* § 5412. Additional powers of the association.
(a)As used in this\narticle:\n (1) "Commercial risk insurance", "public entity insurance" and\n"professional liability insurance" have the meanings ascribed to them by\nsection one hundred seven of this chapter, except that motor vehicle\ninsurance and medical malpractice liability insurance are excluded from\nsuch meanings for purposes of this article;\n (2) "Market" means a line, subline or classification (other than a\nclassification delineated by geographic location) of property/casualty\ninsurance not subject to subsection (b) of section two thousand three\nhundred five, section two thousand three hundred twenty-eight or section\nthree thousand four hundred twenty-five of this chapter. Provided,\nhowever, a "market" shall also inclu
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* § 5412. Additional powers of the association. (a) As used in this\narticle:\n (1) "Commercial risk insurance", "public entity insurance" and\n"professional liability insurance" have the meanings ascribed to them by\nsection one hundred seven of this chapter, except that motor vehicle\ninsurance and medical malpractice liability insurance are excluded from\nsuch meanings for purposes of this article;\n (2) "Market" means a line, subline or classification (other than a\nclassification delineated by geographic location) of property/casualty\ninsurance not subject to subsection (b) of section two thousand three\nhundred five, section two thousand three hundred twenty-eight or section\nthree thousand four hundred twenty-five of this chapter. Provided,\nhowever, a "market" shall also include homeowners insurance as defined\nin subsection (h) of section five thousand four hundred one of this\narticle. A "market" shall also include mandatory minimum surety bonds\nrequired pursuant to section two hundred fifty-eight-b of the\nagriculture and markets law.\n (b) The association shall begin, or resume after any suspension, its\ninsurance underwriting operations for any market only after the\nsuperintendent has determined after a hearing on a record that it is\nnecessary, due to unavailability of meaningful coverage in a particular\nvoluntary market, to activate the association to write coverage for such\nmarket. In making a determination of necessity pursuant to this\nsubsection, the superintendent may consider such factors as: the extent\nand nature of competition; size and significance of the coverage;\navailability of adequate limits of coverage; efficacy of any market\nassistance program administered by the superintendent including but not\nlimited to actual placement of coverage through a voluntary market\nassistance program at the time such determination is to be made;\nreinsurance availability; extent of consumer complaints to the\ndepartment of financial services; extent of denials and restrictions of\ncoverage; volume of cancellations and nonrenewals; or changing\nconditions in the economic, judicial and social environment. If, after\nactivating the association in regard to a particular market, the\nsuperintendent determines that ready availability of meaningful coverage\nin such voluntary market has been restored, the association shall\nthereupon suspend its underwriting in regard to such market. The\nsuperintendent shall, no later than October first, nineteen hundred\neighty-six, activate the association to write particular markets in\nregard to public entities, unless the superintendent determines that\nactivation is unnecessary because public entities are able to secure\nmeaningful coverage in voluntary markets, including through any market\nassistance program administered by the superintendent.\n (c) The directors of the association, after consultation with the\nsuperintendent, shall forthwith prepare a plan of operation, subject to\napproval by the superintendent who shall act expeditiously thereon, and\nthe directors shall take all other necessary steps on and after the\neffective date of this section to prepare for prompt implementation of\nthe association's powers in the event that any market is activated by\nthe superintendent pursuant to subsection (b) of this section. The\ndirectors of the association may, on their own initiative or at the\nrequest of the superintendent, amend the plan subject to approval by the\nsuperintendent. The superintendent may direct that the plan of\noperation, or amendments to such plan, shall include specified limits of\ncoverage for particular markets activated.\n (d) Upon activation by the superintendent of any market pursuant to\nsubsection (b) of this section, all insurers (excluding assessment\ncooperative fire insurers) authorized to write and engaged in writing on\na direct basis within this state commercial risk, public entity or\nprofessional liability insurance, including commercial multiple peril\npolicies, shall participate as members in the association. Every such\ninsurer shall be and remain a member of the association as a condition\nof its authority to continue to transact such insurance in this state.\nIn addition to the credit provided pursuant to subsection (f) of section\nfive thousand four hundred five of this article, the superintendent may\nby regulation provide for additional credits to such insurers that\nvoluntarily provide a market for those risks that the superintendent\ndetermines to be extremely difficult to place in the voluntary market.\n (e) The association shall with respect to any market activated by the\nsuperintendent pursuant to subsection (b) of this section issue policies\nin accordance with the association's plan of operation, and shall\nmaintain separate accounts and records for premiums, losses, expenses\nand investment income attributable to such insurance. Assessments of\ninsurers for expenses and any losses of the association in connection\nwith such insurance shall be based on an insurer's net direct premiums\nattributable to the types of insurance specified in subsection (a) of\nthis section. Rates shall be based upon loss and expense experience of\nthe risks insured by the association pursuant to this section and shall\nbe on an actuarially sound basis, calculated to be self-supporting at\nthe lowest possible rates consistent with the maintenance of solvency of\nthe association and of reasonable reserves, surplus and expenses,\nincluding commissions. The provisions of subsection (d) of section five\nthousand four hundred five of this article shall not apply to insurance\nwritten pursuant to this section.\n (f) The superintendent may also activate the association for purposes\nof providing excess or umbrella coverages in connection with a market.\nHazards that the superintendent determines are uninsurable shall be\nexcluded from coverages which the association is required to furnish.\n (g) The provisions of this section shall cease to be of any force or\neffect on or after June thirtieth, two thousand twenty-six, except that\npolicies issued or other obligations incurred by the association shall\nnot be impaired by the expiration of this section and the association\nshall continue for the purpose of servicing such policies and performing\nsuch obligations.\n * NB Expires June 30, 2026\n