NY Ins L § 2344 (2021)
2021 New York Laws ISC - Insurance Article 23 - Property/casualty Insurance Rates 2344 - Flexible Rate Limitations in Problem Markets.

* § 2344. Flexible rate limitations in problem markets. (a) As used in this section:  (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.  (2) "Rate" means charge per unit of exposure  (whether  such  rate  is manually generated or based upon judgment) for a particular market.  (b)   The   superintendent   shall   by  regulation  establish  annual limitations upon rate level increases or decreases which may take effect without prior approval with respect to a market. The regulation shall be designed to restore and  promote  stability  in  such  markets.  Upon  a determination  made  that,  as  to  a  particular market, competition is either sufficient to assure that rates will not  be  excessive  or  that such  market is conducted in a manner not resulting in inadequate rates, not destructive  of  competition  or  detrimental  to  the  solvency  of insurers,   the   superintendent  shall  exempt  such  market  from  the limitations set forth in such regulation.  The  superintendent,  upon  a determination  that  annual  limitations  are  necessary  to restore and promote stability in such a market, shall thereafter withdraw or  modify such   exemption.   The   superintendent  shall  whenever  he  deems  it appropriate hold a hearing, on a record and at which representatives  of consumers  and other interested parties may participate, for the purpose of determining, on the  basis  of  findings  of  fact  and  conclusions, whether  an  exemption  (or  withdrawal  or modification thereof) of any market is appropriate. The initial hearing for  such  purpose  shall  be held  within  sixty  days of the effective date of this section, and the superintendent shall act expeditiously in determining whether to  exempt any market.  (c)  Limitations established or modified pursuant to subsection (b) of this section may vary by market and, in establishing or  modifying  such limitations, the superintendent may consider such factors as: the extent and  nature of competition; size and significance of the coverage; level and range of rates and  rate  changes  among  insurers;  investment  and underwriting experience of insurers; 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.  (d)  (1)  Notwithstanding any other provisions of this article, in any market  governed  by  such  regulation   and   not   exempted   by   the superintendent pursuant to this section, filings that produce rate level changes within the limitations specified in such regulation shall become effective  without  prior approval pursuant to subsection (a) of section two thousand three hundred five of this article; filings  which  produce rate  level  changes  beyond such limitations shall not become effective until approved by the  superintendent  pursuant  to  subsection  (b)  of section  two  thousand  three  hundred five of this article, except that filings  shall  be   deemed   approved   unless   disapproved   by   the superintendent  within  thirty  days,  which the superintendent may with cause extend an additional thirty days and with further cause extend  an additional fifteen days.  (2)  No  insurer  shall  cause  an  expiring policy to be renewed with another insurer under common control, as defined by paragraph sixteen of subsection (a) of section one hundred seven of this chapter in order  to avoid  the limitations established by this section. An insurer may renew  an expiring policy with another insurer under common control based  upon underwriting criteria or other valid business reasons.  (e)  The  superintendent  shall  by  regulation  establish  reasonable standards for rating plans (including experience rating plans,  schedule rating  plans,  individual  risk  premium modification plans and expense reduction plans) designed to modify rates in the development of premiums for  individual  risks  insured  in  a  property/casualty  market.  Such standards  shall  permit  recognition of expected differences in loss or expense characteristics, and shall be designed so that  such  plans  are reasonable  and  equitable  in  their  application, and are not unfairly discriminatory, violative of public policy or otherwise contrary to  the best  interests  of  the  people of this state. Such standards shall not prevent the development  of  new  or  innovative  rating  methods  which otherwise  comply with this article. Such rating plans shall be filed or refiled  by  insurers   in   compliance   with   the   regulation.   The superintendent  shall  review  such  plans,  and  may  without a hearing disapprove a  plan  that  does  not  comply  with  the  regulation.  The regulation  shall  establish  maximum debits and credits that may result from the application of a rating plan,  shall  encourage  loss  control, safety  programs and other methods of risk management, and shall require insurers to maintain documentation  of  the  basis  for  the  debits  or credits applied under any plan. Once it has been filed and approved, use of the rating plan shall become mandatory and such plan shall be applied uniformly   for  eligible  risks  in  a  manner  that  is  not  unfairly discriminatory.  (f) The superintendent shall  review  all  rates  filed  between  June first,  nineteen  hundred  eighty-six,  and  the  effective  date of the regulation promulgated pursuant to subsection (b) of this  section,  and shall,  on  a  selective  basis,  review rates established prior to June first, nineteen hundred eighty-six, including rates not manually  rated, to   determine   whether  they  comply  with  the  applicable  standards prescribed by this  article  for  purposes  of  the  annual  limitations established  or  modified pursuant to subsection (b) of this section. In establishing priorities for such selective  review,  the  superintendent shall  give  consideration  to  markets  which  have been subject to the largest rate changes in the twelve month period  prior  to  June  first, nineteen hundred eighty-six and to markets affecting the greatest number of  risks;  the  superintendent  shall  to the extent material also give consideration to the criteria  set  forth  in  subsection  (c)  of  this section.  In  addition,  the  superintendent shall to the fullest extent possible  review  markets  not  manually  rated,  for  the  purpose   of determining  whether  a  manual  rate  is  appropriate and shall, upon a determination  of  appropriateness,  require  that  a  manual  rate   be developed  for  such  market.  If the superintendent determines that the reviewed rate pursuant to the mandatory or selective review specified by this subsection does not comply with the applicable standards prescribed by this article, the insurer shall be  afforded  an  opportunity  to  be heard  and  shall file in accordance with such determination prospective rates applicable to  new  and  renewal  policies.    Except  as  to  the procedures  set  forth  in  this  subsection,  nothing contained in this subsection shall be  construed  to  alter,  limit,  modify,  enlarge  or abrogate  any  right  of  any  insurer  or any power or authority of the superintendent under any other provision of this chapter.  (g) (1) Within ninety days after the effective date  of  this  section every insurer licensed to write property/casualty coverages in regard to a  market  not  exempted  pursuant to subsection (b) of this section and affected by the statutory provisions specified in this  paragraph  shall file  with the superintendent rates, for each such market written by the  insurer, appropriately modified to reflect  the  likely  reductive  cost effects   reasonably   attributable   to  any  newly  enacted  statutory provisions of the civil practice law and rules, court of claims act  and not-for-profit  corporation  law.  Such filings shall contain a specific explanation of the reductive cost effects (which shall also be expressed in amounts or percentages) ascribed to such statutory provisions,  in  a form prescribed by the superintendent. In regard to a market not subject to this section or exempted pursuant to this section, subsequent filings shall  reflect  likely reductive cost effects reasonably attributable to such statutory provisions appropriate to such market.  (2)  The  superintendent  shall  determine  whether  the  rates  filed pursuant  to  paragraph  one  of  this subsection reasonably reflect the likely reductive cost effects attributable to the  statutory  provisions specified in paragraph one of this subsection.  (3)  In  the  event that the superintendent determines that the likely reductive cost effects are not properly reflected  in  such  rates,  the basis  for  such  determination  shall be stated and, within thirty days after receipt of such determination, the affected insurer may request  a hearing.  All policies written or renewed on or after the effective date of  the  statutory  provisions  specified  in  paragraph  one  of   this subsection  shall  be  subject to appropriate premium adjustments in the event the superintendent's determination is sustained, and  the  insurer shall maintain its records in regard to each such policy for a period of no  less  than six years in order to verify that appropriate adjustments have been made.  (4) For purposes of the annual  limitations  established  pursuant  to subsection   (b)   of   this   section,  the  rates  determined  by  the superintendent to reasonably reflect the likely reductive  cost  effects of the provisions specified in paragraph one of this subsection shall be treated  as if they had been in effect for the twelve month period prior to the date of such determination.  (h) This section shall cease to be of any force or effect  during  the period  August  third,  two  thousand  one  through  the  day before the effective date of the property/casualty insurance availability act,  and after June thirtieth, two thousand twenty-three, except that rates shall reflect the likely reductive cost effects reasonably attributable to the statutory  provisions  specified  in  paragraph one of subsection (g) of this section.   * NB Expires July 1, 2023