Relates to extending the exemption from filing requirements only with respect to rates and policy forms to out of state businesses

• Democratic2

◆ The sponsor's argument

Why Jamaal Bailey says this is needed

The Free Trade Zone (FTZ) is a useful tool for insurers that provides some flexibility from the usual rate and form filing process as it relates. to larger, sophisticated or highly specialized risks. Unfortu- nately, the FTZ fails to be utilized to its fullest potential because current law requires that, in order to be eligible to place a risk in the FTZ, the business must be underwritten and transacted from an office within New York State. This means that an insurer must maintain a phys- ical office location in the state, even though they are duly licensed to write in the NY admitted market. In the context of today's global econo- my, this requirement is unnecessary and fails to reflect advancements in technology and innovation. which makes it possible for business to be transacted from practically anywhere in the world. The intent of the FTZ is to allow greater freedom to insureds that are sophisticated enough to understand and negotiate their own insurance needs. They simply do not warrant the same level of protection from DFS as an individual consumer or small business. If an insured is sophisticated enough to assume responsibility for their own insurance needs (often working with risk managers, agents, or brokers), the location in which the policy is underwritten is irrelevant. In today's era of advancing technology and innovation, the most important factor for businesses is that they can readily access enhanced insurance products that keep pace with their evolving risks. The physical location where the insurance transaction occurs simply does not come into the equation. Additionally, the FTZ is beneficial because it makes it possible for authorized insurers to compete more effectively with the non-admitted market. However, the physical office requirement has just the opposite effect, penalizing authorized insurers who do not have a physical pres- ence and incentivizing them to enter the non-admitted market. The proposed. legislation will lead to a more dynamic and modernized regula- tory system that better reflects the current global financial services marketplace. This in turn will give businesses purchasing insurance a broader range of competitive price options and insurance products that can be readily customized to fit their company's risk profile.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.