New York Laws
Article 23 - Property/casualty Insurance Rates
2344 - Flexible Rate Limitations in Problem Markets.

(1) "Market" means a line, subline or classification (other than a
classification delineated by geographic location) of property/casualty
insurance risks whose coverages are not subject to subsection (b) of
section two thousand three hundred five, section two thousand three
hundred twenty-eight, section three thousand four hundred twenty-five,
or three thousand four hundred forty-six of this chapter.
(2) "Rate" means charge per unit of exposure (whether such rate is
manually generated or based upon judgment) for a particular market.
(b) The superintendent shall by regulation establish annual
limitations upon rate level increases or decreases which may take effect
without prior approval with respect to a market. The regulation shall be
designed to restore and promote stability in such markets. Upon a
determination made that, as to a particular market, competition is
either sufficient to assure that rates will not be excessive or that
such market is conducted in a manner not resulting in inadequate rates,
not destructive of competition or detrimental to the solvency of
insurers, the superintendent shall exempt such market from the
limitations set forth in such regulation. The superintendent, upon a
determination that annual limitations are necessary to restore and
promote stability in such a market, shall thereafter withdraw or modify
such exemption. The superintendent shall whenever he deems it
appropriate hold a hearing, on a record and at which representatives of
consumers and other interested parties may participate, for the purpose
of determining, on the basis of findings of fact and conclusions,
whether an exemption (or withdrawal or modification thereof) of any
market is appropriate. The initial hearing for such purpose shall be
held within sixty days of the effective date of this section, and the
superintendent shall act expeditiously in determining whether to exempt
any market.
(c) Limitations established or modified pursuant to subsection (b) of
this section may vary by market and, in establishing or modifying such
limitations, the superintendent may consider such factors as: the extent
and nature of competition; size and significance of the coverage; level
and range of rates and rate changes among insurers; investment and
underwriting experience of insurers; reinsurance availability; extent of
consumer complaints to the department of financial services; extent of
denials and restrictions of coverage; volume of cancellations and
nonrenewals; or changing conditions in the economic, judicial and social
environment.
(d) (1) Notwithstanding any other provisions of this article, in any
market governed by such regulation and not exempted by the
superintendent pursuant to this section, filings that produce rate level
changes within the limitations specified in such regulation shall become
effective without prior approval pursuant to subsection (a) of section
two thousand three hundred five of this article; filings which produce
rate level changes beyond such limitations shall not become effective
until approved by the superintendent pursuant to subsection (b) of
section two thousand three hundred five of this article, except that
filings shall be deemed approved unless disapproved by the
superintendent within thirty days, which the superintendent may with
cause extend an additional thirty days and with further cause extend an
additional fifteen days.
(2) No insurer shall cause an expiring policy to be renewed with
another insurer under common control, as defined by paragraph sixteen of
subsection (a) of section one hundred seven of this chapter in order to
avoid the limitations established by this section. An insurer may renew

an expiring policy with another insurer under common control based upon
underwriting criteria or other valid business reasons.
(e) The superintendent shall by regulation establish reasonable
standards for rating plans (including experience rating plans, schedule
rating plans, individual risk premium modification plans and expense
reduction plans) designed to modify rates in the development of premiums
for individual risks insured in a property/casualty market. Such
standards shall permit recognition of expected differences in loss or
expense characteristics, and shall be designed so that such plans are
reasonable and equitable in their application, and are not unfairly
discriminatory, violative of public policy or otherwise contrary to the
best interests of the people of this state. Such standards shall not
prevent the development of new or innovative rating methods which
otherwise comply with this article. Such rating plans shall be filed or
refiled by insurers in compliance with the regulation. The
superintendent shall review such plans, and may without a hearing
disapprove a plan that does not comply with the regulation. The
regulation shall establish maximum debits and credits that may result
from the application of a rating plan, shall encourage loss control,
safety programs and other methods of risk management, and shall require
insurers to maintain documentation of the basis for the debits or
credits applied under any plan. Once it has been filed and approved, use
of the rating plan shall become mandatory and such plan shall be applied
uniformly for eligible risks in a manner that is not unfairly
discriminatory.
(f) The superintendent shall review all rates filed between June
first, nineteen hundred eighty-six, and the effective date of the
regulation promulgated pursuant to subsection (b) of this section, and
shall, on a selective basis, review rates established prior to June
first, nineteen hundred eighty-six, including rates not manually rated,
to determine whether they comply with the applicable standards
prescribed by this article for purposes of the annual limitations
established or modified pursuant to subsection (b) of this section. In
establishing priorities for such selective review, the superintendent
shall give consideration to markets which have been subject to the
largest rate changes in the twelve month period prior to June first,
nineteen hundred eighty-six and to markets affecting the greatest number
of risks; the superintendent shall to the extent material also give
consideration to the criteria set forth in subsection (c) of this
section. In addition, the superintendent shall to the fullest extent
possible review markets not manually rated, for the purpose of
determining whether a manual rate is appropriate and shall, upon a
determination of appropriateness, require that a manual rate be
developed for such market. If the superintendent determines that the
reviewed rate pursuant to the mandatory or selective review specified by
this subsection does not comply with the applicable standards prescribed
by this article, the insurer shall be afforded an opportunity to be
heard and shall file in accordance with such determination prospective
rates applicable to new and renewal policies. Except as to the
procedures set forth in this subsection, nothing contained in this
subsection shall be construed to alter, limit, modify, enlarge or
abrogate any right of any insurer or any power or authority of the
superintendent under any other provision of this chapter.
(g) (1) Within ninety days after the effective date of this section
every insurer licensed to write property/casualty coverages in regard to
a market not exempted pursuant to subsection (b) of this section and
affected by the statutory provisions specified in this paragraph shall
file with the superintendent rates, for each such market written by the

insurer, appropriately modified to reflect the likely reductive cost
effects reasonably attributable to any newly enacted statutory
provisions of the civil practice law and rules, court of claims act and
not-for-profit corporation law. Such filings shall contain a specific
explanation of the reductive cost effects (which shall also be expressed
in amounts or percentages) ascribed to such statutory provisions, in a
form prescribed by the superintendent. In regard to a market not subject
to this section or exempted pursuant to this section, subsequent filings
shall reflect likely reductive cost effects reasonably attributable to
such statutory provisions appropriate to such market.
(2) The superintendent shall determine whether the rates filed
pursuant to paragraph one of this subsection reasonably reflect the
likely reductive cost effects attributable to the statutory provisions
specified in paragraph one of this subsection.
(3) In the event that the superintendent determines that the likely
reductive cost effects are not properly reflected in such rates, the
basis for such determination shall be stated and, within thirty days
after receipt of such determination, the affected insurer may request a
hearing. All policies written or renewed on or after the effective date
of the statutory provisions specified in paragraph one of this
subsection shall be subject to appropriate premium adjustments in the
event the superintendent's determination is sustained, and the insurer
shall maintain its records in regard to each such policy for a period of
no less than six years in order to verify that appropriate adjustments
have been made.
(4) For purposes of the annual limitations established pursuant to
subsection (b) of this section, the rates determined by the
superintendent to reasonably reflect the likely reductive cost effects
of the provisions specified in paragraph one of this subsection shall be
treated as if they had been in effect for the twelve month period prior
to the date of such determination.
(h) This section shall cease to be of any force or effect during the
period August third, two thousand one through the day before the
effective date of the property/casualty insurance availability act, and
after June thirtieth, two thousand twenty-six, except that rates shall
reflect the likely reductive cost effects reasonably attributable to the
statutory provisions specified in paragraph one of subsection (g) of
this section.
* NB Expires July 1, 2026

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