N.Y. Comp. Codes R. & Regs. tit. 11, § 161.3 – Exempt markets.

(a) As a general proposition, markets that have experienced recent sharp swings in rate level will not be exempted from flex-rating. Designed to promote stability over the long range in the interests of insureds, insurers, consumers and the public-at-large, the flex-rating system envisions broad rate change flexibility coupled with increased regulatory scrutiny of substantial rate changes, whether in an upward or downward direction.
(b) Following public hearings, market surveys and other information analyzed by the department, the superintendent has determined the identity of those commercial risk, professional liability and public entity insurance markets that should be exempted from flex-rating. Because competition is sufficient to assure that rates will not be excessive in the particular market or such market is conducted in a manner not resulting in inadequate rates, not destructive of competition or detrimental to the solvency of insurers, the superintendent at this time exempts the following markets from flex-rating:
1. (1) Lines of insurance, as reported on page 14 of the annual statement blank, as follows:
  1. (i) fire and allied lines;
  2. (ii) farmowners;
  3. (iii) ocean marine;
  4. (iv) inland marine;
  5. (v) earthquake;
  6. (vi) fidelity;
  7. (vii) surety;
  8. (viii) aircraft;
  9. (ix) glass;
  10. (x) burglary and theft;
  11. (xi) boiler and machinery; and
  12. (xii) credit (including credit unemployment); and
2. (2) The following types of markets:
  1. (i) those components of commercial multiple peril (CMP) package policies providing any section 161.3(b)(1) coverage (except that flex-rating shall apply to any changes in package modifiers, to the combined effect of package modifiers and rate changes affecting separately rated liability components of such package policies, and to indivisibly rated business owners policies [BOP] and business auto policies [BAP]);
  2. (ii) hyper limits excess liability policies;
  3. (iii) high limits excess liability policies (except in the case of renewal policies);
  4. (iv) any excess liability policy written over one or more underlying policies, all of which are themselves exempt from flex-rating pursuant to this section;
  5. (v) ‘a’ rated risks (except in the case of renewal policies);
  6. (vi) special risk insurance;
  7. (vii) jumbo risks;
  8. (viii) nuclear liability;
  9. (ix) pollution liability; and
  10. (x) residual value insurance.
(c) These exempt markets will thus remain subject to the competitive rating system. With the exception of continuing prior approval pursuant to section 2305(b) or section 2328 of the Insurance Law for such markets as public livery, medical malpractice, workers' compensation, title and mortgage guaranty insurance, and individual consent-to-rate submissions, flex-rating will apply to all other commercial risk, professional liability and public entity insurance policies, commencing with rate filings submitted to the department on and after September 26, 1986. Flex- rating does not apply to personal lines property/casualty insurance markets or to nonproperty/casualty insurance markets.
(d) By amending this Part, the superintendent can determine at any time, following a hearing, to add, modify or eliminate any exemption. By amending this Part, the superintendent may also modify the definition of any market or modify flex-bands applicable to nonexempt markets. In the event that a market that has been exempt should become subject to flex-rating, an appropriate flex-band for that market will be established. The determination of whether or not to continue a market under flex-rating or exemption from flex-rating will be reviewed periodically by the superintendent.