2012 New York Consolidated Laws
ISC - Insurance
Article 54 - (5401 - 5414) 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 fourteen, 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, 2014