A Twelfth Amendment to New York’s Insurance Regulation 41 was promulgated by the Department of Financial Services after the President signed the Nonadmitted and Reinsurance Reform Act (NRRA), which was Title V, Section I in the Dodd-Frank Wall Street Reform and Consumer Protection Act, 15 U.SC. 8201.
This amendment adopted most of the provisions of the NRRA on or about April 18, 2011. Like New York, most states incorporated, as amendments to their statutes or regulations, the provision in the NRRA that the primary regulator for eligible surplus line insurers (termed “excess line” insurers in New York) is the regulator in the state where the insured has its principal place of business. Further, most states adopted the NRRA’s prescribed $15 million minimum policyholders’ surplus for eligible surplus line insurers seeking to be, and remain, qualified (i.e., eligible) to write surplus line business in those states.
New York had other ideas and its Insurance Regulation 41 was amended so that the prescribed $15 million minimum policyholders’ surplus for eligible surplus line insurers seeking to be, and remain, qualified (i.e., eligible) to write excess line business in New York was, from the beginning, $45 million. However, a further provision was added, 11 N.Y.C.R.R. section 27.13 (b) (3) requiring that as of January 1, 2016, and every three years thereafter, the minimum policyholders’ surplus to become, and remain, eligible as an excess line insurer in New York , shall be increased by $1,000,000.
Thus, the Excess Line Association of New York (ELANY) released to the public on September 30, 2015 is a reminder (Bulletin No. 2015-16) that, effective January 1, 2016, all eligible insurers must maintain a minimum policyholders’ surplus of $46,000,000 to remain eligible in New York.