NEW YORK INSURANCE DEPARTMENT SEEKS COMMENTS ON FIRST SUPPLEMENT TO CIRCULAR LETTER NO. 20
In October 2008, the New York Insurance Department issued Circular Letter No. 20 to address the topic of contract certainty in reinsurance contracts (as noted in our November 11, 2008 post). In its first draft supplement to the circular letter, the Department proposes further guidance on the subject in response to inquiries by interested persons. Initially, the definition of “promptly” in the context of delivering policy documentation would be construed to mean “within 30 business days.” Next, the draft supplement suggests the Department will ensure compliance with the Circular Letter on a case-by-case basis, depending on the “unique nature or size of the risk.” It also clarifies that the Department will employ principles of contract certainty in effect in the United Kingdom and Bermuda as standards for what constitutes adequate “policy documentation.” Finally, the 30-day period for achieving contract certainty would be allocated as follows: where a producer intermediates a transaction, the insurer should deliver policy terms and conditions within 18 business days post-inception. The broker then would have 12 business days to deliver the contract to the policyholder. The deadline for submitting public comments on this draft supplement is January 22, 2010.
This post written by Brian Perryman.
