Two of PIANY’s top legislative priorities for the 2023 legislative session successfully were reported out of the Senate Insurance Committee today:
S.5889 would make important reforms to the New York state’s outdated photo inspection law. This issue has been PIANY’s top legislative priority for years.
The bill would allow insurance companies to opt-out of the photo inspection requirement by filing a notice of waiver with the New York State Department of Financial Services.
Similar legislation (A.4668) passed the state Assembly last month.
Learn more about photo inspection reform here.
E&S diligent-effort requirement
S.5896 would exempt commercial insurance policies placed by retail insurance brokers through the unaffiliated wholesale excess-line brokers from the diligent-effort requirement when placing business in the excess & surplus marketplace.
Last year, PIANY was successful in getting Chapter 833 of the Laws of 2022 passed, which streamlined the process of placing commercial insurance policies in the excess-line market and simplified and reduced the excess-line insurance placement affidavit requirements. Historically, before placing business in the E&S marketplace, a retail broker must receive three declinations from admitted lines carriers. S.5896 would build on that success and continue to modernize the nonadmitted marketplace.
New York is one of the few remaining U.S. states that still has the diligent-effort requirement in statute. Florida, Louisiana and Virginia all eliminated their state’s diligent-effort requirement within the past 12 years. Each state experienced a decrease in the excess-line market’s total share of premiums.
The repeal of this requirement demonstrated that insurance brokers did not place more business in the excess-line market. In fact in 2019, only 17% of New York-licensed retail brokers placed excess-line business through wholesale brokers for an annual average of 25 transactions each. Of those brokers, 68% placed fewer than 10 transactions with wholesale excess-line brokers. These statistics demonstrate that retail agents only go to wholesalers when their admitted markets refuse to insure a risk.
The legislation will advance to third reading when it will be considered for a vote by the full state Senate body.
Both S.5896 and S.5896 are sponsored by Sen. Neil Breslin, D-44, who serves as chair of the Senate Insurance Committee.
If you want to get involved with PIANY’s legislative and advocacy work, there are many ways to engage with the association:
- participate in PIANY’s District Office Visit Program;
- become a member of Agents Advocacy Coalition; and
- watch your PIA Northeast publications and PIA Northeast’s social-media channels for important New York updates, and share them with your followers.