Enacts the small insurer protection act prohibiting the filing of an application for an order of rehabilitation or liquidation of a small insurer on certain grounds unless such order is based on: the superintendent's adoption of a report on examination finding the company insolvent; or the annual or quarterly financial statements of the company, which show that the company's admitted assets do not exceed its liabilities and surplus to policyholders if the company does not maintain reserves in an amount determined reasonable by its independent loss reserve specialist or its appointed actuary.

The Small Insurer Protection Act (S02442) aims to protect small insurance companies in New York by restricting the grounds on which they can be placed into rehabilitation or liquidation. Specifically, it prohibits such actions unless they are based on:

1. The superintendent's adoption of a report on examination finding the company insolvent.

2. The company's annual or quarterly financial statements showing that its admitted assets do not exceed its liabilities and surplus to policyholders, provided the company does not maintain reserves deemed reasonable by its independent loss reserve specialist or appointed actuary.

The bill defines a "small insurer" as a domestic property/casualty insurance company with annual net direct written premiums not exceeding $25 million, at least 75% of which is from commercial automobile liability business. ([legiscan.com](https://legiscan.com/NY/text/S02442/2025?utm_source=openai))

The Small Insurer Protection Act (S02442) has been introduced in the New York State Senate to safeguard small insurance companies, particularly those specializing in commercial automobile liability. By limiting the circumstances under which these companies can be placed into rehabilitation or liquidation, the bill aims to foster a more stable and competitive insurance market in New York. This initiative is expected to encourage new entrants and innovative insurance products, benefiting policyholders and the public. ([legiscan.com](https://legiscan.com/NY/text/S02442/2025?utm_source=openai))

While the Small Insurer Protection Act (S02442) seeks to protect small insurance companies, concerns have been raised about its potential impact on policyholder protection. By restricting the grounds for placing companies into rehabilitation or liquidation, there is a risk that financially unstable insurers may continue operating, potentially exposing policyholders to greater financial risk. Critics argue that the bill may prioritize the interests of insurers over those of consumers, and advocate for a more balanced approach to ensure both insurer stability and policyholder security. ([legiscan.com](https://legiscan.com/NY/text/S02442/2025?utm_source=openai))