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Albany Update 01.10.24
Governor Delivers State of the State Address
In her one hour State of the State annual message to the legislature, delivered on Tuesday, January 9, 2024, Governor Kathy Hochul outlined several public policy initiatives for the upcoming 2024 legislative session. From addressing unfair and deceptive business practices, to promoting the development, construction and access to affordable housing, to the advancement of several “resiliency” initiatives, to a new proposal on lithium batteries, the governor’s agenda was both comprehensive and ambitious. A recording and summary of the Governor’s Address, and the 2024 State of the State Book, are now available.
Consumer Protection
One issue the Governor addressed, that may have significant impact on the insurance industry, was a new unfair trade practices initiative. Although short on details, the Governor vowed to work with Attorney General Letisha James to “propose legislation to expand New York’s consumer protection law for the first time in more than 40 years, by making so called unfair and abusive business practices illegal and giving the Office of the Attorney General a path to punish predatory operators.”
This initiative is most likely signaling support for last year’s purported Unfair and Deceptive Trade Practices bill, sought to be advanced last year by the Attorney General. This very hurtful and misinformed bill, S795 (Comrie)/A7138 (Weinstein), was shockingly named the “Consumer and Small Business Protection Act”, despite the fact that nearly every small business group was vocally opposed to its enactment.
This bill, which was vigorously opposed by NYIA last session, was referred to in the insurance industry as the “Litigation Bomb”, and would not only weaponize consumer based actions by the Attorney General under the General Business Law, but would further empower a private right of action, whereby both consumers and their representatives (even without privity) could bring lawsuits where a consumer believes they were not treated by the business in the manner they wished.
Affordable Housing
Another issue the Governor addressed, that may have significant impact on the insurance industry, was a new affordable housing initiative. Although, again, short on details, Governor Hochul declared that she would direct the New York State Division of Human Rights, in partnership with her Division of Homes and Community Renewal (HCR), to launch a new enforcement unit dedicated to swift resolution of complaints about housing discrimination related to Section 8 Housing Choice Vouchers. This Early Intervention Unit would help to resolve issues and place qualified impacted individuals and families in available housing.
The Governor also stated that she would further propose legislation to prohibit insurance carriers from inquiring about or considering tenants’ sources of income, the existence of affordable dwelling units, or the receipt of governmental housing assistance in their decision as to whether to issue or continue to provide insurance for residential real property. The Governor also stated that she would further prohibit insurance carriers from increasing premiums on the basis of source of income, the existence of affordable dwelling units, or the receipt of governmental housing assistance.
Although NYIA has yet to see any language on these proposed bills, they do seem as if they may be similar to A7910(Weprin)/S7298 (Kavanagh) which was introduced late last session. This bill, which would prohibit discrimination by insurers due to the affordability of housing, is a poorly drafted piece of legislation, that could severely impair the ability of an insurer to underwrite or rate property insurance based on actual risk factors of the property, and not the residents who live there. Accordingly, NYIA is strongly opposed to this bill, and will continue to advocate against it, in its current form. Additionally, in the event that the Governor’s legislation, when introduced, is similarly harmful to the insurance industry, NYIA will certainly also oppose the same, and take all efforts we can to see that they are either defeated or amended to remove any such harm.
Resiliency
Governor Hochul is also proposing a Resilient and Ready Program to create a flexible fund that will be used to fortify housing stock and other critical infrastructure, particularly in flood-prone communities ahead of future storms.
Under this initiative, she will reportedly direct HCR to assist households that experience flood damage to assist homeowners in making necessary repairs in the aftermath of storms. This program will also promote the installation of fortification improvements, so as to prevent the likelihood of repetitive storm damage. It will also coordinate with the Departments of Environmental Conservation (DEC) and State (DOS), the New York State Energy Research and Development Authority (NYSERDA), and local government and nonprofit organizations, to identify appropriate geographic targets for this program.
This program will focus on homeowners at risk due to future flooding events, and seek to move swiftly following severe weather events to get assistance to homeowners in need.
In addition to this program, the Governor also announced a Blue Buffer Program, that will target a voluntary buyout program, where families that choose to participate can be supported in their move from a coastal area, out of harm’s way, so as to reduce homeowners’ and governmental costs associated with repetitive flooding, and so as to create space for resiliency projects that protect entire communities. Through this initiative, the Blue Buffers Program, along with other state agencies, municipalities, or non-profits, will enter into agreements with property owners to acquire real property, based upon the pre-flood fair market value of the subject property. It would further remove structures and/or infrastructure on the property; and restore natural resources to facilitate beneficial open space, flood mitigation, and/or shoreline stabilization. Real property purchased would be restored and maintained in a manner that aims to increase ecosystem function, provide additional flood damage mitigation for surrounding properties, protect wildlife habitat, and wherever practicable and safe, allow for recreational community use.
Along with her Blue Buffers Program, the Governor promised to update codes and standards for better, safer buildings, by directing the Codes Council to undertake an overhaul of building codes designed to bring New York up to the latest standards on resilient buildings.
Lithium Ion Batteries
The Governor also announced that she will advance several strategies to tackle the increase in fire deaths, so as to promote both residential fire safety and lithium-ion battery safety. This initiative will include providing funding to the Division of Homeland Security and Emergency Services (DHSES) to launch Fire Action Teams, that would be dispatched to fatal fires to evaluate causal factors and develop resources tailored to communities’ specific risk factors. This initiative would also expand the State’s fire investigation capacity and include the advancement of legislation to ban sales of lithium-ion batteries that do not meet minimum standards for safety.
The lithium battery part of this initiative would likely be similar to A4938B (Dinowitz)/S154C (Krueger) which prohibits the sale or distribution of Lithium Batteries that have not been certified by a nationally recognized testing laboratory such as underwriters laboratories. Due to the increase in fires cause by such batteries, especially in the City of New York, and its related increase in fire claims experience, this is an initiative that NYIA would most likely support.
NYIA will of course provide more information on these important initiatives when it becomes available.