In this issue ...

Regulatory/Executive Developments

• DFS New Hires
• DFS Issues Cybersecurity Insights and Reminders
• NYIA Meets with DFS on Fraud Issues
• Feedback Requested on AI Generated Complaints
• DFS Proposes Updates to Financial Statement Filing and Accounting Practices Regulation
• DFS Adopts Regulation on RBC Requirements
• Governor Announces Next Steps to Regulate AI Developers
• Governor Declares State of Emergency

Legislative Developments

• Assembly Introduces Bills on Providing Data to DFS and Use of Credit in Homeowners
• New York State Association for Affordable Housing Supports Scaffold Law Reform

NYC Developments

• NYC Mayor Mamdani Backs UDAP Bill
• City Council Enacts Insurance Affordability Office Bill
• Stakeholders Urge NYC Mayor to Support Reform of Scaffold Law

Legal Developments

• Court Rules Bad Faith Includes Third-Party Claims
• Second Judge Strikes Down Climate Superfund Act
• Review of Upcoming Supreme Court Docket

Federal Development

• U.S. Senate Passes Terrorism Risk Insurance Program Reauthorization Act  

 

Regulatory/Executive Developments

DFS New Hires

DFS is continuing to build its leadership team and has hired three new staff members. Andrew M. Femia will be serving as Deputy Superintendent for Insurance. NYIA has reached out to DFS and understands that Andrew’s role will largely be interfacing with other agency divisions in relation to projects on behalf of the Insurance Division. Marc Gilman will be serving as Deputy Director for Responsible Artificial Intelligence Safety & Education (RAISE), and Charlie Honig will be serving as Special Counsel to the Superintendent. NYIA will be updating our DFS organizational chart and directory.

DFS Issues Cybersecurity Insights and Reminders

DFS has issued a new edition of DFS’ Cybersecurity Insights and Reminders Newsletter. The newsletter includes the new risk assessment guidance, a reminder for the annual compliance notification submission deadline on April 15, and registration for a compliance seminar on the annual compliance notification, which will be held on October 19 at 1:00 p.m. For the full newsletter, please email ssteinfeld@nyia.org.

NYIA Meets with DFS on Fraud Issues

Last week, NYIA met with the members of the DFS team regarding a range of fraud topics. The bureau definitely appeared interested in engaging with industry and collaborating to combat fraud. The bureau seemed open to hosting a seminar for companies on reporting best practices and how reports can best be positioned for potential prosecution. They also mentioned rolling out a streamlined reporting system which will be accompanied by guidance. NYIA has offered to serve as a resource, including in relation to garaging fraud. We will continue our conversations with the frauds bureau and keep members apprised.

Feedback Requested on AI Generated Complaints

NYIA has heard from several member companies that there has been an increase in artificial intelligence-generated complaints. We are looking to provide more information to DFS to demonstrate the extent of the issue, particularly operationally. If you have any information you can share, please contact Staci at ssteinfeld@nyia.org. NYIA will continue to engage with DFS on this topic.

DFS Proposes Updates to Financial Statement Filing and Accounting Practices Regulation

DFS has proposed an amendment to update the references in the financial statement filing and accounting practices and procedures regulation to reflect the 2026 edition of the NAIC Manual. Comments on the proposal can be submitted to michael.campanelli@dfs.ny.gov until November 13. If you would like NYIA to submit comments on your behalf, please contact Staci at ssteinfeld@nyia.org by November 1.

DFS Adopts Regulation on RBC Requirements

DFS adopted the proposal to delete the January 1, 2027 sunset date for allowing electronically traded fund (ETF) shares to be treated as bonds for the purpose of risk-based capital (RBC) requirements. The enacted language is available here.

Governor Announces Next Steps to Regulate AI Developers

The Governor held a press conference last week on the recently enacted RAISE Act which would regulate artificial intelligence developers. Given the number of bills surrounding AI and the ongoing proposals for regulation, NYIA will be continuing to track these developments and keep members apprised. In accordance with the RAISE Act, beginning in January 2027, AI companies will be required to provide regular reporting to the state’s new Office of Digital Innovation, Governance, Integrity and Trust (DIGIT) established within the New York State Department of Financial Services (DFS).

Governor Declares State of Emergency

On Friday, September 25, Governor Hochul declared a State of Emergency for Bronx, Kings, Nassau, New York, Queens, Richmond, Suffolk and Westchester Counties in response to a coastal storm that began impacting New York State Friday morning. The state of emergency will be in effect through October 25, 2026.

Legislative Developments

Assembly Introduces Bills on Providing Data to DFS and Use of Credit in Homeowners

Assemblymember Linda Rosenthal introduced two bills last week relating to property/casualty insurance. The first, A11724, would require carriers to provide underwriting models or granular claim data to DFS, upon the department’s request. The second, A11725, would prohibit the consideration of credit in underwriting and rating decisions in homeowners policies. NYIA will be opposing these bills, but as a reminder, they will need to be reintroduced with new bill numbers in the coming new year.

New York State Association for Affordable Housing Supports Scaffold Law Reform

The Association for Affordable Housing has stated their support for repealing the Scaffold Law. In an interview with Spectrum News/New York State of Politics, Carlina Rivera, president and CEO of the Association said that this would be a priority for the association and that Governor Hochul appears interested in such changes. The Governor’s office did not comment on the specifics.

NYC Developments

NYC Mayor Mamdani Backs UDAP Bill

New York City Mayor Zohran Mamdani is said to be backing city legislation that would provide individuals with a private right of action to file civil lawsuits against businesses for what is being labeled as unfair and abusive practices. A New York Times article ran yesterday announcing that the mayor was introducing the legislation, through councilman Harvey Weinstein as the sponsor, this upcoming Thursday. The bill is also expected to allow for nonprofits to sue companies directly. This appears to be an effort to resurrect a similar effort that was previously being pushed at the state level, with legislation ultimately being enacted that provided for greater state Attorney General authority. NYIA is tracking the issue closely and will provide additional information to members once the bill language has been released.

City Council Enacts Insurance Affordability Office Bill

The New York City Council bill which will create an Office of Insurance Affordability was enacted on September 14 after being returned unsigned by the mayor. As a reminder, the legislation will create a new office within the NYC Department of Worker and Consumer Protection (DCWP). The bill, Int 0685B was amended from its original version, which instead sought to create an Office of Insurance Accountability. The intended purpose of the office is stated to be to: provide general information on insurance to consumers and guidance on selecting policies; describe how consumers can submit complaints to DFS; conduct a study and report on insurance issues faced by consumers; and recommend actions to both city and state officials to benefit consumers of insurance. The legislation is effective September 2027.

Stakeholders Urge NYC Mayor to Support Reform of Scaffold Law

NYIA and other organizations operating in the construction, business and lawsuit reform areas have signed an open letter to New York City’s Mayor Mamdani, Housing Preservation and Development Commissioner Levy and City Planning Commissioner Sideya Sherman advocating for Scaffold Law reform. The letter highlights the savings that could be realized by the City if enacted and the additional affordable housing units that could be developed. The letter further elucidates the impacts of fraud and legal system abuse on construction and insurance costs in New York.

Legal Developments

Court Rules Bad Faith Includes Third-Party Claims

The Southern District of New York in Renergy v. Mt. Hawley Insurance Co. held that New York law allows an insured to pursue a bad-faith claim based on the insurer's handling of a third-party coverage claim, not just a traditional first-party claim. The court also allowed the policyholder to seek consequential damages beyond the policy benefits themselves. NYIA will continue to track relevant court decisions and further developments and keep members apprised.

Second Judge Strikes Down Climate Superfund Act

A second federal judge in the U.S. District Court for the Southern District of New York ruled that the state’s new climate “superfund” law is unconstitutional. Judge P. Kevin Castel decided on Wednesday that the law was pre-empted by the federal Clean Air Act and on the grounds that it interfered with foreign affairs. This decision followed a similar ruling last month by a judge in the federal court for the Northern District of New York in a parallel case brought by a coalition of Republican-led states and business groups.

Review of Upcoming Supreme Court Docket

The Supreme Court is scheduled to return in October and is faced with a docket filled with cases regarding expanding liability. These cases, involving different industries and legal questions, each reflect a broader fight over how far liability should extend, and who ultimately, will bear its cost. Several legal commentators have begun to prognosticate what changes may be on the horizon in reference to attorney advertising and nuclear verdicts. As the courts take up these cases, NYIA will be monitoring activity more closely and will keep you informed.

Federal Development

U.S. Senate Passes Terrorism Risk Insurance Program Reauthorization Act

On September 28, the U.S. Senate passed the Terrorism Risk Insurance Program Reauthorization Act of 2026 (S4395). The bill would extend the program until 2034, as it is set to expire at the end of 2027. The corresponding House bill (HR7128) has not yet passed that chamber.