New York Lawmakers Propose Easing Some Insurance Regulations

The New York Senate Committee on Insurance has begun hearing on legislation that would extend insurance agents’ license renewals, allow multiple rating plans for personal lines insurers and clarify laws about insurance surcharges from car accidents — bills that will likely please agents and insurers.

The first bill (S2704) would allow the superintendent to issue insurance licenses to new agents for a period longer than 24 months. Lawmakers sought the change because of complications that emerge during agents’ initial license renewals — which fall on their birthdays every other year. In cases where an agent’s birthday shortly follows his or her application, it can mean drastically a shorter license period. The bill would give the superintendent the ability to extend the renewal date of initial licenses by up to six months, for a total of 30 months.

Another bill (S2705) would allow personal lines insurers to create multiple rating plans within a single company — which is currently prohibited by insurance law in the state. The bill is seen as a benefit to smaller, regional companies, since insurers would no longer have to bear the cost of creating subsidiaries to offer different rating plans. Each time a company develops a new plan, it would be provided only to new business customers, which is the current practice when larger insurers establish a separate corporation to offer a new plan.

The final bill (S2683) clarifies technical issues in a law passed last year that raised the threshold for vehicle damage before an insurer could add surcharges to a policy. The bill clarifies that the threshold — which was raised to $2,000 — goes into effect March 1, and gives the superintendent the authority to raise or lower that amount in the future.

All three pieces of legislation — which were the subject of intial hearings earlier this month — were sponsored by State Senator James Seward, the Insurance Committee’s chairman.

Topics New York Agencies Legislation