Excess line brokers should be aware that New York Insurance Law imposes specific requirements on licensed/authorized insurers when they issue policies containing defense within limits offset provisions. These requirements are set forth in 11 CRR-NY Part 71 (Regulation 107).
EXCESS LINE TRANSACTIONS ARE EXEMPT FROM THIS REGULATION WITH TWO EXCEPTIONS.
11 CRR-NY 27.10 (Regulation 41) expressly provides that excess line group transportation network policies and peer to peer car sharing programs are subject to the claims made requirements of Regulation 107.
It is important to know the terms and conditions of the actual policy, as those terms and conditions will control what duties the insurer has contractually with respect to defense within limits offset provisions. It is very important to obtain the policy language as early as possible in any defense within limits transaction and to analyze the differences between the excess line policy and the requirements that would otherwise apply under Regulation 107 so that these differences can be adequately explained to the insured or any representative of the insured.
Regulation 41 also requires that excess line brokers maintain a complete copy of any liability policy produced by that excess line broker that does not provide unlimited legal defense costs outside the limits.
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ELANY DISCLAIMER:
This is not intended to be nor should it be construed as legal advice. Consult with your own legal counsel.
Last Revised: 01/10/2025