2023 New York Laws › ISC - Insurance › Article 23 - Property/casualty Insurance Rates › 2321 - Enforcement and Penalties; Where Prior Approval Is Required.

§  2321.  Enforcement and penalties; where prior approval is required.
(a) Rate service organizations shall be subject to  examination  by  the
superintendent,  as  often  as he may deem it expedient, pursuant to the
provisions of this chapter applicable to the  examination  of  insurers.
Rate  service  organizations  which make rates, whether or not advisory,
shall be examined at least once in every five years.
(b) (1) If the superintendent finds that any rate  filing  theretofore
filed  does  not comply with the provisions of this article or that such
filing provides rates or rules which are inadequate, excessive, unfairly
discriminatory, destructive of competition, detrimental to the  solvency
of  the insurer, or otherwise unreasonable, the superintendent may order
the filing withdrawn and the rate suspended prospectively  upon  fifteen
days  prior  written  notice  to the rate service organization or to the
insurer  which  filed  them,  provided,  however,  such   rate   service
organization  or  insurer  may  request  a  hearing,  in  which  case no
withdrawal or suspension shall become effective pending the close of the
hearing, which shall be held within fifteen days of the request.  Within
fifteen  days  after  the close of the hearing, the superintendent shall
determine an adjusted rate based upon the hearing record deemed to be in
compliance with the standards set forth in this article, and the rate so
determined shall apply prospectively for a  period  not  to  exceed  one
year.
(2)  At  any  such  hearing,  the insurer or rate service organization
shall have the burden of justifying  the  rate  in  question.  All  such
determinations  of  the superintendent shall be on the basis of findings
of fact and conclusions. Nothing in this subsection shall  preclude  the
superintendent from determining that the last previous rate in effect or
the rate filed by the insurer or rate service organization complies with
the  standards  set  forth  in  this article. Nothing in this subsection
shall preclude the insurer or a rate service organization from making or
modifying any rate filing at any time.
(c) Whenever the superintendent finds, after  notice  and  a  hearing,
that unfair discrimination exists in the making or in the application of
rates made or used by any rate service organization or by any authorized
insurer,  he may order that the rate service organization or the insurer
remove the  discrimination;  but  the  same  shall  not  be  removed  by
increasing the rate on any risk affected by the order unless the rate is
approved  by the superintendent as reasonable. Before making such order,
the superintendent shall give notice to the rate  service  organization,
if  any,  which  made  such  rate, and to all insurers and other persons
which  he  may  deem  directly  affected  thereby.  Every  rate  service
organization  receiving  any  such  notice shall promptly notify all its
members or subscribers who would be affected by the order, and notice to
such rate service organization shall be deemed notice to its members  or
subscribers.
(d)  Proceedings  pursuant  to  subsections  (b) and (c) hereof may be
instituted upon the initiative of the  superintendent  or  upon  written
application   to   the   superintendent   by  any  aggrieved  person  or
organization, other than a rate service organization, for a hearing,  if
the  superintendent finds that the application is made in good faith and
that the grounds otherwise justify holding such a hearing.
(e) Any person, association, corporation or rate service  organization
wilfully  violating  the applicable provisions of this article shall, in
addition to any other penalty provided by law, be liable to  the  people
of  this  state  for  a  penalty  in an amount not less than twenty-five
dollars nor more than one thousand dollars  for  each  offense.  If  the
superintendent  finds  after  notice  and  hearing,  that any authorized
insurer, licensed  agent  or  licensed  insurance  broker  has  wilfully

violated  any  of the provisions of this article, he may, in lieu of any
other penalty provided by law, order the insurer, agent  or  broker,  as
the case may be, to pay to the people of this state a penalty in the sum
of  one  hundred  dollars, for each offense, and the failure of any such
person to pay the penalty within thirty days after  the  making  of  the
order,   unless   the  order  is  suspended  by  a  court  of  competent
jurisdiction, shall constitute a violation of  the  provisions  of  this
chapter.   Within   the   meaning  of  this  subsection,  the  issuance,
procurement or negotiation of each policy of insurance, by  an  insurer,
agent  or  broker,  as  the  case  may  be,  in willful violation of the
provisions of this article shall be deemed a separate offense.
(f) This  section  shall  be  applicable  to  kinds  of  insurance  or
insurance  activities  the rates for which are subject to prior approval
and which are subject to this article.