New York P&C Study Guide

New York P&C is its own world. It is the largest market in the country, it runs auto on a no-fault basis, it bolts two extra benefit programmes onto workers’ compensation that exist almost nowhere else, and it handles insurer insolvency through a state-run fund rather than the guaranty association every other state taught you about. There is more New York-only material on this exam than on almost any other state’s — which is precisely why the state-law portion is winnable.

The regulator, and one correction about rates

Insurance here sits inside the Department of Financial Services, a single agency covering insurance, banking and financial services since the 2011 merger, headed by a Superintendent appointed by the Governor with Senate consent. The law is codified in the New York Insurance Law, with regulations in Title 11 of the NYCRR.

On rate regulation, resist the tidy answer. It is widely repeated that New York is a prior-approval state, full stop. That is true of private-passenger motor-vehicle rates — which are deemed approved if the Superintendent does not disapprove them within 30 days, a clock he may extend with cause by a further 30 and then 15 days — but most other property/casualty lines run on a no-prior-approval, file-and-use basis under § 2305.

Workers’ compensation — no threshold at all

Nearly every state sets a numeric floor before workers’ compensation becomes mandatory: three employees, four, five. New York sets none. Coverage is required from the first employee, part-time included, for virtually every employer (WCL §§ 10 and 50), enforced by the Workers’ Compensation Board with penalties and stop-work orders behind it.

Wage replacement is two-thirds of the worker’s average weekly wage, multiplied by the percentage of disability, subject to a statewide maximum reset each 1 July at two-thirds of the New York State Average Weekly Wage. An employer may comply in three ways: buy from a private carrier, buy from the New York State Insurance Fund (NYSIF), or qualify as an approved self-insurer with a security deposit.

DBL and PFL — the New York extras

This is where New York genuinely stands apart, and where the exam most likes to blur things. Alongside workers’ compensation, New York separately mandates:

• DBL (Disability Benefits Law) — short-term disability coverage for off-the-job illness and injury. Nothing to do with workers’ compensation.
• Paid Family Leave (PFL) — paid leave for births, adoptions, family caregiving and certain military events.

Property — the residual market and the coast

The insurer of last resort is the New York Property Insurance Underwriting Association (NYPIUA) — the FAIR Plan, under Article 54. There is no separate coastal windstorm insurer the way Texas and Florida have one; instead the Coastal Market Assistance Program (C-MAP) operates as a referral programme through NYPIUA, helping shore-area homeowners find voluntary coverage. The dominant catastrophe perils are coastal windstorm and hurricane on Long Island and the downstate coast, nor’easters and severe winter storms, and inland and coastal flooding.

Credit scoring in personal lines is permitted but restricted: an insurer may not take adverse action on credit alone, and may not use income, gender, race, religion, marital status, ZIP code, nationality, or the absence of a credit history. Scoring models must be filed with DFS at least 45 days before use.

Insolvency — a security fund, not a guaranty association

Most states protect P&C policyholders through an independent guaranty association funded by member assessments. New York does not. It runs a state-administered Property/Casualty Insurance Security Fund through the Liquidation Bureau, capped at $1,000,000 per claim (§ 7603), with no payment at all to anyone owning or controlling 10% or more of the failed insurer. A separate Public Motor Vehicle Liability Security Fund covers for-hire and public-vehicle claims.

Excess line — New York’s name for surplus lines

New York calls it excess line, and it requires a separate Excess Line Broker licence on top of a property/casualty broker licence. Before a risk may go to an unauthorised insurer, § 2118(b) requires a diligent effort — defined in the statute as three declinations from authorised insurers — plus an affidavit affirmed under penalty of perjury. Within 45 days of procuring the policy, the broker files the declarations page or cover note with ELANY, the Excess Line Association of New York.