§ 5402 — Joint underwriting association

New York § 5402

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 54: New York Property Insurance Underwriting Association

Text

§ 5402. Joint underwriting association. (a) The joint underwriting\nassociation known as the New York property insurance underwriting\nassociation is continued, consisting of all insurers authorized to write\nand engaged in writing within this state, on a direct basis, fire and\nextended coverage insurance, including insurers covering such perils in\nhomeowners and commercial multiple peril package policies but excluding\nassessment cooperative fire insurance companies transacting business\npursuant to article sixty-six of this chapter. Every such insurer shall\nbe and remain a member of the association as a condition of its\nauthority to continue to transact fire, extended coverage and homeowners\ninsurance in this state.\n (b) The association shall be governed by a board of thirteen\ndirectors, ten of whom shall be elected annually by cumulative voting by\nthe members of the association, whose votes in such election shall be\nweighted in accordance with each member's net direct premiums written\nduring the preceding calendar year. The remaining three directors shall\nbe appointed annually by the superintendent and be duly licensed\ninsurance agents or brokers representative of broad segments of the\npublic obtaining insurance through the association.\n (c) The association shall, pursuant to the provisions of this article\nand the plan of operation and with respect to fire insurance, extended\ncoverage, broad form coverage issued pursuant to subsection (g) of this\nsection, coverage for additional perils, and homeowners insurance should\nthe same be made available through the association in accordance with a\ndetermination of necessity made by the superintendent pursuant to\nsection five thousand four hundred twelve of this article on insurable\nproperty, have the power on behalf of its members:\n (i) to cause policies of insurance to be issued to applicants;\n (ii) to assume reinsurance from its members; and\n (iii) to cede reinsurance.\n (d) The association shall adhere to a plan of operation, consistent\nwith the provisions of this article, approved by the superintendent\nafter consultation with affected individuals and organizations. The plan\nshall provide for economical, fair and non-discriminatory administration\nand prompt and efficient provision of fire, extended coverage, broad\nform coverage pursuant to subsection (g) of this section and homeowners\ninsurance, when a determination of necessity is made by the\nsuperintendent pursuant to section five thousand four hundred twelve of\nthis article to promote orderly community development. It shall contain\nother matters including, but not limited to, provision for necessary\nfacilities; management of the association; assessment of members to\ndefray losses and expenses; commission arrangements; reasonable and\nobjective underwriting standards; acceptance and cession of reinsurance\nand procedures for determining amounts of insurance to be provided by\nthe association. The amounts shall not be in excess of one million five\nhundred thousand dollars for the insurable real property or the tangible\npersonal property thereon.\n (e) The directors of the association may, on their own initiative or\nat the request of the superintendent, amend the plan subject to approval\nby the superintendent.\n (f) The association shall offer homeowners insurance, as defined in\nsubsection (h) of section five thousand four hundred one of this article\nupon a determination of necessity having been made by the superintendent\npursuant to section five thousand four hundred twelve of this article.\n (g) In addition to fire insurance, extended coverage, coverage for\nadditional perils and homeowners insurance should the same be made\navailable through the association in accordance with a determination of\nnecessity pursuant to section five thousand four hundred twelve of this\narticle, the association may offer broad form coverage to applicants\nseeking to insure real property at fixed locations of this state, or the\ntangible personal property located thereon. The association may offer\nbroad form coverage until June thirtieth, two thousand twenty-eight. On\nor before October first, two thousand twenty-seven the superintendent\nshall require the association to report to the superintendent as to the\nnumber of policies written pursuant to this subsection and paragraph\nthree of subsection (f) of section five thousand four hundred five of\nthis article, and any other information the superintendent may require.\nOn or before January first, two thousand twenty-eight, the\nsuperintendent shall report to the governor and the legislature\nregarding the number of policies issued pursuant to this section and\nsuch paragraph and shall include recommendations as to the continuation\nof such insurance offerings.\n (i) Not less than once every thirty days, the association shall report\nto the superintendent, the speaker of the assembly, and the temporary\npresident of the senate on the number, location and type of policies\nwritten through a coastal market assistance program.\n