5402 - Joint underwriting association.

§  5402.  Joint  underwriting  association. (a) The joint underwriting  association known  as  the  New  York  property  insurance  underwriting  association is continued, consisting of all insurers authorized to write  and  engaged  in  writing within this state, on a direct basis, fire and  extended coverage insurance, including insurers covering such perils  in  homeowners  and commercial multiple peril package policies but excluding  assessment cooperative fire  insurance  companies  transacting  business  pursuant  to article sixty-six of this chapter. Every such insurer shall  be and remain a  member  of  the  association  as  a  condition  of  its  authority to continue to transact fire, extended coverage and homeowners  insurance in this state.    (b)  The  association  shall  be  governed  by  a  board  of  thirteen  directors, ten of whom shall be elected annually by cumulative voting by  the members of the association, whose votes in such  election  shall  be  weighted  in  accordance  with each member's net direct premiums written  during the preceding calendar year. The remaining three directors  shall  be  appointed  annually  by  the  superintendent  and  be  duly licensed  insurance agents or brokers representative  of  broad  segments  of  the  public obtaining insurance through the association.    (c)  The association shall, pursuant to the provisions of this article  and the plan of operation and with respect to fire  insurance,  extended  coverage,  broad form coverage issued pursuant to subsection (g) of this  section, coverage for additional perils, and homeowners insurance should  the same be made available through the association in accordance with  a  determination  of  necessity  made  by  the  superintendent  pursuant to  section five thousand four hundred twelve of this article  on  insurable  property, have the power on behalf of its members:    (i) to cause policies of insurance to be issued to applicants;    (ii) to assume reinsurance from its members; and    (iii) to cede reinsurance.    (d)  The  association  shall adhere to a plan of operation, consistent  with the provisions of this  article,  approved  by  the  superintendent  after consultation with affected individuals and organizations. The plan  shall provide for economical, fair and non-discriminatory administration  and  prompt  and  efficient  provision of fire, extended coverage, broad  form coverage pursuant to subsection (g) of this section and  homeowners  insurance,   when   a   determination   of  necessity  is  made  by  the  superintendent pursuant to section five thousand four hundred twelve  of  this  article to promote orderly community development. It shall contain  other matters including, but not limited  to,  provision  for  necessary  facilities;  management  of  the  association;  assessment of members to  defray losses and  expenses;  commission  arrangements;  reasonable  and  objective  underwriting standards; acceptance and cession of reinsurance  and procedures for determining amounts of insurance to  be  provided  by  the  association. The amounts shall not be in excess of one million five  hundred thousand dollars for the insurable real property or the tangible  personal property thereon.    (e) The directors of the association may, on their own  initiative  or  at the request of the superintendent, amend the plan subject to approval  by the superintendent.    (f)  The  association  shall offer homeowners insurance, as defined in  subsection (h) of section five thousand four hundred one of this article  upon a determination of necessity having been made by the superintendent  pursuant to section five thousand four hundred twelve of this article.    (g) In addition to fire insurance,  extended  coverage,  coverage  for  additional  perils  and  homeowners  insurance  should  the same be made  available through the association in accordance with a determination  of  necessity  pursuant to section five thousand four hundred twelve of thisarticle, the association may offer broad  form  coverage  to  applicants  seeking to insure real property at fixed locations of this state, or the  tangible  personal  property  located thereon. The association may offer  broad  form coverage for a period of five years after the effective date  of this subsection. The superintendent shall require the association  to  report  to  him  or  her annually during that five-year period as to the  number of policies written pursuant to  this  subsection  and  paragraph  three  of  subsection  (f) of section five thousand four hundred five of  this article in  the  previous  year,  and  any  other  information  the  superintendent  may require. The superintendent shall then report to the  governor and the legislature regarding the  number  of  policies  issued  pursuant  to  this  subsection and such paragraph annually for the first  four years such coverage is offered. On or  before  January  first,  two  thousand  thirteen,  the  superintendent  shall make a final, cumulative  report  to  the  governor  and  the  legislature  which  shall   include  recommendations as to the continuation of such insurance offerings.    (i) Not less than once every thirty days, the association shall report  to  the  superintendent,  the speaker of the assembly, and the temporary  president of the senate on the number, location  and  type  of  policies  written through a coastal market assistance program.