NY Ins L § 5412 (2021)
2021 New York Laws ISC - Insurance Article 54 - New York Property Insurance Underwriting Association 5412 - Additional Powers of the Association.

* §  5412.  Additional  powers of the association. (a) As used in this article:  (1) "Commercial  risk  insurance",  "public  entity   insurance"   and "professional liability insurance" have the meanings ascribed to them by section  one  hundred  seven  of this chapter, except that motor vehicle insurance and medical malpractice liability insurance are excluded  from such meanings for purposes of this article;  (2) "Market"  means  a  line,  subline or classification (other than a classification delineated by geographic location)  of  property/casualty insurance  not  subject  to subsection (b) of section two thousand three hundred five, section two thousand three hundred twenty-eight or section three thousand four  hundred  twenty-five  of  this  chapter.  Provided, however,  a  "market" shall also include homeowners insurance as defined in subsection (h) of section five thousand  four  hundred  one  of  this article.  A  "market"  shall also include mandatory minimum surety bonds required  pursuant  to  section  two  hundred   fifty-eight-b   of   the agriculture and markets law.  (b)  The  association shall begin, or resume after any suspension, its insurance  underwriting  operations  for  any  market  only  after   the superintendent  has  determined  after  a hearing on a record that it is necessary, due to unavailability of meaningful coverage in a  particular voluntary market, to activate the association to write coverage for such market.  In  making  a  determination  of  necessity  pursuant  to  this subsection, the superintendent may consider such factors as: the  extent and  nature  of  competition;  size  and  significance  of the coverage; availability of adequate limits of  coverage;  efficacy  of  any  market assistance  program administered by the superintendent including but not limited to actual placement  of  coverage  through  a  voluntary  market assistance  program  at  the  time  such  determination  is  to be made; reinsurance  availability;  extent  of  consumer   complaints   to   the department  of financial services; extent of denials and restrictions of coverage;  volume  of  cancellations  and   nonrenewals;   or   changing conditions  in  the economic, judicial and social environment. If, after activating the  association  in  regard  to  a  particular  market,  the superintendent determines that ready availability of meaningful coverage in  such  voluntary  market  has  been  restored,  the association shall thereupon suspend  its  underwriting  in  regard  to  such  market.  The superintendent  shall,  no  later  than  October first, nineteen hundred eighty-six, activate the association  to  write  particular  markets  in regard  to  public  entities,  unless the superintendent determines that activation is unnecessary because public entities  are  able  to  secure meaningful  coverage  in voluntary markets, including through any market assistance program administered by the superintendent.  (c) The directors of the  association,  after  consultation  with  the superintendent,  shall forthwith prepare a plan of operation, subject to approval by the superintendent who shall act expeditiously thereon,  and the  directors  shall  take  all  other necessary steps on and after the effective date of this section to prepare for prompt  implementation  of the  association's  powers  in the event that any market is activated by the superintendent pursuant to  subsection  (b)  of  this  section.  The directors  of  the  association  may,  on their own initiative or at the request of the superintendent, amend the plan subject to approval by the superintendent.  The  superintendent  may  direct  that  the   plan   of operation, or amendments to such plan, shall include specified limits of coverage for particular markets activated.  (d)  Upon  activation  by the superintendent of any market pursuant to subsection (b) of  this  section,  all  insurers  (excluding  assessment cooperative fire insurers) authorized to write and engaged in writing on  a  direct  basis  within  this  state  commercial risk, public entity or professional liability insurance, including  commercial  multiple  peril policies,  shall  participate  as members in the association. Every such insurer  shall  be and remain a member of the association as a condition of its authority to continue to transact such insurance in  this  state. In addition to the credit provided pursuant to subsection (f) of section five  thousand four hundred five of this article, the superintendent may by regulation provide for  additional  credits  to  such  insurers  that voluntarily  provide  a  market  for those risks that the superintendent determines to be extremely difficult to place in the voluntary market.  (e) The association shall with respect to any market activated by  the superintendent pursuant to subsection (b) of this section issue policies in  accordance  with  the  association's  plan  of  operation, and shall maintain separate accounts and records for  premiums,  losses,  expenses and  investment  income  attributable  to such insurance. Assessments of insurers for expenses and any losses of the  association  in  connection with  such  insurance shall be based on an insurer's net direct premiums attributable to the types of insurance specified in  subsection  (a)  of this  section.  Rates shall be based upon loss and expense experience of the risks insured by the association pursuant to this section and  shall be  on  an  actuarially sound basis, calculated to be self-supporting at the lowest possible rates consistent with the maintenance of solvency of the association  and  of  reasonable  reserves,  surplus  and  expenses, including  commissions. The provisions of subsection (d) of section five thousand four hundred five of this article shall not apply to  insurance written pursuant to this section.  (f)  The superintendent may also activate the association for purposes of providing excess or umbrella coverages in connection with  a  market. Hazards  that  the  superintendent  determines  are uninsurable shall be excluded from coverages which the association is required to furnish.  (g) The provisions of this section shall cease to be of any  force  or effect  on  or  after  June thirtieth, two thousand twenty-three, except that policies issued or other obligations incurred  by  the  association shall  not  be  impaired  by  the  expiration  of  this  section and the association shall continue for the purpose of  servicing  such  policies and performing such obligations.   * NB Expires June 30, 2023