New York Register, Volume 35, Issue 17, April 24, 2013
| Jurisdiction | New York |
| Library | New York Register |
| Published date | 24 April 2013 |
| Year | 2013 |
RULE MAKING
ACTIVITIES
Each rule making is identified by an I.D. No., which consists
of 13 characters. For example, the I.D. No.
AAM-01-96-00001-E indicates the following:
AAM -the abbreviation to identify the adopting agency
01 -the State Register issue number
96 -the year
00001 -the Department of State number, assigned upon
receipt of notice.
E -Emergency Rule Making—permanent action
not intended (This character could also be: A
for Adoption; P for Proposed Rule Making; RP
for Revised Rule Making; EP for a combined
Emergency and Proposed Rule Making; EA for
an Emergency Rule Making that is permanent
and does not expire 90 days after filing.)
Italics contained in text denote new material. Brackets
indicate material to be deleted.
Department of Financial Services
EMERGENCY
RULE MAKING
Supplementary Uninsured/Underinsured Motorist Insurance
I.D. No. DFS-17-13-00001-E
Filing No. 379
Filing Date: 2013-04-04
Effective Date: 2013-04-16
PURSUANT TO THE PROVISIONS OF THE State Administrative Pro-
cedure Act, NOTICE is hereby given of the following action:
Action taken: Amendment of Subpart 60-2 (Regulation 35-D) of Title 11
NYCRR.
Statutory authority: Financial Services Law, sections 202 and 302; and
Insurance Law, sections 301 and 3420; and L. 2012, ch. 496; and L. 2013,
ch. 11
Finding of necessity for emergency rule: Preservation of general welfare.
Specific reasons underlying the finding of necessity: Insurance Law Sec-
tion 3420 sets forth standard provisions that must be included in all li-
ability policies issued in this state. Insurance Law Section 3420(f)(2)
requires motor vehicle liability insurers to provide, at the option of the
insured, supplementary uninsured/underinsured motorists (“SUM”) insur-
ance coverage to all policyholders in New York State. This regulation
implements Insurance Law Section 3420(f)(2) by establishing a standard
policy form for SUM coverage.
On December 17, 2012, Governor Andrew Cuomo signed into law
Chapter 496 of the Laws of 2012, to take effect on April 16, 2013, amend-
ing Insurance Law Section 3420(f) pertaining to SUM coverage for
ambulance services, volunteer fire departments and voluntary ambulance
services. Subsequently, on March 15, 2013, Governor Cuomo signed into
law Chapter 11 of the Laws of 2013, also to take effect on April 16, 2013,
amending Chapter 496. The law now requires that all policies providing
SUM coverage that are issued or renewed on or after April 16, 2013
include such coverage for members and employees of fire departments,
fire companies, ambulance services or voluntary ambulance services when
the policy insures the fire department, fire company, ambulance service or
voluntary ambulance service.
Insurers must amend their policy forms in accordance with the regula-
tions with respect to new and renewal policies. Accordingly, Insurance
Regulation 35-D must be amended on an emergency basis so that insurers
can issue policy forms in accordance with the regulation.
For the reasons stated above, emergency action is necessary for the
general welfare.
Subject: Supplementary Uninsured/Underinsured Motorist Insurance.
Purpose: To implement chapter 11 of the Laws of 2013 requiring SUM
coverage for employees of fire departments and ambulance services.
Text of emergency rule: Section 60-2.3(f), INSURING AGREEMENTS
I. Definitions: definition (a) is hereby amended to read as follows:
(f) Prescribed SUM endorsement:
SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS
ENDORSEMENT--NEW YORK
We, the company, agree with you, as the named insured, in return for
payment of the premium for this coverage, to provide Supplementary
Uninsured/Underinsured Motorists (SUM) coverage, subject to the fol-
lowing terms and conditions:
INSURING AGREEMENTS
I. Definitions:
For purposes of this SUM endorsement, the following terms have the
following meanings.
(a) Insured. The unqualified term ‘‘insured’’ means:
(1) you, as the named insured and, while residents of the same
household, your spouse and the relatives of either you or your spouse;
(2) any person while acting in the scope of that person's duties for
you, except with respect to the use and operation by such person of a mo-
tor vehicle not covered under this policy, where such person is:
1
(i) your employee and you are a fire department;
(ii) your member and you are a fire company, as defined in Gen-
eral Municipal Law section 100;
(iii) your employee and you are an ambulance service, as defined
in Public Health Law section 3001; or
(iv) your member and you are a voluntary ambulance service, as
defined in Public Health Law section 3001;
(3) any other person while occupying:
(i) a motor vehicle insured for SUM under this policy; or
(ii) any other motor vehicle while being operated by you or your
spouse; and
[(3)] (4) any person, with respect to damages such person is entitled
to recover, because of bodily injury to which this coverage applies
sustained by an insured under paragraph (1)[ or],(2) or (3) above.
Subdivision 60-2.3(f), CONDITIONS, conditions (1) and (6) are hereby
amended to read as follows:
CONDITIONS
1. Policy Provisions. None of the Insuring Agreements, Exclusions or
Conditions of the policy shall apply to the SUM coverage except: ‘‘Duties
After an Accident or Loss’’; ‘‘Fraud’’; and ‘‘Termination’’ if
applicable.[*]
2
6. Maximum SUM Payments: Regardless of the number of insureds,
our maximum payment under this SUM endorsement shall be the differ-
ence between:
(a) the SUM limits; and
1
(b) the motor vehicle bodily injury liability insurance or bond payments
received by the insured or the insured’s legal representative, from or on
behalf of all persons that may be legally liable for the bodily injury
sustained by the insured.
The SUM limit shown on the Declarations is the amount of coverage
for all damages due to bodily injury in any one accident.[
1
]
3
(The SUM
limit shown on the Declarations for “Each Person” is the amount of cover-
age for all damages due to bodily injury to one person. The SUM limit
shown under “Each Accident” is, subject to the limit for each person, the
total amount of coverage for all damages due to bodily injury to two or
more persons in the same accident.)[
2
]
4
———————————
1
Language in paragraph (2) may be deleted for covered policies as defined
in Section 3425(a)(1) of the New York Insurance Law.
[*]2
Appropriate terms may be substituted to conform with terms used in
the policy.
[1]3
Language in this sentence should be used for SUM endorsements is-
sued with a combined single limit, in which case Condition 5 should
speak throughout in terms of a singular limit, rather than plural limits.
[2]4
Language in parentheses should be used for SUM endorsements issued
with split limits.
This notice is intended to serve only as a notice of emergency adoption.
This agency intends to adopt this emergency rule as a permanent rule and
will publish a notice of proposed rule making in the State Register at some
future date. The emergency rule will expire July 2, 2013.
Text of rule and any required statements and analyses may be obtained
from: Hoda Nairooz, New York State Department of Financial Services,
25 Beaver Street, New York, NY 10004, (212) 480-5595, email:
hoda.nairooz@dfs.ny.gov
Regulatory Impact Statement
1. Statutory authority: Sections 202 and 302 of the Financial Services
Law and Sections 301 and 3420 of the Insurance Law, Chapter 496 of the
Laws 2012 and Chapter 11 of the Laws of 2013. Financial Services Law
Sections 202 and 302 and Insurance Law Section 301 authorize the Super-
intendent of Financial Services (the “Superintendent”) to prescribe regula-
tions interpreting the provisions of the Insurance Law and to effectuate
any power granted to the Superintendent under the Insurance Law.
Insurance Law Section 3420 sets forth standard provisions that must be
included in all liability policies issued in this state. Insurance Law Section
3420(f)(2) requires motor vehicle liability insurers to provide, at the op-
tion of the insured, supplementary uninsured/underinsured motorists
(“SUM”) insurance coverage to all policyholders in New York State.
Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws of 2013
amended Insurance Law Section 3420 in relation to SUM coverage for
fire companies, ambulance services, volunteer fire departments and volun-
tary ambulance services.
2. Legislative objectives: Insurance Law Section 3420 sets forth the
minimum provisions that must be included in all liability policies issued in
this state to protect the rights of injured persons. On December 17, 2012,
Governor Andrew Cuomo signed Chapter 496 of the Laws of 2012, to
take effect on April 16, 2013. This bill amended Insurance Law Section
3420(f) pertaining to SUM coverage for fire companies, ambulance ser-
vices, and voluntary ambulance services. Subsequently, Chapter 11 of the
Laws of 2013 was enacted on March 15, 2013, also to take effect on April
16, 2013. It amended Chapter 496 to further clarify the SUM coverage for
employees and members of a fire department, fire company, ambulance
service or voluntary ambulance service. The law now requires that poli-
cies providing SUM coverage that are issued or renewed on or after April
16, 2013 include such coverage for members and employees of fire depart-
ments, fire companies, ambulance services or voluntary ambulance ser-
vices when the policy insures the fire department, fire company, ambulance
service or voluntary ambulance service.
3. Needs and benefits: Insurance Regulation 35-D implements Insur-
ance Law section 3420(f), which requires motor vehicle liability insurers
to provide, at the option of the insured, SUM coverage to all policyholders
in New York State. This amendment implements the provisions and
purposes of Chapter 496 of the Laws of 2012 and Chapter 11 of the Laws
of 2013 by amending the definition of “insured” in the prescribed SUM
endorsement contained in Insurance Law Section 60-2.3(f) to include
members and employees of a fire department, fire company, ambulance
service or voluntary ambulance service when the policy insures the fire
department, fire company, ambulance service or voluntary ambulance
service.
4. Costs: Motor vehicle insurers will incur some costs because they will
have to revise policy forms and send them to their insureds. However, this
is mandated by Chapter 496 of the Laws of 2012 and Chapter 11 of the
Laws of 2013.
This rule does not impose compliance costs on state or local
governments. The Department of Financial Services does not anticipate
that it will incur additional costs, although there will be an increased
number of filings. However, insurers must use the language prescribed in
the regulation and may not deviate from it.
5. Local government mandates: This rule does not impose any program,
service, duty or responsibility upon a city, town, village, school district or
fire district.
6. Paperwork: Insurance companies will have to submit appropriate
filings.
7. Duplication: This rule will not duplicate any existing state or federal
rule, but rather implement and conform to the federal requirements.
8. Alternatives: There are no alternatives to this amendment. The
changes to the rule are mandated by Chapter 496 of the Laws of 2012 and
Chapter 11 of the Laws of 2013.
9. Federal standards: There are no federal standards.
10. Compliance schedule: Pursuant to Chapter 496 of the Laws of 2012
and Chapter 11 of the Laws of 2013, all policies issued or renewed on or
after April 16, 2013 covering fire departments, fire companies, ambulance
services or voluntary ambulance services providing SUM coverage must
include the coverage for such employees and members.
Regulatory Flexibility Analysis
1. Small businesses: The Department of Financial Services (“Depart-
ment”) finds that this rule will not impose any adverse economic impact
on small businesses and will not impose any reporting, recordkeeping or
other compliance requirements on small businesses. The basis for this
finding is that this rule is directed at property/casualty insurance companies
licensed to do business in New York State, none of which falls within the
definition of “small business” as found in State Administrative Procedure
Act Section 102(8). The Department has monitored annual statements and
reports on examination of authorized property/casualty insurers subject to
this rule, and believes that none of the insurers falls within the definition
of “small business”, because there are none that are both independently
owned and have fewer than one hundred employees.
2. Local governments: The rule does not impose any impacts, including
any adverse impacts, or reporting, recordkeeping, or other compliance
requirements on any local governments. The basis for this finding is that
this rule is directed at property/casualty insurance companies, none of
which are local governments.
Rural Area Flexibility Analysis
The Department of Financial Services (“Department”) finds that this rule
does not impose any additional burden on persons located in rural areas,
and the Department finds that it will not have an adverse impact on rural
areas. This rule applies uniformly to regulated parties that do business in
both rural and non-rural areas of New York State.
Job Impact Statement
The Department of Financial Services finds that this rule should have no
impact on jobs and employment opportunities. The rule implements the
provisions and purposes of Chapter 496 of the Laws of 2012 and Chapter
11 of the Laws of 2013 amending the definition of “insured” to provide
coverage for members and employees of a fire department, fire company,
ambulance service or voluntary ambulance service when the named
insured is the fire department, fire company, ambulance service or volun-
tary ambulance service.
EMERGENCY
RULE MAKING
Excess Line Placements Governing Standard
I.D. No. DFS-17-13-00003-E
Filing No. 380
Filing Date: 2013-04-05
Effective Date: 2013-04-05
PURSUANT TO THE PROVISIONS OF THE State Administrative Pro-
cedure Act, NOTICE is hereby given of the following action:
Action taken: Amendment of Part 27 (Regulation 41) of Title 11 NYCRR.
Statutory authority: Insurance Law, arts. 21 and 59, sections 301, 316,
1213, 2101, 2104, 2105, 2110, 2116, 2117, 2118, 2121, 2122, 2130, 3103,
5907, 5909, 5911 and 9102; and Financial Services Law, sections 202 and
302; L. 1997, ch. 225; L. 2002, ch. 587; and L. 2011, ch. 61
Finding of necessity for emergency rule: Preservation of general welfare.
Specific reasons underlying the finding of necessity: This regulation
governs the placement of excess line insurance. Article 21 of the Insur-
ance Law and Regulation 41 enable consumers who are unable to obtain
NYS Register/April 24, 2013Rule Making Activities
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