Source: http://www.dfs.ny.gov/insurance/ogco2001/rg101092.htm
Timestamp: 2018-02-22 02:46:47
Document Index: 5797051

Matched Legal Cases: ['§ 3426', '§ 3426', '§ 3426', '§ 3426', '§ 3426', '§ 3426', '§ 2344', '§ 2328', '§ 2328', '§ 2305', '§ 2305', '§ 2328', '§ 2344', '§ 3425', '§ 3446', '§ 2344']

Section 3426(e)(8); Plan of orderly withdrawal; livery insurance
The Office of General Counsel issued the following informal opinion on January 9, 2001, representing the position of the New York State Insurance Department.
Re: Section 3426(e)(8); Plan of orderly withdrawal; livery insurance
1. Does N.Y. Ins. Law § 3426(e)(8) apply to public livery insurance?
2. Must an insurer submit a plan of orderly withdrawal from a market, as defined in N.Y. Ins. Law § 3426(a)(11), where the insurers portion of that market is one percent or less?
1. N.Y. Ins. Law Section 3426(e)(8) does not apply to public livery insurance and an insurer is not required to file a plan of orderly withdrawal when it issues blanket or mass nonrenewal notices for such insurance.
2. An insurer is not required under N.Y. Ins. Law § 3426(e)(8) to file a plan of orderly withdrawal from a market, as defined in N.Y. Ins. Law § 3426(a)(11), if the insurers portion of the market represents one percent or less of that market.
This inquiry concerns the applicability of § 3426(e)(8) in regard to an insurers planned withdrawal from writing insurance business. This inquiry concerns both public livery insurance and other types of commercial lines insurance.
N.Y. Ins. Law § 3426 (McKinney 2000) provides, in pertinent part:
(a)(10) "Blanket" or "mass" nonrenewal means a situation where the insurer within a six-month period is nonrenewing policies representing more than one percent of a market.
(a)(11) "Market" shall have the meaning ascribed by paragraph one of subsection (a) of section two thousand three hundred forty-four of this chapter.
(e)(8) No insurer may issue blanket or mass nonrenewal notices for any market, except upon submission to the superintendent, at least forty-five days in advance of mailing or delivery of such notices, of a plan for orderly withdrawal that describes the proposed nonrenewals, states the basis for such nonrenewals, and identifies any measures such insurer intends to take in order to minimize market disruption.
N.Y. Ins. Law § 2344(a) (McKinney 2000) provides, in pertinent part:
(1) "Market" means a line, subline or classification (other than a classification delineated by geographic location) of property/casualty insurance risks whose coverages are not subject to subsection (b) of section two thousand three hundred five, section two thousand three hundred twenty- eight, section three thousand four hundred twenty-five, or three thousand four hundred forty-six of this chapter.
N.Y. Ins. Law § 2328 (McKinney 2000) states that it applies "only to policies covering losses or liabilities arising out of ownership of a motor vehicle used principally for the transportation of persons for hire, including a bus or a school bus as defined in sections one hundred four and one hundred forty-two of the vehicle and traffic law." Public livery insurance insures vehicles for hire used principally for the transportation of persons. Hence, § 2328 applies to public livery insurance.
N.Y. Ins. Law § 2305(b)(2) (McKinney 2000) applies to "motor vehicle insurance, or surety bonds, required by section three hundred seventy of the vehicle and traffic law". Public livery insurance is subject to Section 370. Hence, § 2305(b) also applies to public livery insurance, although the prior approval requirements thereunder have been modified by § 2328.
The references in N.Y. Ins. Law § 2344(a)s definition of "market" to N.Y. Ins. Law § 3425 (McKinney 2000) (non-commercial insurance) and N.Y. Ins. Law § 3446 (McKinney 2000) (product or systems group policies) are not applicable and are therefore not relevant to this discussion.
Since public livery insurance is included among the lines, sublines, or classifications that are exempted from of the definition of a "market" in N.Y. Ins. Law § 2344(a), public livery insurance is not a "market" within that definition and an insurer is not required to submit a plan for orderly withdrawal when it issues blanket or mass nonrenewals in connection with such insurance.
One percent of the market
Regarding a line of commercial insurance that does constitute a market, an orderly plan of withdrawal is required only where the insurer intends to non-renew policies during a six month period that represent more than one percent of the market for that line of insurance.
For further information, you may contact Supervising Attorney Paul A. Zuckerman at the New York City Office.