November 24, 1987
Circular Letter No. 19 (1987)
TO: ALL INSURERS LICENSED TO WRITE MARINE INSURANCE IN THE STATE OF NEW YORK
RE: NATIONWIDE MARINE DEFINITION
When the Nationwide Marine Definition was revised in 1976, New York took exception to some changes made from the 1953 version. Specifically, New York did not approve the definition with respect to the following insurance risks:
(1) Bridges, tunnels and other instrumentalities of transportation and communication [Section D];
(2) Builder's risk and/or installation risks [Section F(9)];
(3) Domestic bulk liquid policies [Section F(21)];
(4) Difference in condition policies [Section F(22)]; and
(5) Electronic data processing policies [Section F(23)].
As a result of meetings with insurance industry representatives held this year, the. Department has reconsidered and revised its position in view of statutory and technological changes that have taken place since the date of its original determination. Effective immediately, the foregoing risks may be classified as inland marine insurance, subject to the following restrictions and limitations:
(1) Bridges, tunnels, et al. -- These risks may be written as inland marine without qualification. Filing of rates, forms, etc. will not be required.
(2) Builder's risk and/or installation risk policies -- These risks may be written as inland marine until the earliest of the following events:
(A) Occupancy of the structure by any tenant for the purpose for which the structure was intended;
(B) Delivery to, or acceptance by, the owner of the structure;
(C) Completion of the structure; or
(D) Issuance of a Certificate of Occupancy or Completion covering the structure, by any appropriate governmental authority.
For policies covering more than one structure, the foregoing rules of application shall apply separately to each structure.
As a manually rated class, rate and form filings will still be expected for builder's risk policies.
(3) Domestic bulk liquids -- These risks may be written as inland marine, provided that the tank is part of a larger pipeline system. Filing of rates, forms, etc. will not be required. Free standing tanks that are not part of a pipeline system may not be written as inland marine.
(4) Difference in condition (DIC) policies -- These risks may be written as inland marine if and only if all of the underlying policies also qualify as inland marine: For example, DIC policies written to insure real property at a fixed site do not qualify as inland marine. A DIC policy, written to fill the gaps of an underlying inland marine policy would qualify as inland marine. Filing of rates, forms, etc. will not be required.
(5) Electronic data processing policies -- These risks may be written as inland marine if the equipment being insured is of a relatively transportable nature, and intended to be used in that manner. Equipment that is intended to be used as part of a larger network or system does not qualify as inland marine.
For example, a lap-top or similar portable personal computer would qualify as inland marine. Personal computers designed to be used as terminals for a larger, mainframe network would not qualify as inland marine.
As manually rated risks, rate and form filings will continue to be made for electronic data processing policies.
Any questions regarding the foregoing should be directed to:
New York State Insurance Department
Property & Casualty Insurance Bureau
160 West Broadway
New York, New York 10013
Att: Gerald Scattaglia, Principal Examiner
Very truly yours,
JAMES P. CORCORAN
SUPERINTENDENT OF INSURANCE