NY Ins L § 2313 (2021)
2021 New York Laws ISC - Insurance Article 23 - Property/casualty Insurance Rates 2313 - Rate Service Organization; Defined.

§ 2313. Rate service organization; defined. (a) In this article, "rate service  organization" means a person or any other entity which makes or files rates as permitted by this article, or which assists  insurers  in rate  making  or  filing by collecting, compiling and furnishing loss or expense statistics, or by recommending rates  or  rate  information,  or which  inspects risks, tests appliances, formulates rules or establishes standards, as such activities relate to rate making or to administration of rates. It shall include a person or entity which prepares  and  files policy  forms  and  endorsements  on  behalf  of  insurers. It shall not include a joint underwriting  association  under  section  two  thousand three  hundred seventeen of this article, or any employee of an insurer, or in the case  of  insurers  under  common  control  or  management  an employee  of  any  such  insurer  or their manager, nor shall it include actuaries,   certified   public   accountants,   attorneys   or    other professionals  who  in their respective vocations may advise insurers on rate questions.  (b) Except as provided in subsection  (j)  hereof,  no  insurer  shall utilize   the  services  of  a  rate  service  organization  unless  the organization has obtained a license as provided by this section.  (c) No rate service organization shall refuse to supply  any  services which  it is permitted to render in this state to any insurer authorized to do business in this state and offering to  pay  the  fair  and  usual compensation for the services.  (d)  A rate service organization applying for a license as required by subsection (b) hereof shall include with its application:  (1) a copy of its constitution,  charter,  articles  of  organization, agreement,  association  or corporation, and a copy of its by-laws, plan of operation and any other rules or regulations governing the conduct of its business;  (2) a list of its members and its subscribers;  (3) the name and address of one or more residents of this  state  upon whom  notices,  process affecting it or orders of the superintendent may be served;  (4) where appropriate a statement indicating  one  or  more  kinds  of insurance,  or  classes  of  risks,  or  any  part or combination of the foregoing, for which it seeks to obtain a license;  (5) a statement showing its technical qualifications for acting in the capacity for which it seeks a license; and  (6)  any  other  relevant   information   and   documents   that   the superintendent may require.  (e)  The  officers,  members  of the governing board or committee, and other persons in control  of  a  corporation  or  of  an  unincorporated association,  for  the  time  being,  and each partner of a partnership, shall be held  individually  responsible  for  knowingly  violating  any provisions  of  this article applicable to such corporation, association or partnership as a rate service organization.  (f) Every organization which has applied for  a  license  pursuant  to subsection   (d)   hereof   shall   thereafter   promptly   notify   the superintendent of every material change in the facts or in the documents as filed.  (g) If the superintendent finds that the  applicant  and  the  natural persons through whom it acts are competent, trustworthy, and technically qualified to provide the services proposed, and that all requirements of law are met, he shall issue a license specifying the authorized activity of the applicant.  (h)  Licenses  issued  pursuant to this section shall remain in effect until the licensee withdraws from the state  or  until  the  license  is suspended or revoked.  (i)  Any  amendment  to  a document filed pursuant to paragraph one of subsection (d) hereof shall be filed at  least  thirty  days  before  it becomes effective. Failure to comply shall be a ground for revocation of the license granted pursuant to subsection (h) hereof.  (j)  A rate service organization which does not make or file rates, as permitted by this article, is not required to  obtain  a  license  under this  section  but  no insurer shall utilize the services of such a rate service  organization  unless  the  organization  has  filed  with   the superintendent  the  information  and documents prescribed in subsection (d) hereof and shall thereafter promptly notify  the  superintendent  of every   material   change   in   the   information   or  documents.  The superintendent may order any insurer or rate service organization  found to be in violation of this subsection to discontinue such violation.  (k)  If, after a hearing, the superintendent finds that the furnishing of such information or assistance by a rate service organization subject to subsection (j) hereof involves any act or practice which is unfair or unreasonable or otherwise  inconsistent  with  the  provisions  of  this article,  he  may  issue a written order specifying in what respects the act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this article, and requiring the discontinuance of  the act or practice.  (l)  No rate service organization shall directly or indirectly require the payment of any licensing, registration  or  membership  fee  by  any broker,  as such, who is licensed under this chapter; nor shall any rate service organization or any other association or  bureau  refuse  to  do business with, or prohibit or prevent the payment of commissions to, any person licensed as an insurance broker under this chapter.  (m)  No  rate service organization shall adopt any rule, the effect of which would be to prohibit or  regulate  the  payment  of  dividends  to policyholders.  (n)  A  rate  service  organization  may  subscribe  for  or  purchase actuarial, technical or other  services,  and  such  services  shall  be available to all members and subscribers without discrimination.  (o) Cooperation among rate service organizations or among rate service organizations and insurers in rate making or in other matters within the scope  of  this  article  is  hereby  authorized,  provided  the  filing resulting from such cooperation is subject to all the provisions of this article which are applicable to filings  generally.  The  superintendent may  review  such  cooperative  activities and practices and if, after a hearing, he finds that any  such  activity  or  practice  is  unfair  or unreasonable  or  otherwise inconsistent with this article, he may issue an order specifying in what respects such activity or practice is unfair or  unreasonable  or  otherwise  inconsistent  with  this  article,  and requiring the discontinuance of such activity or practice.  (p)  A  rate  service  organization  which  pursuant to subsection (j) hereof is not required to obtain a license is expressly prohibited  from using  or permitting the use of the phrase "supervised by the department of financial services of the  state  of  New  York"  or  any  comparable phrase,  or  one  which  is  likely  to  create the impression that such organization is supervised or subject to supervision by it.  (q) Any rate service organization may provide for the  examination  of policies, daily reports, binders, renewal certificates, endorsements, or the  cancellation thereof, and may make reasonable rules governing their submission. Such rules shall contain a provision that in  the  event  an insurer  does not within sixty days furnish satisfactory evidence to the rate service organization of the correction of  any  error  or  omission previously  called to its attention by the rate service organization, it shall be the duty  of  the  rate  service  organization  to  notify  the  superintendent.  All  information  so submitted for examination shall be confidential.  (r)  A  rate  service  organization  licensed pursuant to this section which  files  rates,  rating  plans  or  other  statistical  information pursuant  to  paragraph  one  of  subsection (b) of section two thousand three hundred five of this  article  or  otherwise  relating  to  or  in support  of  coverages written by its members or subscribers pursuant to paragraph fifteen of subsection (a) of section one thousand one  hundred thirteen of this chapter shall be subject to audit by the superintendent by  December  thirty-first,  nineteen  hundred ninety-seven and not less than once every three years thereafter. Such  audit  shall  examine  the finances  and  operations  of such rating organization and shall further make recommendations for actions to be taken by such rating organization in furtherance of the findings of such audit. The  superintendent  shall complete  an  audit report no later than sixty days after the conclusion of the audit period and shall submit such audit report to  the  governor and the legislature.  (s)  Notwithstanding  any  other  provision  of  this article, no rate service organization may file rates for workers' compensation  insurance after   February   first,   two  thousand  eight,  but  a  rate  service organization may file  loss  costs  or  other  statistical  information, including  rating  plans,  until  June  second,  two  thousand eighteen. Notwithstanding subsection (j) of this section, any  such  rate  service organization  shall  nonetheless  be required to be licensed pursuant to this section.   * (t) (1) The governing body of a workers' compensation  rate  service organization  shall  be  comprised  of nine voting members. Four members shall represent  insurers  authorized  to  write  workers'  compensation insurance  in  this  state,  and  shall be selected in such manner as is determined by the members of the rate service organization.  One  member of  the  governing body shall be a representative of the state insurance fund. Each of the remaining four members of  the  governing  body  shall serve  for a term of two years and until his or her successor shall have been  appointed  and  approved,  provided  that  the  appointing  entity appoints  a  successor  member  within  one  hundred  twenty days of the expiration of the term of office, and shall not be employed by, or serve as an officer or director of, an insurer authorized  to  write  workers' compensation  insurance  in  this  state,  or any parent, subsidiary, or affiliate thereof. One such  member  of  the  governing  body  shall  be appointed  by  the superintendent. The other three such members shall be appointed  subject  to  the  approval  of  the  superintendent  by   the following: (A) the workers' compensation board; (B) the Business Council of  New  York  State,  Inc.;  and (C) the American Federation of Labor - Congress of Industrial Organizations of New York State. Any  vacancy  on the  governing  body  shall  be filled in the same manner as the initial appointment. The governing body shall select a chief  executive  officer who  shall  serve  at the pleasure of the governing body and whose terms and conditions of employment shall be approved by the governing body. No restriction in this subsection shall apply if compliance is prevented by the failure of any appointing authority to make an  appointment,  or  of the superintendent to approve such appointment.  (2)  The  governing  body  of  a  workers'  compensation  rate service organization  shall  have  charge  of  the  general  activities  of  the organization,  including  control  and supervision over its finances and authority to establish budgets, approve assessments and impose fines  on members of the rate service organization.  (3)  A  workers'  compensation rate service organization shall have an underwriting committee and a medical  and  claims  committee,  and  such  other   committees   as   the  governing  body  deems  appropriate.  The underwriting committee shall have the same allocation of voting  members as  the  workers' compensation rate service organization governing body, and  it  shall  be  the  responsibility of the underwriting committee to address matters with respect to  policy  forms  and  endorsements,  loss costs,  rating  and statistical plans, payroll audits and other employer related issues. It shall be the responsibility of the medical and claims committee to study the  administration  of  claims  under  the  workers' compensation  law,  and  medical,  surgical and hospital care of injured workers.  (4) A workers' compensation rate service organization  shall  have  an actuarial  committee.  It  shall  be the responsibility of the actuarial committee to review methodology and data collection  processes  used  to develop  loss  costs.  The  American  Federation  of Labor - Congress of Industrial Organizations of New York State and the Business  Council  of New  York  State,  Inc.  shall together appoint one independent casualty actuary who is a fellow or associate of the casualty  actuarial  society to serve as a member of the actuarial committee. The appointment of such actuary,  and  his  or  her  compensation  and  terms  and conditions of retention, shall be subject to the approval  of  the  superintendent  as reasonable  and  customary  for  such professional. The actuary shall be paid by  the  workers'  compensation  rate  service  organization.  Such actuary  shall  have  the  same access to the workers' compensation rate service organization data and documents as the  other  members  of  that committee.  The  governing  body of a workers' compensation rate service organization shall select a chief actuary of  the  actuarial  committee, who  shall  serve  at the pleasure of the governing body and whose terms and conditions of employment shall be approved by  the  governing  body. The  public  actuary  shall  issue a report on or before June first, two thousand eighteen and each of the next ten years, indicating the overall savings in the workers' compensation system  as  a  result  of  the  two thousand seventeen reforms.  (5)  A  workers'  compensation  rate service organization shall assess insurers that write workers' compensation coverage in New York state for expenses it incurs in its operation. Nothing  in  this  paragraph  shall prevent  a  workers'  compensation  rate  service organization from also obtaining funds from any other source.  (6) A workers' compensation rate service organization shall retain all data  used  to  calculate  rates,  class  relativities,  and  experience modifications,  as  well  as  all data underlying any loss cost or other filing made with the department, and any other data  the  superintendent may direct, for such period of time as the superintendent shall direct.   * NB Repealed June 2, 2028