Yesterday Governor Kathy Hochul released the Executive Budget for fiscal year 2027. The Legislature also announced the joint legislative hearing schedule on the Executive Budget proposal. These hearings, each of which focuses on a programmatic area of the Executive Budget, are intended to provide the appropriate legislative committees with public input. The hearings will be available for viewing on the Senate and Assembly websites. The public policy provisions within the state budget are contained within the Article VII bills, which are Education, Labor and Family Assistance (ELFA); Health and Mental Hygiene (HMH); Public Protection and General Government (PPGG); Transportation, Economic Development and Environmental Conservation (TED); and Revenue (REV). Below are summaries of major provisions pertaining to property and casualty insurance. There are many proposals in this year’s Executive Budget related to our industry and market. We have included our initial take on each proposal, but in many cases want to be sure to have member input before formalizing our position. NYIA is continuing to review the thousands of pages of budget bills and will report to members on any further developments.

The Quick Overview
Auto: giving insurers more time to investigate fraudulent claims and combatting fraud and litigation abuse
Property: creating reporting requirements and capping loss ratio benchmarks
Workers Compensation: increasing the number of providers who can treat and establishing an assessment for additional fraud resources
Medical Malpractice: changing the Excess Medical Malpractice program and setting MIF reimbursement rates to 100 percent

Taxes, Assessments and Fees
Our review has not revealed any major increased taxes or fees on the property and casualty insurance industry, which means no increase in the premium tax nor an extension of the two percent premium tax to cooperatives. In relation to the New York State Department of Financial Services (DFS) budget and the Financial Services Law section 206 assessments, the total DFS budget proposed in the Executive Budget for fiscal year 2027 is $593,987,000, which represents a 1 percent increase from the last fiscal year. This figure includes an increase to the insurance program portion of DFS’s budget, including an increase of just over 1 percent to DFS’s insurance operations and a 1 percent increase to the sub-allocations. NYIA will be advocating for the insurance portion of the budget to remain at these proposed figures or decreased. The Department of Motor Vehicles proposed assessment to writers of motor vehicle liability insurance for administration of the state's compulsory insurance program, which includes the Insurance Information Enforcement System (IIES), for the 2027 fiscal year is $11,577,000, which is flat from the previous fiscal year.

General Insurance
Criminal Penalties of Insurance Fraud: Part F (page 36) of PPGG would expand the definition of “fraudulent insurance act” to include staging a motor vehicle accident and codify specific criteria for the various degrees of insurance fraud and health care fraud. NYIA supports.

Market-Based Interest Rate on Court Judgements: Part DD (Page 251) of PPGG would change the interest rate on court judgments paid by both public and private entities from the present legal rate of interest (9 percent) to a market rate of interest (the weekly average one-year constant maturity Treasury yield). NYIA supports as a priority on our affirmative agenda.

Extend the Metropolitan Transportation Authority’s Tax Increment Financing Authorization: Part H (page 25) of TED would extend the Metropolitan Transportation Authority (MTA) tax from April 1, 2026 to April 1, 2036. The tax applies to employers within the 12-county Metropolitan Commuter Transportation District (MCTD) around New York City. NYIA neutral.

Labeling for AI-Generated Content: Part X (page 91) of TED would require provenance data on AI- generated content, which allows users to reveal information such as origin, creation date, and editing of the content. NYIA is seeking feedback from members.

Regulation of Data Brokers: Part AA (page 109) of TED would require that data brokers operating in New York register with an office at the Department of Financial Services, honor requests from consumers via a centralized request submission system to have their 24 personal data deleted, as well as refrain from selling or sharing new personal data, and make certain disclosures on their websites. NYIA is seeking feedback from members.

Premium Increase Explanations: Part BB (page 148) of TED would require insurers subject to article 23 of the insurance law to include the amount a premium will increase from a prior policy period, and an explanation of why the increase occurred, prior to renewal when the premiums associated with a homeowners or automobile insurance policy increase by more than 10
percent. Additionally, specific language would be required on premium bills or declaration pages that will inform consumers of their right to request a written explanation for any premium increase. Upon receiving a written request for a premium increase explanation, the insurance company would be required to respond to the insured within twenty days. In NYIA’s initial review we have concerns and are seeking feedback from members.

Reducing Unnecessary Litigation: Part EE (page 156) of TED would narrow the serious injury threshold; limit the amount of non-economic damages from being awarded to uninsured motorists, individuals convicted of driving while impaired, and individuals committing a felony or fleeing one at the time of the accident; only allow for non-economic damages if a plaintiff is not primarily at fault for the accident; and ensure that defendants in multi-party personal injury auto cases are held responsible only for the damage they cause, not damages caused by other unrelated defendants. In NYIA’s initial review we think this proposal could be very positive but are seeking feedback from members.

Auto Insurance and Roadway Safety
Motor Vehicle Theft and Fraud Prevention Board: Part G (Page 41) of the PPGG would update the Board’s composition and administrative procedures, adapt its duties, and clarify the DCJS Commissioner’s authority as Chair, and revise reporting timelines to allow DCJS to receive necessary data. NYIA neutral.

Extend the Internet Point Insurance Reduction Program: Part B (page 8) of TED would extend the internet point insurance reduction program from April 1, 2026 to April 1, 2028. NYIA neutral

Strengthen Motorcycle Licensing Standards for New and Inexperienced Riders: Part C (page 8) of TED would require those applying for a motorcycle license to complete a motorcycle rider safety course. NYIA supports.

Stop New York City's Super Speeders through Intelligent Speed Assistance: Part D (page 9) of TED would allow cities with populations of one million or more to establish an intelligent speed assistance device pilot program. The program could require those with repeat convictions of speeding to install technologies in their car that limits the speed of the vehicle. NYIA supports.

Autonomous Vehicle Technology Demonstrations: Part E (page 11) of TED would exempt for-hire autonomous vehicles from operating a motor vehicle without having at least one hand on the steering mechanism and defines for-hire autonomous vehicles. NYIA is seeking feedback from members.

Expand the Automated Work Zone Speed Enforcement Program: Part G (page 20) of TED would expand the Automated Work Zone Speed Enforcement Program to highways. The part further defines highways. NYIA supports.

Dashboard Camera Premium Reductions for Automobile Insurance: Part II (page 173) of TED would require automobile insurance companies to offer an actuarially justified premium discount for an insured driver who equips their vehicle with a dashboard camera, pursuant to certain verification requirements. NYIA is seeking feedback from members.

Extend the Excess Profit Law for Automobile Insurance: Part KK (page 181) of TED would extend the automobile insurance provisions regarding excess profits for an additional three years, until June 30, 2029. NYIA is neutral as this provision is written as a straight extender.

Strengthening Insurer Anti-Fraud Programs: Part FF (page 158) of TED would extend from 30 to 60 days the amount of time an insurer has to report suspected fraud to DFS, and would clarify the right of an insurer to deny a claim or assert a defense after the 30-day payment requirement when fraud is suspected (These provisions would overrule Presbyterian Hospital v. Maryland Casualty Co., 90 N.Y.2d 274, 660 N.Y.S.2d 536 (1997)). NYIA supports.

Medical Liability Insurance
Excess Physician’s Medical Malpractice: Part D (Page 159) of the HMH would amend chapter 266 of the Laws of 1986, to extend the Excess Medical Malpractice program, but would restructure the payments under such program to defer half of current year payment obligations to the following year, effectively halving the program cost for the state for the current year. By doing so the cost of this expense would be transferred to the physicians and providers of the state, dramatically increasing their costs of coverage. Additionally, this bill would further seek to recoup recurring savings for the state by restructuring the outyear payments to also be reduced by half. This bill shifts the cost of this important program from the State of New York to physicians, thereby making retention and recruitment of these medical professionals more difficult and undermining the very purpose of the Physician’s Excess Medical Malpractice program. NYIA opposes.

Medical Indemnity Fund Reimbursement Rates: Part I (page 196) of the HMH would set reimbursement rates to 100 percent of the Medicare rate of reimbursement for qualifying health care costs, or, if no Medicare rate of reimbursement is available, 100 percent of the Medicaid rate of reimbursement, or, if there is no Medicare or Medicaid rate of reimbursement, a rate determined by the Commissioner of Health. NYIA neutral.

Property Insurance
Homeowners' Insurance Loss Ratio Benchmark: Part CC (page 150) of TED would require homeowner insurers subject to article 23 of the insurance law who meet certain requirements to refile their rates with DFS, for prior approval, if the insurer had a loss ratio below a specific benchmark that would be established for the prior two calendar years. The bill would authorize the Superintendent of DFS to conduct a study to analyze and determine a benchmark loss ratio for homeowners insurance companies. NYIA opposes.

Automatic Property Insurance Premium Reductions: Part DD (page 151) of TED would require insurers subject to article 23 of the insurance law, to offer an actuarially justified premium discount to homeowners and commercial property owners who make improvements to their property that contribute to the safety and security of the insured structures, such as smart water monitors and roof improvements. In NYIA’s initial review we have concerns and are seeking feedback from members.

Reporting Requirements for Insurers of Multi-Family Housing: Part GG (page 159) of TED would require insurers who issue certain policies to residential properties that contain two or more dwelling units to file a report with DFS by March 1 each year. The contents of the report must, at a minimum, include information on collected premiums and claims paid, and be publicly posted on DFS’ website. In NYIA’s initial review we have concerns and are seeking feedback from members.

Workers Compensation Insurance
Workers Compensation Fraud Units: Part W (Page 210) of the PPGG would permit the Workers’ Compensation Board to assess and collect funding from businesses for grants to district attorneys’ offices to establish and maintain dedicated workers’ compensation fraud units. NYIA is seeking feedback from members.

Increase Access to Medical Care for Injured Workers: Part X (Page 211) of the PPGG would permit all eligible, licensed New York State medical providers in good standing to treat workers’ compensation patients. NYIA is seeking feedback from members.