Statement that the proposed action amending 11 NYCRR Part 89 (Insurance Regulation 118) is a consensus rulemaking and that no person is likely to object to its adoption.
This rulemaking clarifies 11 NYCRR Part 89 by conforming section 89.4(c)(2) to the National Association of Insurance Commissioners ("NAIC") model audit rule. The model audit rule requires an insurer, whenever a Certified Public Accountant ("CPA") is dismissed or resigns, to notify the commissioner (superintendent) and to state whether there were any disagreements with the former CPA. Although it was not the intent, the current regulation appears to require notification only if a disagreement exists. Therefore, this amendment revises section 89.4(c)(2) to clarify that whenever a CPA is dismissed or resigns, the company must notify the Superintendent as to whether there were any disagreements with the former accountant, in conformity with the NAIC model audit rule.
Because the amendment merely clarifies the rule to better express its purpose and to be consistent with the NAIC model audit rule, no person or entity is likely to object. Moreover, adoption of the model is necessary for New York to be an accredited state under the NAIC Accreditation program. NAIC accredited state departments must undergo a comprehensive review every five years by an independent review team to ensure they continue to meet baseline standards. The accreditation standards require that state departments have adequate statutory and administrative authority to regulate an insurer's corporate and financial affairs, and that they have the necessary resources to carry out that authority.
Accordingly, this rulemaking is determined to be a consensus rulemaking, as defined in State Administrative Procedure Act ("SAPA") § 102(11), and is proposed pursuant to SAPA § 202(1)(b)(i). Therefore, this rulemaking is exempt from the requirement to file a Regulatory Impact Statement, Regulatory Flexibility Analysis for Small Businesses and Local Governments, or a Rural Area Flexibility Analysis.