N.Y. Ins. Law § 6613

§ 6613. Limitation of expenses; co-operative property/casualty\ninsurance companies. (a) The expenses of management of any co-operative\nproperty/casualty insurance company shall not exceed in any one calendar\nyear forty-two and one-half percent of its net premiums written for such\nyear. The term "net premiums written" means direct premiums written plus\nreinsurance assumed less return premiums and reinsurance ceded. In the\nevent expenses incurred in making a new system upgrade result in this\nsubsection's management expenses limit being exceeded, then the insurer\nshall inform the superintendent sixty days in advance of the expense\nlimit being exceeded. Subject to approval by the superintendent, the\nlimit shall be temporarily raised to the amount necessary to encompass\nthe aforestated new system upgrade, provided that in no event shall the\nlimit be raised more than five percentage points and shall not be in\neffect for more than six years. The insurer shall not increase premiums\nsolely as a result of the management expenses cap limit being exceeded.\nFor purposes of this subsection, a new system upgrade is defined as the\nacquisition of electronic data processing apparatus and related\nequipment constituting a data processing, record keeping or accounting\nsystem and operating and non-operating software.\n (b) Management expenses shall include all the expenses of such\ncompany, except expenses incurred in the investigation, adjustment and\nsettlement of claims, taxes, fees, expenses of examination, and taxes,\nrepairs, and expenses on real estate.\n (c) This section shall not apply to any assessment corporation which\nis limited to the business permitted under subsection (a) of section six\nthousand six hundred five of this article. Furthermore, the\nsuperintendent may grant an annual exemption from compliance with the\nprovisions of subsection (a) of this section to any co-operative\nproperty/casualty insurance company which, in the next preceding\ncalendar year, had net premiums written of less than three million\ndollars. A written application for such an exemption must be submitted\nby the first day of June in the year for which the exemption is\nrequested and shall contain such information as is deemed necessary by\nthe superintendent.\n