(a) Section 2349 of the Insurance Law, effective May 28, 1995, pursuant to chapter 9 of the Laws of 1995, and further amended by chapter 287 of the Laws of 1995, signed into law by Governor George E. Pataki on July 26, 1995 and also effective May 28, 1995, explicitly permits insurers in the voluntary private passenger motor vehicle authorized insurance market to establish multi-tier programs that encourage depopulation of the New York Automobile Insurance Plan (AIP). A multi-tier program is one in which there is more than one rate level or tier in the same company, and associated with each rate level or tier there is a complete rating system. The placement of insureds in the various rating tiers is based on underwriting rules.

(b) The purpose of this Part is to establish the rules that each insurer's multi-tier program shall comply with as mandated by section 2349. These rules encompass, among other items, the placement and rating of insured in the various tiers, and the application of sections 2349 and 3425 with regard to multi-tier program nonrenewals.