Permits a waiver of the diligent effort requirement in limited circumstances for certain insurance coverage to be placed by licensed excess line brokers with unauthorized insurers where a retail producing insurance broker seeks to procure or place commercial lines insurance through an unaffiliated wholesale excess line insurance broker.
Summary
S05310 would amend New York’s insurance law to create a limited waiver of the “diligent effort” requirement that normally applies when excess line brokers place coverage with unauthorized insurers. Under current law, a broker generally must certify that it tried and failed to obtain the needed coverage from authorized insurers before turning to the excess line market. The bill adds an exception for certain commercial lines placements when a retail producing insurance broker uses an unaffiliated wholesale excess line broker, allowing both brokers to be excused from making the otherwise required diligent-effort showing.
The bill also defines key terms used in the new exception, including “retail producing insurance broker,” “wholesale excess line insurance broker,” “commercial lines insurance,” and when brokers are considered “unaffiliated” based on ownership and control standards. It would take effect immediately, while preserving the existing expiration structure of the amended subsection.
Impact
The bill would modify Insurance Law section 2118, which governs excess line placements, by narrowing the circumstances in which brokers must document attempts to place coverage with admitted insurers before using unauthorized insurers. In practice, it would reduce paperwork and compliance burdens for certain commercial insurance transactions routed through unaffiliated retail and wholesale brokers, while leaving the broader excess line framework intact. The change would affect licensed insurance brokers, excess line brokers, commercial insureds seeking specialized coverage, and the Superintendent’s administration of the excess line market.
Sentiment
No committee transcript or recorded vote information was provided, so there is no direct evidence of debate or formal support/opposition in the available materials. Based on the bill text and caption, the measure appears to be a targeted industry process reform rather than a controversial substantive coverage mandate. The overall tone of the proposal is technical and permissive, aimed at easing placement procedures in a specific commercial insurance setting.
Contention
The main policy issue is whether exempting these placements from the diligent-effort requirement weakens the traditional preference for placing coverage with authorized insurers. Supporters would likely view the bill as a practical fix for commercial lines transactions involving separate retail and wholesale brokers, especially where the coverage is specialized or difficult to place. Potential critics may argue that the waiver could reduce documentation safeguards, make it easier to bypass admitted carriers, or create ambiguity about when the exception applies, particularly around the definitions of affiliation and control.
Same As
Permits a waiver of the diligent effort requirement in limited circumstances for certain insurance coverage to be placed by licensed excess line brokers with unauthorized insurers where a retail producing insurance broker seeks to procure or place commercial lines insurance through an unaffiliated wholesale excess line insurance broker.
Permits a waiver of the diligent effort requirement in limited circumstances for certain insurance coverage to be placed by licensed excess line brokers with unauthorized insurers where a retail producing insurance broker seeks to procure or place commercial lines insurance through an unaffiliated wholesale excess line insurance broker.
Enacts the "New York travel insurance act" regulating the licensing and registration of limited lines travel insurance producers and travel retailers, and the sale and marketing of travel insurance and related products.
Licensing and registration of limited lines travel insurance producers and travel retailers provided, and sale and regulation of travel insurance provided.