2023 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-six, 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, 2026