N.Y. Dept. Finalizes Rule To Expand Export List

NU Online News Service, Sept. 4, 12:20 p.m. EDT

The New York State Insurance Department has added coverages to its excess and surplus lines "export list"– coverages an excess lines broker can place with a non-admitted carrier without first getting three declinations from New York licensed carriers.

In a hearing held in June 2008, retail and wholesale agents urged expansion of the list to eliminate what they said are the unnecessary regulatory burdens inherent in the current system. Regulators said at the time that the department would consider the agents' arguments, but would also examine possible negative consequences of allowing agents to place business with carriers not licensed in the state without first receiving declinations from admitted carriers.

In June 2009, the department formally proposed a regulation to expand the list.

In the final approved version, nine coverages were added where agents do not have to receive declinations from admitted carriers, and 10 additional coverages now require two declinations instead of three.

The nine coverages that require no declinations are:

oCommercial excess and umbrella liability with limits of at least $10 million.

oCommercial property–commercial excess liability with coverage in excess of $50 million, and primary or excess property insurance coverage for business property with a total insured value in excess of $200 million.

oContract frustration.

oEmployed lawyers liability.

oSome general liability coverages for some general contractors, subcontractors, and all construction trades.

oPrize indemnification.

oSpecial events.

oSpecial multi peril coverage.

oVacant commercial property.

At the June 2008 hearing, agents spoke at length about difficulties in securing general liability coverage for contractors, which was included in the new rule, and homeowners coverage for residents of Long Island coastal counties of Nassau and Suffolk, which was not included.

Coverages now requiring two declinations include:

oAlcohol and/or drug rehabilitation centers.

oAlcohol and/or drug rehabilitation programs.

oResidential facilities including convalescent centers, nursing homes, and assisted care facilities.

oDay care centers for adults, children or the physically or mentally disabled.

oGroup homes for adults, children or the physically or mentally disabled.

oHalfway houses for adults, children and/or the physically or mentally disabled.

oHospices care service providers.

oSocial services agencies.

oFoster care service providers.

oHome health care providers.

The initial proposal to expand the export list was initiated by the Excess Lines Association of New York.