NEWS

Could New York Open More Primary Medical Malpractice Placements to Excess Lines

April 6, 2026

New York could materially widen access to non-admitted primary medical malpractice markets if S4964 becomes law, because the bill would remove the current requirement that an excess line broker first obtain a declination from the Medical Malpractice Insurance Pool before placing primary malpractice coverage for physicians, dentists, and general hospitals in the excess line market.

That matters because the sponsor memo does not describe the current MMIP declination rule as a minor procedural step. It says MMIP generally will not decline these risks except in the rarest circumstances, which effectively bars the excess line market from this business today. The bill passed the New York Senate again on March 23, 2026 and was referred to the Assembly Insurance Committee, so this is an active market-access issue rather than a theoretical proposal.

For retail agents, this is a placement story first and a coverage story second. If the bill advances, it would not eliminate the admitted market or MMIP. It would change the order of operations for certain primary med-mal placements and make it more realistic to use surplus lines capacity for harder-to-fit physician, dental, or hospital risks when the standard market is not offering workable terms.

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What would S4964 actually change

S4964 would remove medical malpractice insurance for general hospitals, physicians, and dentists from the part of Insurance Law § 2118 that currently prevents a diligent effort from counting unless the broker first obtains a declination from the relevant residual market association. In practice, that means the bill would stop MMIP from functioning as a gatekeeper that blocks most primary med-mal risks from reaching the excess line market.

The bill does not say brokers could place these risks casually with any non-admitted carrier. The sponsor memo says excess line brokers would still need to make a diligent search of the licensed market before placing the risk with an excess line insurer. That is an important distinction for agents: the proposal is about restoring access to an additional market tier, not bypassing placement discipline altogether.

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Why this matters for hard to place medical risks

This bill matters because excess and surplus lines markets exist to handle risks the admitted market cannot or will not insure on workable terms. AM Best’s 2025 surplus-lines market report describes the sector as a safety valve for risks that are distressed, unique, emerging, or require customized solutions, and it specifically notes that S4964 is intended to expand options for doctors, dentists, and hospitals by allowing access to broader, customized coverage from financially sound non-admitted insurers.

That is directly relevant to Western Summit’s world. For a retail agent with a difficult class, a bad loss history, a coverage-structure problem, or a provider/facility that does not fit standard appetite, the real issue is often not whether some quote exists. It is whether there is meaningful access to alternative terms, limits, attachment points, or underwriting approaches. This bill is aimed at that exact bottleneck.

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What retail agents should watch if the bill advances

Retail agents should watch for three practical consequences.

First, more primary med-mal business could become placeable through wholesale excess line channels where the admitted market is unavailable or too restrictive. AM Best notes that surplus lines intermediaries are the distribution system that gives retail producers access to non-admitted markets when admitted options are not workable.

Second, coverage flexibility could increase, but so could the need for careful file documentation. AM Best notes that surplus lines insurers are not subject to the same rate and form regulation as admitted insurers, which is part of why they can address specialized risks. That flexibility can be valuable in a hard placement, but it also means agents need to pay close attention to defense-cost structure, exclusions, consent language, sexual misconduct carve-backs, venue issues, retro dates, and limit adequacy rather than assuming a med-mal form is interchangeable with admitted coverage.

Third, insureds would still need to understand the tradeoffs of non-admitted placement. The bill text itself requires written notice that the placement is with an unauthorized insurer and that losses are not covered by any New York insolvency fund if that insurer becomes insolvent. ELANY’s March 2026 compliance advisor and AM Best’s surplus-lines report both reinforce that guaranty-fund protection generally is not available to surplus-lines insureds.

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What this does not mean yet

This does not mean New York has already opened primary med-mal to the excess line market. As of now, S4964 is still pending in the Assembly Insurance Committee. The current story is that the Senate has again approved a bill that would materially change market access if enacted.

It also does not mean every physician or facility should prefer non-admitted coverage. The likely impact is more selective than that. The clearest beneficiaries would be insureds whose placements are already constrained by class, claims history, territory, capacity, or form issues, which is exactly where wholesale market knowledge tends to matter most. That is why this is a broker-relevant development, not just a legislative footnote.

If S4964 becomes law, the practical effect would be to make New York primary med-mal placements less dependent on MMIP’s non-declination posture and more open to specialty-market solutions. For retail agents, that would not remove the need for disciplined underwriting and careful form review, but it could create a more workable path for complex or hard-to-place medical professional liability accounts.