2006 New York Code - 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 insurance
  department 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.