of only 10 states that requires any declination information to be filed, and the only state that requires 21 different elements be included. The draconian placement rules for the excess-lines market can lead to unnecessary delayed transactions, which are to the consumer’s detriment. S.8128 would remove an artificial barrier that can prevent consumers from obtaining the necessary coverage for their risks.
Bradford J. Lachut, Esq.
Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.