The New York Insurance Department has announced the addition of six classes of coverage as eligible for the so-called “free trade zone.” The classes, all of which are forms of professional liability coverage, join the list of Class 2 risks effective July 23, 2008. Classes on the Class 2 risk are eligible for inclusion in the free trade zone regardless of premium size. According to N.Y. Insurance Regulation 86, these are risks “of an unusual nature, a high loss hazard, or difficult to place.”
Authorized by N.Y. Insurance Law, the free trade zone is for special risks that are jumbo in dimension or exotic in nature. Insurance companies that hold special risk licenses may write risks in the free trade zone without having to file the rates and forms with the Insurance Department.
The new classes on the Class 2 risk list are:
- Errors & Omissions Coverage for Health Maintenance Organizations
- E & O Coverage for independent physicians associations
- E & O Coverage for Preferred Provider Organizations
- E & O Coverage for third party administrators
- E & O Coverage for utilization review organizations
- Professional liability coverage for actuaries.