The Governor hosted a press conference this morning and announced that a budget agreement has been reached, in what she has said will amount to a total budget of $268 billion for the state. The legislative leaders have not made similar announcements and Speaker Heastie has been reported as saying a deal has not been reached.

The Governor specifically stated that the budget will tackle fraud and litigation abuse. She also indicated that the budget will prevent carriers from using certain underwriting factors and include a cap on excess profits, but she did not provide much context. We also note that she was quick to state that the budget stood up to special interests that tried to influence the outcome.

A release was issued by the Governor highlighting a few key issues including what was labeled as “Lowering Auto Insurance Rates for Everyday New Yorkers.” The information below is excerpted from the release and characterized as being contained in the agreed upon budget. It appears the fraud initiatives are still being discussed.

• Cap payouts for drivers engaging in criminal behavior at the time of the incident, including uninsured motorists, drunk drivers, and drivers in the act of committing a felony.
• Better define what actually constitutes a ‘serious injury’ so that damages for pain and suffering or emotional distress are reserved for those able to objectively demonstrate that they have suffered a serious injury.
• Ensure that if a driver is found to be mostly at fault for causing an accident, they cannot claim outsized payments for damages.
• Prevent insurance companies from exorbitantly raising rates by setting a legal threshold that prevents excess profits and returns savings to consumers.
• Create new regulatory safeguards to prevent insurance companies from raising rates without seeking express approval from the Department of Financial Services.
• Protect consumers by prohibiting insurance companies from setting rates based on extraneous, personal factors like homeownership status, occupation, education level or zip code.
• These measures come in addition to the Governor’s whole-of-government approach to combatting fraud by tasking DFS, DMV, DCJS and NYSP with a more proactive and coordinated approach to enforcement.

NYIA is making inquiries as far as what was agreed upon in relation to the list above, specifically excess profits and the prohibition on homeownership as an underwriting factor. We are also asking about other provisions being considered, particularly in relation to property. We do not expect an immediate vote as the Legislature is extending the current budget until Monday, May 11. NYIA will continue to monitor closely and keep members apprised.