N.Y. ISC. LAW § 3426 : NY Code - Section 3426: Commercial lines insurance; cancellation and renewal provisions

(a) Definitions. As used in this section:    (1) "Covered policy" means, for purposes of this section, a policy  of
  commercial  risk  insurance,  professional liability insurance or public
  entity insurance, and shall include any contract, certificate  or  other
  evidence of such insurance.
    (2) "Required  policy period" means a period of one year from the date
  as of which a covered policy is renewed or first issued.
    (3) "Nonpayment of premium" means the failure of the named insured  to
  discharge any obligation in connection with the payment of premiums on a
  policy  of  insurance  or  any  installment of such premium, whether the
  premium is payable directly to the insurer or its agent,  or  indirectly
  under  any  premium  finance plan or extension of credit. Payment to the
  insurer, or to an agent or broker authorized to  receive  such  payment,
  shall  be  timely for the purpose of this section if made within fifteen
  days after the mailing to the insured of a notice  of  cancellation  for
  nonpayment of premium.
    (4) "Renewal" or "to renew" means the issuance or offer to issue by an
  insurer of a policy superseding a policy previously issued and delivered
  by  the  same  insurer,  or another insurer under common control, or the
  issuance or delivery of a certificate or notice extending the term of  a
  policy  beyond  its  policy  period or term; provided, however, that any
  policy with a policy period or term of less than one year shall, for the
  purpose of this section, be considered as if written for a policy period
  or term of one year, and any policy with no fixed expiration date shall,
  for the purpose of  this  section,  be  considered  as  if  written  for
  successive policy periods or terms of one year.
    (5) "Administrative  suspension"  means  a  temporary  suspension of a
  driver's license pending a hearing, prosecution or investigation, or  an
  indefinite  suspension  of  a driver's license because of the failure of
  the person suspended  to  perform  an  act,  which  suspension  will  be
  terminated by the performance of the act by the person suspended.
    (6) "Excess  liability  policy"  means  a  policy  of commercial risk,
  public  entity  or  professional  liability   insurance,   including   a
  commercial  umbrella  policy,  when  written over one or more underlying
  liability policies that provide with respect to the same  risk  coverage
  of at least five hundred thousand dollars in the aggregate.
    (7) "Hyper  limits  excess liability policy" means an excess liability
  policy of commercial  risk,  public  entity  or  professional  liability
  insurance, including a commercial umbrella policy, when written over one
  or more underlying liability policies issued by authorized insurers that
  provide  with  respect to the same risk coverage of at least ten million
  dollars in the aggregate.
    (8) "Jumbo risk" means a business entity that generates gross revenues
  exceeding one hundred million dollars  annually  and  that  develops  an
  annual  liability  premium  for  the  policy  of  at  least five hundred
  thousand  dollars,  but  shall  not  include  any   public   entity   or
  not-for-profit corporation.
    (9) "Renewal  date"  means the date specified in a conditional renewal
  notice, renewal  certificate  or  in  the  renewal  policy  itself,  for
  coverage under a renewal policy to take effect.
    (10) "Blanket"  or  "mass"  nonrenewal  means  a  situation  where the
  insurer within a six month period is nonrenewing  policies  representing
  more than one percent of a market.
    (11) "Market"  shall  have  the  meaning  ascribed by paragraph one of
  subsection (a) of section two thousand three hundred forty-four of  this
  chapter.

    (b)  During  the  first  sixty  days  a covered policy is initially in
  effect, except for the bases for cancellation  set  forth  in  paragraph
  one,  two  or  three  of subsection (c) of this section, no cancellation
  shall become effective until twenty days after written notice is  mailed
  or  delivered to the first-named insured at the mailing address shown in
  the policy and to such insured's authorized agent or broker.
    (c) After a covered policy has been in effect for  sixty  days  unless
  cancelled pursuant to subsection (b) of this section, or on or after the
  effective  date  if  such policy is a renewal, no notice of cancellation
  shall become effective until fifteen days after written notice is mailed
  or delivered to the first-named insured and to such insured's authorized
  agent or broker, and such cancellation is based on one or  more  of  the
  following:
    (1) With respect to covered policies:
    (A)  nonpayment  of  premium  provided,  however,  that  a  notice  of
  cancellation on this ground shall inform the insured of the amount due;
    (B) conviction of a crime arising out of acts  increasing  the  hazard
  insured against;
    (C)  discovery of fraud or material misrepresentation in the obtaining
  of the policy or in the presentation of a claim thereunder;
    (D) after issuance of the policy  or  after  the  last  renewal  date,
  discovery of an act or omission, or a violation of any policy condition,
  that  substantially and materially increases the hazard insured against,
  and which occurred subsequent to inception of the current policy period;
    (E) material physical change in the property insured, occurring  after
  issuance  or  last  annual renewal anniversary date of the policy, which
  results in the property becoming  uninsurable  in  accordance  with  the
  insurer's  objective, uniformly applied underwriting standards in effect
  at the time the policy was issued or last renewed; or material change in
  the nature or extent of the  risk,  occurring  after  issuance  or  last
  annual  renewal anniversary date of the policy, which causes the risk of
  loss  to  be  substantially  and  materially   increased   beyond   that
  contemplated at the time the policy was issued or last renewed;
    (F)  a  determination  by  the superintendent that continuation of the
  present premium volume of the insurer would  jeopardize  that  insurer's
  solvency  or  be  hazardous  to  the  interests  of policyholders of the
  insurer, its creditors or the public;
    (G) a determination by the superintendent that the continuation of the
  policy would violate, or would place the insurer in  violation  of,  any
  provision of this chapter; or
    (H)  where  the  insurer has reason to believe, in good faith and with
  sufficient cause, that there is a  probable  risk  or  danger  that  the
  insured  will  destroy,  or permit to be destroyed, the insured property
  for the purpose of collecting the insurance proceeds, provided, however,
  that:
    (i) a notice of cancellation on this ground shall inform  the  insured
  in plain language that the insured must act within ten days if review by
  the  department  of  the  ground for cancellation is desired pursuant to
  item (iii) of this subparagraph (H);
    (ii)  notice  of  cancellation  on  this  ground  shall  be   provided
  simultaneously by the insurer to the department; and
    (iii)  upon  written  request  of  the  insured made to the department
  within ten days from the insured's receipt of notice of cancellation  on
  this  ground,  the department shall undertake a review of the ground for
  cancellation to determine whether or not the insurer has  satisfied  the
  criteria  for cancellation specified in this subparagraph; if after such
  review the department finds no sufficient cause for cancellation on this

  ground, the notice of cancellation on this ground shall be  deemed  null
  and void.
    (2)  With  respect to that portion of a covered policy providing motor
  vehicle coverage, in addition to the basis for cancellation set forth in
  paragraph one of this subsection, suspension or  revocation  during  the
  required  policy  period  of  the  driver's  license  of  any person who
  continues to operate a motor vehicle insured  under  the  policy,  other
  than  a  suspension  issued  pursuant to subdivision one of section five
  hundred  ten-b  of  the  vehicle  and  traffic  law  or  one   or   more
  administrative  suspensions  arising from the same incident which has or
  have been terminated prior to the effective date of cancellation.
    (3) With respect to  professional  liability  insurance  policies,  in
  addition  to  the  bases  for cancellation set forth in paragraph one of
  this subsection, revocation or suspension of the  insured's  license  to
  practice  his  profession or, if the insured is a hospital, it no longer
  possesses a  valid  operating  certificate  under  section  twenty-eight
  hundred one-a of the public health law.
    (4) With  respect  to  an  excess liability policy, in addition to the
  basis for cancellation set forth in paragraph one  of  this  subsection,
  cancellation of one or more of the underlying policies providing primary
  or  intermediate  coverage,  where:  (A) such cancellation is based upon
  paragraph one, two or three of this subsection; and  (B)  such  policies
  are not replaced without lapse.
    (5)  Written notice of cancellation in accordance with this subsection
  shall be mailed or delivered to the first-named insured, at the  address
  shown on the policy, and to the insured's authorized agent or broker.
    (d)  (1)  After a covered policy has been in effect for sixty days, or
  on and after the effective date if such policy is a renewal, no  premium
  increase  for  the  term of the policy shall be made to become effective
  unless due to and commensurate with insured value added,  subsequent  to
  issuance  or  the  last  renewal  date, pursuant to the policy or at the
  insured's request or, in lieu of cancellation, where  such  increase  is
  based  upon  one  or  more  of the grounds for cancellation set forth in
  subparagraph (D) or (E) of paragraph  one  of  subsection  (c)  of  this
  section.
    (2)  No  covered  policy which provides for a policy term of less than
  one year may be issued, or issued for delivery, in this state, except:
    (A) a policy issued to an insured for a seasonal purpose;
    (B) a policy issued to cover a specific event  or  particular  project
  that will be performed in less than one year;
    (C)  a new policy where the specific term is made to coincide with the
  term of an insured's already existing policy with the same insurer, with
  any insurer at the insured's written request  or,  in  the  case  of  an
  excess liability policy, with different insurers; or
    (D)  a group property/casualty policy or certificates, policies issued
  pursuant to a safety group or mass merchandising program, or  a  medical
  malpractice  or  for-hire vehicle policy whose expiration date is common
  to all other policies issued by an insurer; in any of which  events  the
  first  policy  period  may  be  for  a period of less than one year with
  subsequent renewals requiring at least a one year policy period, and any
  such policies issued since the effective date of  this  section  may  be
  amended to conform to a common expiration date.
    (e)  (1)  A  covered  policy  shall  remain  in  full force and effect
  pursuant to the same terms, conditions and rates unless  written  notice
  is mailed or delivered by the insurer to the first-named insured, at the
  address  shown  on the policy, and to such insured's authorized agent or
  broker, indicating the insurer's intention:
    (A) not to renew such policy; or

    (B) to condition its renewal upon change of limits, change in type  of
  coverage,  reduction  of  coverage,  increased deductible or addition of
  exclusion,  or  upon  increased  premiums  in  excess  of  ten   percent
  (exclusive  of  any  premium increase generated as a result of increased
  exposure  units,  pursuant  to  subsection  (d) of this section, or as a
  result of  experience  rating,  loss  rating,  retrospective  rating  or
  audit),  except  that  with  respect  to an excess liability policy, the
  insurer  may  also,  consistent  with  regulations  promulgated  by  the
  superintendent,  condition its renewal upon requirements relating to the
  underlying coverage, in which event the conditional renewal notice shall
  be treated as an effective notice of nonrenewal if such requirements are
  not satisfied as of the later of the expiration date of  the  policy  or
  sixty days after mailing or delivery of such notice; or
    (C)  that  the  policy will not be renewed or will not be renewed upon
  the same terms, conditions or rates;  such  alternative  renewal  notice
  must  be  mailed  or  delivered on a timely basis and advise the insured
  that a second notice shall be  mailed  or  delivered  at  a  later  date
  indicating  the  insurer's intention as specified in subparagraph (A) or
  (B) of this paragraph and that  coverage  shall  continue  on  the  same
  terms,  conditions  and rates as the expiring policy, until the later of
  the expiration date or sixty days after the second notice is  mailed  or
  delivered; such alternative renewal notice also shall advise the insured
  of  the  availability  of loss information pursuant to subsection (g) of
  this section and, upon written request, the insurer shall  furnish  such
  loss  information within ten days consistent with the provisions of such
  subsection.
    (2)  A  nonrenewal  notice  as  specified  in  subparagraph   (A),   a
  conditional  renewal  notice  as  specified in subparagraph (B), and the
  second notice described in subparagraph (C) of  paragraph  one  of  this
  subsection  shall  contain the specific reason or reasons for nonrenewal
  or conditional renewal, set forth the amount  of  any  premium  increase
  (or,  where  such  amount cannot reasonably be determined as of the time
  the notice is provided, a reasonable estimate of  the  premium  increase
  based  upon  the information available to the insurer at that time), and
  describe in plain and concise terms the nature  of  any  other  proposed
  changes   specified   in   paragraph   one   of   this  subsection.  The
  superintendent shall by regulation specify the permissible range of such
  estimate (which shall not exceed five percent of the actual amount)  and
  the  permissible  methods  by  which  an  insurer may satisfy the notice
  requirements of this section.
    (3) The notice required by paragraph one of this subsection  shall  be
  mailed  or  delivered  at  least  sixty,  but  not more than one hundred
  twenty, days in advance of the expiration date  of  the  policy,  except
  that  for an excess liability policy or a policy issued to a jumbo risk,
  the notice shall be mailed or delivered at least thirty,  but  not  more
  than  one  hundred twenty, days in advance of the expiration date of the
  policy.
    (4) Paragraphs one, two and three of this subsection shall  not  apply
  when  the  named  insured,  an  agent  or broker authorized by the named
  insured, or another insurer of the named insured has mailed or delivered
  written notice that the  policy  has  been  replaced  or  is  no  longer
  desired.
    (5)  (A)  If  the  insurer  employs  an  alternative renewal notice as
  authorized by subparagraph (C) of paragraph one of this subsection,  the
  insurer  shall provide coverage on the same terms, conditions, and rates
  as the expiring policy, until the later of the expiration date or  sixty
  days  after  the  mailing  or delivery of the second notice described in
  such subparagraph, except to the extent that, prior thereto, the insured

  has replaced the coverage or elects  to  cancel,  in  which  event  such
  cancellation shall be on a pro rata premium basis.
    (B)  In  the  event  that  a late conditional renewal notice or a late
  nonrenewal notice is provided by the insurer  prior  to  the  expiration
  date  of  the policy, coverage shall remain in effect, at the same terms
  and conditions of the expiring policy and at the lower  of  the  current
  rates or the prior period's rates, until sixty days after such notice is
  mailed  or  delivered,  except  to  the  extent that, prior thereto, the
  insured has replaced the coverage or elects to cancel,  in  which  event
  such  cancellation  shall  be  on  a  pro  rata premium basis; provided,
  however, that if the insured  elects  to  renew  on  the  basis  of  the
  conditional  renewal notice, then such terms, conditions and rates shall
  govern the policy upon expiration of such sixty day period  unless  such
  notice was provided at least thirty days prior to the expiration date of
  the  policy, in which event the terms, conditions and rates set forth in
  the conditional renewal notice shall apply as of the renewal date.
    (C) (i) In the event that a late conditional renewal notice or a  late
  nonrenewal  notice is provided by the insurer on or after the expiration
  date of the policy, coverage shall remain in effect on  the  same  terms
  and  conditions  of  the  expiring  policy  for  another required policy
  period, and at the lower of the current  rates  or  the  prior  period's
  rates  unless  the  insured during the additional required policy period
  has replaced the coverage or elects  to  cancel,  in  which  event  such
  cancellation shall be on a pro rata premium basis.
    (ii)  Every  notice  mailed  or  delivered pursuant to this subsection
  shall advise the insured of the insured's rights  to  coverage  and  the
  duration thereof.
    (6)  Paragraph  five  of this subsection shall not create a new annual
  aggregate liability limit (if any) for the covered policy,  except  that
  the  annual aggregate limit of the expiring policy shall be increased in
  proportion to the policy extension  pursuant  to  such  paragraph  five;
  provided,  however,  that  if  the  insured  elects to accept the terms,
  conditions and rates of  the  conditional  renewal  notice  pursuant  to
  subparagraph  (B)  of  paragraph  four  of this subsection, a new annual
  aggregate limitation (if any) shall become effective as of the inception
  date  of  the  renewal,  subject  to  regulations  promulgated  by   the
  superintendent.
    (7)  Each  insurer  subject  to this section shall adopt and implement
  reasonable standards  and  procedures  to  ensure  compliance  with  the
  provisions  of  subparagraphs  (A),  (B)  and  (C)  of paragraph one and
  paragraphs two and three of this subsection.  Each  such  insurer  shall
  maintain  a written or electronic record of any notice not in compliance
  with such provisions. Such record shall indicate the expiration date  of
  the  policy, the date notice should have been sent, the date when notice
  was sent, the policy number, and the name and address  of  the  insured.
  Such  records  shall  be  available  for  inspection upon request by the
  superintendent.
    (8) No insurer may issue blanket or mass nonrenewal  notices  for  any
  market,   except   upon  submission  to  the  superintendent,  at  least
  forty-five days in advance of mailing or delivery of such notices, of  a
  plan  for  orderly  withdrawal  that describes the proposed nonrenewals,
  states the basis for such nonrenewals, and identifies any measures  such
  insurer intends to take in order to minimize market disruption.
    (9) This subsection shall not apply to a hyper limits excess liability
  policy  except  in  regard  to  nonrenewal  or  to  a policy of the type
  specified in subparagraph (A) or (B) of paragraph two of subsection  (d)
  of this section.

    (f) If an insurer provides the notice described in paragraphs one, two
  and  three of subsection (e) of this section, and thereafter the insurer
  extends the policy for ninety days or  less,  an  additional  notice  of
  nonrenewal is not required with respect to the extension.
    (g)  (1)  Every  notice  mailed or delivered by an insurer pursuant to
  this section shall advise the first-named  insured  and  such  insured's
  authorized  agent  or  broker  of  the  availability of loss information
  consistent with paragraph two of this subsection.
    (2) Upon written request by the first-named insured or such  insured's
  authorized  agent  or  broker,  the  insurer  shall  mail or deliver the
  following loss information covering a period of years specified  by  the
  superintendent  by  regulation  or  the period of time coverage has been
  provided by the insurer, whichever is less,  within  ten  days  of  such
  request:
    (A)  Information  on  closed claims, including date and description of
  occurrence, and any payments;
    (B) Information on open claims,  including  date  and  description  of
  occurrence, and amounts of any payments; and
    (C)  Information  on  notice  of  any  occurrences, including date and
  description of occurrence.
    (3) The insurer may charge a  reasonable  fee  as  determined  by  the
  superintendent  only for such information provided upon request, but not
  for such information  (even  in  the  absence  of  a  request  therefor)
  required to be provided.
    (4)  For  purposes  of  this  subsection, the term first-named insured
  shall include an individual certificate holder under a property/casualty
  group policy with respect to such certificate holder's loss information.
    (h) Every notice of cancellation issued pursuant to this section shall
  specify the grounds for cancellation and shall contain where  applicable
  a reference to the pertinent paragraph or subparagraph of subsection (c)
  of  this  section.  Every  notice  of nonrenewal issued pursuant to this
  section shall set forth or be accompanied by the reason for  nonrenewal,
  and  any  such  stated  reason  shall be valid and effective unless such
  reason violates this chapter or any other state or federal law.
    (i) No cancellation, conditional renewal  or  nonrenewal  notice  that
  fails  to  include  a  provision  required  by  this section shall be an
  effective notice for purposes of this section.
    (j) The provisions  of  subsection  (e)  of  this  section,  regarding
  conditional   renewal  shall  apply  to  the  master  contract  under  a
  property/casualty group  policy,  but  shall  not  apply  to  individual
  certificate holders under such group policy.
    (k)  (1)  Subject  to  the  rights  of  an  insurer to cancel a policy
  pursuant to subsection (b) or (c) of this section, in the event that  an
  insurer  terminates  the  contract  or  account  of  a licensed agent or
  broker, the insurer shall offer in regard to any policy written  through
  such  terminated  agent or broker to continue each such policy with that
  agent or broker for any remaining part of the required policy period.
    (2) The terminated agent  or  broker  shall  be  entitled  to  receive
  commissions  on all business continued pursuant to paragraph one of this
  subsection at the commission rate applicable to such agent or broker  at
  the time of termination.
    (3)  This  subsection  shall  not apply to an agent or broker: (A) who
  exclusively represents one insurer or a group of insurers  under  common
  management; (B) whose license has been revoked by the superintendent; or
  (C)  whose contract or account has been terminated due to the agent's or
  broker's insolvency or gross misconduct.
    (l) (1) This section shall apply to any policy issued  or  issued  for
  delivery  in this state covering risks with multi-state locations, where

  the insured is principally headquartered in  this  state  or  where  the
  policy  provides  that this section, as a matter of choice of law, is to
  govern the policy in regard to such locations.
    (2) This section shall not apply to policies issued pursuant to a plan
  established  under article fifty-three, fifty-four or fifty-five of this
  chapter, surety policies, policies providing  workers'  compensation  or
  employers'  liability  coverage,  financial guaranty insurance, policies
  providing mortgage guaranty or credit  insurance,  policies  principally
  marine  insurance  as  defined  by paragraph twenty of subsection (a) of
  section one  thousand  one  hundred  thirteen  of  this  chapter,  legal
  services insurance, reinsurance contracts, policies written on an excess
  line  basis,  or policies subject to section three thousand four hundred
  twenty-five of this chapter.
    (m) Nothing in this section shall be construed to prohibit an  insurer
  from  providing  terms  more  favorable  to an insured or other party in
  interest with regard to cancellation, nonrenewal or conditional renewal;
  nor shall anything herein be construed to limit the grounds for which an
  insurer may lawfully rescind or suspend a policy or  decline  to  pay  a
  claim under a policy.
    (n)  (1)  Except  for  subparagraphs (B) and (C) of paragraph five and
  paragraph seven of subsection (e), an insurer  doing  business  in  this
  state  which  violates  the  provisions  of  subsection  (e)  with  such
  frequency as to indicate a general business practice shall be subject to
  the penalties provided in paragraph two of this subsection.
    (2) If it is found, after notice and an opportunity to be heard,  that
  an insurer has violated subsection (e) of this section, each instance of
  noncompliance  with paragraph one of this subsection may be treated as a
  separate violation of this section for purposes of  ordering  a  penalty
  pursuant to section one hundred nine of this chapter.
    (o)  The  provisions  of subsections (e) and (h) of this section shall
  not apply to a policy the  term  of  which  expires  during  the  period
  commencing  with  the original effective date of this section and ending
  on the sixtieth day after such effective date, provided,  however,  that
  in  the  interim  the  provisions of former sections three thousand four
  hundred twenty-six and three thousand four hundred twenty-seven of  this
  article as in effect on the day preceding the original effective date of
  this  section  shall  apply,  as if such sections were not repealed by a
  chapter of the laws of nineteen hundred eighty-six, but in the event any
  such policy is at any time reexecuted,  renewed,  altered,  modified  or
  amended, such provisions shall apply to such policy.