Albany Update 04.18.24

KNOW BETTER NEW YORK CONNECTIONS

Albany Update 04.18.24

In this issue …

New York State Budget Update

At long last, progress appears to be being made toward the final adoption of a New York State Budget. What appears to be the final budget extender, A9852 (Weinstein) / S9083 (Krueger), which would extend appropriations in support of government through Friday, April 19, 2024, is scheduled to go to the floor of both houses for consideration today, April 18, 2024.

Accordingly, it now appears budget votes may start occurring on an actual agreed upon budget, as soon as tomorrow, April 19, 2024. Three of the major budget bills (A8805C/S8305C) The Public Protection and General Government Bill (PPGG), (A8808C/S8308C) The Transportation, Economic Development and Environmental Conservation Bill (TED), and (A8809B/S8309B) Revenue (REV) have been very recently amended, and appear to be ready for legislative passage. Certain important provisions of these three bills, which NYIA has been tracking are as follows:

Part H of PPGG – Online Verification System (NYIA initiative). This provision would have enacted a transition of New York’s motor vehicle liability insurance reporting, from the present Insurance Information Enforcement System (IIES), to a modernized, real time, Online Verification System (OLV). This Part appears to have been deleted from the final budget language, but NYIA has been repeatedly told that there is still interest by both the Governor and the Legislature, to pass a separate, stand alone bill to accomplish this initiative this year.

Part R of PPGG – Lowering Interest Rate on Legal Judgments (NYIA initiative). This provision would have changed the interest rate on court judgments paid by both public and private entities to the present legal rate of interest (9 percent), to a market rate of interest (the weekly average one-year constant maturity Treasury yield). This Part appears to have been deleted from the final budget language, due to lack of interest in both houses of the state legislature.

Part F of TED – Extension of Internet Point Insurance Reduction Program. This provision will extend the Internet Point Insurance Reduction Program (IPIRP) until April 1, 2026. Such program, overseen by the State Department of Motor Vehicles, allows drivers to reduce points on their driving record by taking an approved online accident prevention course. This program would have otherwise expired on April 1, 2024 without this legislation. This Part was included in the amended budget bill.

Part J of TED – Autonomous Vehicle Technology Extender. This provision will extend the authority of the Department of Motor Vehicles to continue demonstrations and tests of motor vehicles equipped with autonomous vehicle technology until April 1, 2026. This program would have otherwise expired on April 1, 2024 without this legislation. This Part was included in the amended budget bill.

Part K of TED – Stretch Limousine Passenger Safety Act. This provision will amend the Transportation Law and Vehicle and Traffic Law, to establish a comprehensive limousine safety package based upon recommendations from the Stretch Limousine Passenger Safety Task Force. This Part was included in the amended budget bill.

Part FF of TED – Affordable Housing Underwriting and Rating. This provision would have prohibited insurance companies from inquiring on an application, or canceling, refusing to issue, refusing to renew or increasing the premium of a policy, based on the level or source of income of tenants, the property containing any residential dwelling units that must be affordable, and the owner or residents receiving government housing subsidies. Thankfully, at least for the present, this part has been stricken from the budget. There has been talk, however, that this proposal may be seen again this session, as a separate bill, so we will all have to remain vigilant on this issue.

Part GG of TED – Lithium-Ion Batteries National Laboratory Certification. This provision would have amended the general business law, to prohibit the sale of lithium-ion batteries or refurbished lithium-ion batteries, for use in micromobility devices, to only those batteries that have been certified by a nationally recognized testing and certification laboratory (such as Underwriters Laboratories). This part, which to promote fire safety and deter insurance losses, caused from fires with malfunctioning lithium batteries, was omitted from the amended budget bill, but there remains discussion with the legislature that it could appear later as a separate stand alone bill.

Part JJ of TED – Expanding Penalties and Litigation Against Business and Insurers. This provision, which NYIA worked aggressively and hard against, would have amended section 349 of the general business law to recharacterize and make unlawful, certain “Prohibited Acts and Practices,” in the conduct of any business, trade or commerce. Known as UDAP (for unfair, abusive and deceptive practices) this provision would have captured insurers and many other businesses, into a cyclone of what has been referred to as a “litigation bomb”, with extremely amorphous, and in some cases of non existent standards and definitions, where plaintiff lawyers would be able to develop a cottage industry to bring private right of action lawsuits, where in some cases, no actual harm need even be proven. Thankfully, at least for the present, this part has been stricken from the budget. There has been talk, however, that this proposal may be seen again this session, as a separate bill, so we will all have to remain vigilant on this issue.

Kindly note, that as of the production of this Albany Update, no amended versions of the other major budget bills, such as (ELFA) – Education, Labor and Family Assistance (presently A8806B/S8306B), (HMH) Health and Mental Hygiene (presently A8807B/S8307B) have been printed or released for public view.

Final Supplemental Spousal Liability Bill Language

While not part of the budget, we have been told the final supplemental spousal bill language was agreed to by the Legislature and Governor in connection with the budget. The Senate bill that was just introduced last week was amended over the weekend, S9021A (Breslin), to include this agreed upon language. The Assembly bill that had already passed in that house was recalled and amended to match the Senate bill, A9407A (Weprin). The most significant change in the amended version of the legislation from the Senate bill that was first introduced is that a notification would now need to be provided at renewal and amendment, under certain circumstances, in addition to the notification at issuance and at least once a year under other specified circumstances.

The effective date is 180 days after the bill is signed with applicability to policies issued, renewed or modified after that date. We are in the process of analyzing the various new or modified requirements and welcome companies letting us know if there are aspects that could benefit from further clarity. Please contact Cassandra Anderson at canderson@nyia.org with questions or comments.

Legal Roundtable Key Takeaways

As many know, on March 21, 2024, NYIA presented a virtual roundtable focused on emerging trends in New York. This well received program featured defense and coverage attorneys from NYIA member firms, including Barclay Damon LLP, Debevoise & Plimpton LLP, Hoffman Roth & Matlin, LLP, Hurwitz Fine, PC, and the Mura Law Group, PLLC. As an additional benefit to members, these firms have put together some key takeaways from their presentations. Feel free to reach out to our presenters with any questions you may have on the topics that were discussed. A thank you to all who participated and presented.

Bills on the Move

Since our last Albany Update, most of the legislative activity has concerned the State Budget. Outside of that endeavor however, there have been a few notable bills that have either been reported from committee or have passed at least one house of the legislature. They are as follows.

S450 (Gianaris) – This bill would prohibit the imposition of different premium rates for disability insurance based on gender. It passed the Senate on April 16, 2024. It also passed the Senate last year. Its same as bill, A3781 (Glick), did not pass the Assembly last year and has yet to be considered by the Assembly Insurance Committee this year.

S760B (Liu) – This bill would prohibit reckless driving in parking lots. It passed the Senate on April 15, 2024. Its same as bill, A402B (Rozic), also passed the Assembly on April 15, 2024. It must now be delivered to the Governor for her consideration before the end of the year.

S1469 (Breslin) – This bill would modernize the insurance law by allowing insurers to take advantage of the Free Trade Zone regardless of whether or not they maintain a physical office in the state. It was reported to the Senate 3rd Reading Calendar from the Senate Insurance Committee on April 15, 2024 and passed the Senate last year. It is hoped that it will pass the Senate this year again. Its same as bill, A8212 (Weprin), is presently in the Assembly Insurance Committee. NYIA, who is in support of this legislation, is working diligently to try to get the Assembly Insurance Committee to consider this bill as well.

S3234A (Hoylman-Sigal) – This bill prohibits the exclusion of coverage based upon gender indication on claims forms. It was also reported to the Senate 3rd Reading Calendar from the Senate Insurance Committee on April 15, 2024, and passed the Senate last year. Its same as bill, A1682A (Woerner), was not considered by the Assembly last session and has not yet been considered this year by the Assembly Insurance Committee.

S3249 (Bailey) – This bill would require the installation of smoke detectors in common places of certain dwellings. It passed the Senate last year and again this year on April 3, 2024. It currently has no same as bill in the Assembly.

S4057 (Mannion) – This bill would promote the regulation and approval of homeowner natural disaster preparedness, home safety and loss prevention courses by the Department of Financial Services, and direct that DFS issue a Request for Proposal and request for state funding to effectuate the development and promotion of such courses. It was reported from the Senate Insurance Committee to the Senate Finance Committee on April 15, 2024. Its same as bill, A136 (Cruz), has never been considered by the Assembly Insurance Committee.

S5437 (Harckham) – This bill would impose an enormous, new regulatory mandate on all insurance companies, to investigate and assess, all aspects of potential climate change effects, and possible financial impacts on their customers and operations, and to accordingly produce an annual report, considering all possible business disruptions, out‐migrations, loss of income and higher default rates, supply chain disruptions, changes in investor and consumer sentiments, strategic plans, associated risks, and impact on balance sheets, together with the advancement of mitigation measures for all things contained within such report.

By its terms, this bill seeks to require New York insurance companies to become an investigatory, reporting and enforcement agency of state government, for one of the most complex and dynamic areas of all of American society, namely “Climate Change”. A term which this legislation never defines, and leaves open to the broadest standard of interpretations. It was reported from the Banks Committee to the Senate Insurance Committee on April 9, 2024. NYIA which is opposed to this legislation, issued a memo in opposition on this bill. It has no same as counterpart in the Assembly.

S6635 (Ramos) – This bill would make workers compensation awards to claimants for mental injury premised upon extraordinary work-related stress incurred at work. By its terms, this legislation would dramatically expand the class of employees who can file this type of claim, from simply police officers, firefighters, and EMTs, who have an extremely high stressed, public service profession, to now all employees, regardless of their type of work performed. It would further also transfer the burden of proof for such claims, onto the employer, thereby allowing work-related stress claims to be upheld, upon subjective allegations alone. Moreover, the term “extraordinary work stress” is left undefined, and amorphous by this bill, meaning that it would be very difficult to actually determine what “stress” is actually uniquely attributable to work, as compared to stress that is intertwined with the vagaries and vicissitudes of life, and intrinsically a part of the human condition. NYIA, which is opposed to this legislation, issued a memo in opposition on this bill. Its same as bill, A5745 (Reyes), has yet to be considered by the Assembly Labor Committee either last year or this year.

S6651 (Ramos) – This bill would include coverage of treatment rendered by a massage therapist, within claims for workers compensation. NYIA, which is opposed to this legislation, issued a memo in opposition on this bill. This bill presently has no Assembly same as bill.