The New York Automobile Insurance Plan (NYAIP) has sent a clarification to the Professional Insurance Agents of New York (PIANY) regarding its new declination procedure for agents in that state.
As stated by the Plan, the insurance department, producers and applicants are now required to indicate the names of one to three carriers who have declined the applicant for coverage in the voluntary market during the preceding 60 days and the reasons for the declinations. Following discussions between PIANY and the NYAIP, the following guidelines were identified:
• A producer does not have to obtain three declinations from carriers if he or she has only one or two carriers. The person needs only to list the reason as provided in the drop down box or indicate otherwise, or
• If the producer has no access to voluntary markets, the producer will be required to so state on the PASS application.
• When voluntary coverage is available, but the rates exceed Plan rates, the producer can place an applicant in the Plan and indicate the reason for declination is excessive rate.
• If a producer has knowledge that the applicant will not qualify for voluntary coverage based on underwriting criteria provided by the carrier(s), the producer is not required to submit an application to the carrier(s), nor receive any written declination. The producer need only list the carrier(s) and indicate the reason(s) the application would be declined. However it is recommended that the producer for documentation purposes keep a copy of the carrier’s underwriting criteria and highlight the reason for declination in the applicant’s folder.
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