Procedures Manual
Table of Contents
Section XII - PLAN OF OPERATION
Article 1 - Name and Organization
The name of the association is the Excess Line Association of New York (hereinafter the Association). The Association is a non-profit association created pursuant to Chapter 630 of the Laws of 1988.
Article 2 - Plan of Operation
The Association shall perform its functions under this plan of operation (hereinafter the Plan) and in accordance with the New York Insurance Law (hereinafter the NYIL). This plan shall become effective upon the written approval of the New York Superintendent of Financial Services.
Article 3 - Membership
A. Members
Any corporation, partnership or individual licensed as an excess line broker under §2105 of the NYIL shall be deemed a member of the Association. Members that are organized as corporations or partnerships shall provide the Association, in writing, with the name of an officer, partner or employee who shall be authorized to exercise all powers, rights, and responsibilities of those members including, but not limited to, the rights to vote and to serve as a director.
B. Voting
Each member shall have one vote provided, however, the Association may, in the future, submit a voting system to the Superintendent of Financial Services for approval, which system may weigh each members vote to reflect the annual excess line insurance premium written by that member. Any person who is named a licensee and/or sublicensee on more than one excess line license is prohibited from casting more than one vote: 1) as a member in any election; and 2) as an active member in any nominating petition.
C. Annual Meeting
There shall be an annual meeting of members which shall take place in the month of May at a location in New York State to be designated by the Board of Directors unless the Board, upon proper notice, shall designate some other time. Twenty days written notice of such annual meeting shall be given to all members. Such notice shall incorporate, or be accompanied by, an agenda for the meeting. Members may be present in person or represented by an individual designated by the member for that purpose (member designee). The members present in person or represented by members designees shall constitute a quorum for the transaction of business. The acts of a majority of the membership present in person or represented by members designees at a meeting at which a quorum is present shall be the acts of the full membership.
The annual meeting shall be held in person unless the Board of Directors determines that an in person meeting is impossible or impractical due to an emergency declared by a governmental authority. Upon such determination, the Board of Directors may authorize and conduct a virtual meeting by means of a conference telephone, video conference or similar electronic means provided that all members and other attendees participating in such virtual meeting are able to hear each other at the same time. Every member and member representative who acknowledges their presence at the virtual meeting shall be deemed present for all purposes permitted by the Plan of Operation. The meeting shall be held under the same rules and procedures as a meeting held in person. The record of a virtual meeting shall be held open for 30 days for submission of additional comments by members and member representatives.
Article 4 - Directors
A. Board of Directors
The management of all the affairs, property and business of the Association shall be vested in the Board of Directors, and such Board shall consist of not less than five (5) nor more than nine (9) persons, all of whom shall be members or are officers, partners or employees of a member who have been authorized to act for the member pursuant to Article 3. The Board of Directors (other than the interim board appointed by the Superintendent of Financial Services and the first elected Board of Directors) shall be elected at the annual meeting of members to serve three-year, non-concurrent terms. The first elected members of the Board of Directors, the election of Directors at the annual meeting of members in 1992 will provide for the election of three members to serve a one-year term, three members to serve a two-year term and three members to serve a three-year term. Directors shall serve until their successors are duly elected, unless removed for cause as provided in Section D below.
B. Elections
The Chairman of the Board shall appoint a nominating committee, subject to approval of the Board of Directors, at least 90 days before the annual meeting to nominate active members to fill the expiring terms of directors. The recommendations of the nominating committee shall be announced at least 60 days before the annual meeting, and active members shall be given 10 days after such announcement to make additional nominations of active members who have signified their willingness to stand for election by petition supported by no less than 40 active members. An active member is defined as an excess line broker or full-time employee, officer or director of an excess line broker which has procured excess line insurance for insureds whose home state is New York in each of the three consecutive calendar years prior to the calendar year in which the nomination is made. Ballots shall be mailed to members at least 30 days prior to the annual meeting indicating the nominations by the nominating committee and any additional nominations by petition. The result of the election shall be counted the day prior to the annual meeting by tellers appointed by the Board.
C. Vacancies
Any vacancy occurring on the Board of Directors by reason of death, resignation or otherwise, may be filled at a regular or special meeting of the Board of Directors for a period of time up to the next annual meeting of members.
D. Removal for Cause
A director may be removed from the Board by the Superintendent for cause, stated in writing, after an opportunity has been given to the director to be heard.
E. Actions
A majority of the Board of Directors shall constitute a quorum for the transaction of business. The acts of a majority of the directors present at a meeting at which a quorum is present shall be the acts of the Board, except that an affirmative vote of a majority of directors, whether or not present at a meeting, is required to:
hire or dismiss an executive director;
remove any officer;
approve contracts with an annual obligation of $50,000 or more;
adopt a schedule for stamping fees;
borrow money;
propose amendments to this Plan; and
authorize a bank signatory.
When such issues are presented to the directors at any annual, regular or special meeting, those directors absent from such meeting may be polled by the Chairman on such issues by telephone. Any vote cast by an absentee director on such issues by telephone shall be as valid as though such absentee director was in fact present at the meeting for purposes of determining whether a quorum is present and voting. Votes cast in this manner shall be subsequently confirmed in writing by letter such absentee director to the Chairman within fourteen days.
F. Directors Annual Meeting
An annual meeting of the Board of Directors shall be held at the Associations office or such other place within the state of New York designated by the Board of Directors as soon as possible after the annual meeting of members.
The annual meeting shall be held in person unless the Chairman determines that an in person meeting is impossible or impractical due to an emergency declared by a governmental authority. Upon such determination, the Chairman may authorize and conduct a virtual meeting by means of a conference telephone, video conference or similar electronic means provided that all members and other attendees participating in such virtual meeting are able to hear each other at the same time. The meeting shall be held under the same rules and procedures as a meeting held in person.
At each directors annual meeting the Board shall:
1. elect officers;
2. review this Plan and propose amendments, if any;
3. review operating expenses and the schedule of fees; and
3. review, consider and act on any other matters deemed by it to be necessary to the administration and purposes of the Association.
G. Regular and Special Meetings
Regular meetings of the Board of Directors shall be held at least quarterly. The Chairman shall designate the date, time and place within the state of New York of such regular meetings and may cancel or postpone any regular meeting when in the Chairmans judgment such cancellation or postponement will not interfere with the business of the Association. Special meetings of the Board of Directors may be called by the Chairman and shall be called at the request of any three directors or upon the written petition of members who, collectively, account for not less than fifty percent (50%) of the vote as provided for in Article 3, Section B of the Plan, upon not less than five (5) days written notice to each director of the time and place and purpose or purposes of any special meeting. Special meetings shall be held within the state of New York except as otherwise expressly provided for by the Board of Directors. Such notice for any special meeting may be waived by written consent signed by all the directors before or after such meeting. At any regular or special meeting, the directors may consider and decide any matter deemed by them to be necessary for the administration of the Association.
H. Consent
Any action which may be taken at an annual, regular or special meeting of the Board may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all the directors entitled to vote at a meeting. Any such consent signed by all the directors shall have the same effect as a unanimous vote.
I. Compensation; Reimbursement
Directors shall serve without compensation, but they may be reimbursed for reasonable and necessary expenses incurred by them as members of the Board of Directors.
Article 5 - Officers
A. Officers
The officers of the Association to be elected by the Board of Directors shall be a Chairman, a Vice-Chairman, a Treasurer and a Secretary. Officers shall be members of the Board of Directors. They shall be elected at the Board of Directors annual meeting and shall hold office until the next Board of Directors annual meeting or until their successors are elected and installed.
B. Chairman
It shall be the duty of the Chairman to preside at all meetings and to perform all duties usually pertaining to his office. The Chairman shall serve no more than three consecutive terms in office.
C. Vice-Chairman
It shall be the duty of the Vice-Chairman to perform all the duties of the Chairman during the absence of the chairman.
D. Secretary
It shall be the duty of the Secretary to keep full minutes of the proceedings of all meetings of the Association and of the Board of Directors, and to perform all duties usually pertaining to his or her office or as may be assigned by the Board of Directors.
E. Treasurer
It shall be the duty of the Treasurer to report at the annual meeting of members the account of the funds of the Association and of all receipts and disbursements, and to perform all duties usually pertaining to his or her office or as may be assigned by the Board of Directors.
F. Assistant Secretary
It shall be the duty of the Assistant Secretary to perform all duties usually pertaining to his or her office in the absence of the Secretary, or such duties as may be assigned by the Board of Directors.
G. Immediate Past Chairman
Upon expiration of his or her term as Chairman of the Board of Directors, such Chairman shall automatically assume the position of Immediate Past Chairman and step down as a member of the Board of Directors, whether or not his or her term has expired. It shall be the duty of the Immediate Past Chairman to preside over the Associations Nominating Committee. The Immediate Past Chairman shall also serve as an ex officio member of the Board of Directors, and shall have such other duties as may be assigned by the Board of Directors. The term of the Immediate Past Chairman shall run for one year, unless the Chairmans term runs longer, in which case the term shall run contemporaneously with the term of the current Chairman of the Board of Directors.
H. Removal
Any officer may be removed with or without cause by the Board of Directors as provided in Article 4.
I. Vacancies
Any vacancy of officers of the Association may be filled by the Board of Directors at any regular or special meeting, and in case of the absence or temporary disability of any officer, the Board may designate an incumbent for the time being, who shall, during such incumbency, have the powers of such officer.
Article 6 - Executive Director
The Executive Director shall be the chief operating officer of the Association. It shall be the duty of the Executive Director to implement the policies of the Board of Directors. The Executive Director may be dismissed with or without cause as provided for in Article 4.
Article 7 - Committees
A. Committees of the Board of Directors
The Board of Directors, by resolution or resolutions, may designate one or more committees of the Board. Each committee so designated shall consist of three (3) or more directors of the Association, and to the extent provided in said resolution or resolutions, shall have and may exercise the powers of the Board of Directors in the interim between meetings of the Board. A majority of the members of a committee of the Board shall constitute a quorum for the transaction of business. The acts of a majority of the members of a committee present at a meeting at which a quorum is present shall be the acts of the committee. Any action taken by a committee in the interim between meetings of the Board shall be subject to ratification by the Board at its next meeting. Such committee or committees shall have such name or names as may be determined from time to time by the resolution or resolutions adopted by the Board of Directors. The existence of any such committee may be terminated, or its powers and authority modified, at any time by resolution of the Board of Directors. The Board of Directors may provide by resolution for the payment of reasonable and necessary expenses to the members of such committees for attendance at the meeting thereof. Meetings of any committee of the Board of Directors shall be held within the state of New York except as otherwise expressly provided for by the Board of Directors.
B. Committees of the Association
The Board of Directors, by resolution or resolutions, may designate one or more committees of the Association, each committee to consist of three (3) or more persons who may be, but are not required to be, directors of the Association, and who, to the extent provided in said resolution or resolutions, shall have and may exercise the powers granted to them in said resolution or resolutions. Such committee or committees shall have such name or names as may be determined from time to time by the resolution or resolutions adopted by the Board of Directors. A majority of the members of a committee of the Association shall constitute a quorum for the transaction of business. The acts of a majority of the members of a committee present at a meeting at which a quorum is present shall be acts of the committee. Any action taken by a committee of the Association in the interim between meetings of the Board shall be subject to ratification by the Board at its next meeting. The existence of any such committee may be terminated, or its powers and authority modified, at any time by resolution of the Board of Directors. The Board of Directors may provide by resolution for the payment of reasonable and necessary expenses to the members of such committees for attendance at the meetings thereof. Meetings of any committee of the Association shall be held within the state of New York except as otherwise expressly provided for by the Board of Directors.
C. Limitations
The Board of Directors shall at all times have power to modify, add to, take from or otherwise change and alter the duties and functions of all committees as it may from time to time see fit.
Article 8 - Operations
A. Address
The official address of the Association shall be the permanent office of the Association.
B. Employees; Agents
The Association may employ an Executive Director and such persons, firms, or corporations, attorneys or accountants, as are necessary for the performance of the duties imposed on the Association.
C. Bank Accounts; Borrowing; Investments
The Association may open one or more accounts. Reasonable delegation of deposit, withdrawal and investment authority to such accounts for Association business may be made consistent with prudent fiscal policy. The Association may borrow money and invest its assets as the Board of Directors in its judgment deems advantageous for the Association.
D. Contracts
The Association may enter into contracts as necessary to effect the purpose of the Association.
E. Budget and Fees
Prior to October 1 of each year, the Board of Directors shall adopt a budget for the Associations operating, capital and contingent expenses for the period January 1 to December 31 following. The budget shall take into account unknown and unanticipated expenses as may reasonably occur, and shall make provision for such expenses in accordance with prudent business practice. The budget may be amended upon a determination by the Board of Directors that it does not adequately reflect the financial needs of the Association. Based upon the anticipated volume of excess line premium during the period, the Board of Directors shall adopt a stamping fee to be charged on all excess line business submitted to the Association, and may adopt a minimum fee, fees for late or erroneous filings or payments or other fees approved by the Board of Directors. The stamping fee and the minimum fee, and any adjustments thereof, shall be submitted to the Superintendent of Financial Services for approval. In addition, any other fees charged by the Association which are subject to being passed along by members of the Association to insureds shall be submitted to the Superintendent of Financial Services for approval.
F. Payment of Fees
All members shall submit excess line insurance documents to the Association as required by the NYIL and shall pay the fees therefore as required by the Association. Any member who is more than 30 days delinquent in the payment of such fees may be reported to the Superintendent of Financial Services; provided, however, that any delinquency of more than 60 days shall be reported to the Superintendent of Financial Services.
G. Stamping
The Association shall receive, record and stamp all excess line insurance documents submitted to it pursuant to the NYIL provided that the unauthorized insurer that is to insure the business meets the standards of eligibility under NYIL and regulations. If the Association believes that the unauthorized insurer in question does not meet the standards of eligibility, the Association shall notify the Superintendent of Financial Services or the Superintendent's designee within 45 days of the Associations receipt of submitted insurance documents and prior to stamping of such documents.
H. Reports
The Association shall prepare reports to the Superintendent of Financial Services and to members as required by the NYIL and for such other purposes as are approved by the Board of Directors.
I. Procedures Manual; Affidavits
The Association shall prepare and distribute a Procedures Manual to each member setting forth the procedures for submitting excess line insurance documents to the Association and other matters germane to the operation of the Association. The Association may defer stamping of any excess line document which is not properly submitted to the Association in accordance with the provisions of the Procedures Manual. This Procedures Manual shall include standard form affidavits required by the NYIL.
J. Insurance
The Association shall procure such insurance covering directors, officers, employees and agents of the Association, the Association itself and its properties as it determines to be appropriate for the Association and its members.
K. Other Acts
The Association shall be empowered to provide such other services to its members as are incidental or related to the purposes of the Association including, but not limited to, actions that will facilitate and encourage compliance by its members with the NYIL and applicable regulations.
Article 9 - Records and Reports
A written record of the proceedings of each Board meeting shall be retained by the Secretary with copies furnished to each director and the Superintendent of Financial Services.
A written record of the proceeding of each meeting of each committee of the Board and of each committee of the Association shall be retained by the Secretary. This record shall be subject to examination by each director and by the Superintendent of Financial Services.
The Board of Directors shall, once each year, provide for an independent audit of all the books and records of the Association and a report of such independent audit shall be made to the Board and the Superintendent of Financial Services. Copies of such report shall be made available to each member to review at the Associations office.
Article 10 - Indemnification; Insurance
A. Indemnification
Any member of the Board of Directors, officer, employee or agent of the Association shall be indemnified by the Association against all expenses, judgments, decrees, fines, penalties, amounts paid in settlement, or incurred in the defense, of any action taken or not taken by such person in the performance of such persons powers and duties under the NYIL and this Plan. Such persons expenses shall be advanced to the full extent permissible under New York law, unless such person shall be finally adjudged to have committed a breach of duty involving gross negligence, bad faith, dishonesty, willful misfeasance or reckless disregard of such persons responsibilities. In the event of settlement before final adjudication, such indemnity shall be provided only if the Association is advised by its counsel that such person did not, in counsels opinion, commit such a breach of duty.
B. Insurance
The Board of Directors may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Association against any liability asserted against such person and incurred by such person in such capacity or arising out of his or her status as such, whether or not the Association can indemnify such person against such liability under this Article.
Article 11 - Dissolution
In the event the Association is dissolved and all its liabilities have been satisfied, the Board of Directors shall transfer the remaining assets to another non-governmental organization established for the same or similar purpose as the Association, or if no such organization exists, to one or more charitable organizations selected by the Board.
Article 12 - Amendments
This Plan may be amended at an annual, regular or special meeting of the Board of Directors by the affirmative vote of a majority of directors, whether or not present at a meeting, as provided for in Article 4. Amendments shall be effective upon approval in writing by the Superintendent of Financial Services.
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Last Reviewed/Revised: March 2, 2021
