11 CRR-NY 301.0NY-CRR
11 CRR-NY 301.0
11 CRR-NY 301.0
(a) On October 27, 1986, Congress enacted the Federal Liability Risk Retention Act of 1986 (15 USC 3901 et seq.) (LRRA), amending the Product Liability Risk Retention Act of 1981. Certain State laws affecting the purchase of commercial liability insurance on a group basis by purchasing groups are specifically preempted by the LRRA, by which Congress intends to facilitate the formation and operation of purchasing groups and the ability of insurers to provide group coverage for such purchasing groups.
(b) In response to the LRRA, a new article 59 of the Insurance Law, entitled Risk Retention Groups and Purchasing Groups, was enacted into law on June 13, 1988. Article 59 will take effect on December 10, 1988, conforming New York law to the LRRA to the extent necessary as well as implementing a State regulatory framework for these new entities.
(c) Prior to the enactment of article 59, it was necessary to provide guidance to the insurance industry, including the risk retention sector, and the general public as to the continuing applicability of the New York Insurance Law and related laws in conjunction with and not preempted by the LRRA. Accordingly, this Part was promulgated initially on an emergency basis on February 16, 1988, effective February 22, 1988, and twice repromulgated, again on an emergency basis, on April 21, 1988, effective April 22, 1988, and on June 20, 1988, effective June 21, 1988, without any lapse.
(d) The superintendent held a public hearing on March 9, 1988 in connection with proposed and emergency Part 301. Some of the public comments received, both at and following the hearing, asserted that this Part was contrary to “the spirit and intent” of the LRRA. These comments assumed that the LRRA had preempted state regulatory control to an extent beyond that recognized by the superintendent in enacting this Part.
(e) The superintendent's authority and duty is to enforce and interpret the Insurance Law and other related New York laws, consistent with applicable Federal law. Recent Federal court decisions confirm the proposition that the superintendent is acting in a manner consistent with both the letter and the spirit of the LRRA.
(f) Given the LRRA's explicit preemption of only certain State laws regarding purchasing groups and their insurers, those State laws not so preempted continue to apply. Thus, statutory and regulatory requirements of the New York Insurance Law and regulations not preempted by the LRRA remain applicable to purchasing groups and their insurers doing business in this State.
(g) This Part:
(1) clarifies how existing requirements of the Insurance Law not preempted by the LRRA apply to purchasing groups and insurers of such groups, to reduce confusion as to how such laws operate in regard to insurance sold on a purchasing group basis;
(2) distinguishes between transactions involving the group and transactions involving the group members;
(3) applies only to insurance transactions with a New York nexus, in the same manner as in nonpurchasing group situations;
(4) specifies rules for the transitional period before article 59 takes effect on December 10, 1988, and establishes rules which apply on and after such effective date (except as otherwise provided, all sections of this Part are applicable on and after the effective date of this Part [August 22, 1988]);
(5) specifies rules governing the application of New York law to rate and form requirements for authorized insurers and the placement of business with unauthorized insurers, including excess line laws, as such laws and requirements relate to the placement and writing of insurance coverage for purchasing groups and their members in this State; and
(6) establishes registration procedures for purchasing groups doing business in this State with reasonable fees to defray the department's costs relative to such registration.
11 CRR-NY 301.0
Current through February 15, 2021
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