Albany Update 2023.13

KNOW BETTER NEW YORK CONNECTIONS

Albany Update 2023.13

December 20, 2023

In this issue …

Bills of Interest

Bills on the Governor’s Desk:

Presently, there are 89 bills on the Governor’s Desk, awaiting her signature or veto.

All of these 89 bills were delivered on December 12, 2023, meaning that the Governor has 10 days, exclusive of Sundays to consider them (and they must therefore be signed or vetoed by Saturday, December 23, 2023 at 11:59 p.m.).

Of these 89 bills, NYIA is tracking six, which present an interest for our insurance industry. These six bills include:

A5646A (Cook)/S5591A (Comrie) – Severely Restricts the Use of Collateral Estoppel for Arbitrations
NYIA opposes this bill, has recommended a veto, and issued a memo in opposition and put forward chapter amendments to improve the bill in consultation with the Auto Writers Working Group.

A4668B (Weprin)/S5764B (Breslin) – Requires Verification of Driving History When Used as a Rating or Underwriting Factor – (MVR).
NYIA opposes this bill, has recommended a veto, issued a memo in opposition, and has engaged in chapter amendment discussions to improve the legislation given the Governor’s indication they were going to sign the legislation.

A7351 (Weinstein)/S7476 (Hoylman-Sigal) – Provides that a foreign corporation’s application for authority to do business in this state constitutes consent to jurisdiction of the courts of this state.
NYIA opposes this bill, has recommended a veto, and issued a memo in opposition.

A1178 (Jacobson)/S439 (Skoufis) – Requires Bodily Injuries be Covered under Supplementary Uninsured/Underinsured Motorist Coverage for Police Vehicles
NYIA has not taken a position on this legislation this session.

A1278B (Joyner)/S3100A (Ryan) – Prohibits the use of non-compete clauses in most employment contracts
NYIA has been working through the business community on this legislation, and understand negotiations continue to be underway.

A5294 (Anderson)/S4862 (Comrie) – Establishes a Captive Insurance Program for Commuter Vans under the Insurance Law, and establishes a Commuter Van Trust Fund in the State Finance Law
NYIA has been tracking this legislation and has not taken a position.

Bills Awaiting Delivery to the Governor:

There are presently six bills that have yet to have been delivered to the Governor. NYIA is tracking two of these six. If these bills are not delivered to the Governor’s desk prior to December 21, 2023, then she will have 30 days to consider whether to sign or veto the same. These two bills include:

A2078 (Stern)/S5201 (Skoufis) – Establishes Standards for the Prompt Investigation and Settlement of Claims Arising During States of Emergencies
NYIA opposes this bill, has recommended a veto but the Governor’s office made clear from the outset that they were looking to do chapter amendments, issued a memo in opposition, and has engaged in discussions on chapter amendments to improve this legislation.

A6698 (Weinstein) / S6636 (Hoylman-Sigal) – The Wrongful Death Expansion Act.
NYIA strongly opposes this bill, has recommended a veto, and issued a memo in opposition.

Additionally, after serious verbal discussions, NYIA produced and provided to the Governor’s Counsel’s office, a Memo of Law expressing serious potential constitutional concerns regarding this legislation and have urged the Governor to veto the current legislation.

DFS Circular Letter on Supplemental Spousal Liability Insurance

On December 18, the New York State Department of Financial Services (DFS) issued a Circular Letter on the issue of Supplemental Spousal Liability Insurance.

The stated purpose of the circular letter was to advise all insurers authorized to write motor vehicle insurance in New York State, the New York Automobile Insurance Plan, rate service organizations, and licensed insurance producers, of the amendments to made to section 3420 of the Insurance Law under Chapter 735 of the Laws of 2022 and Chapter 108 of the Laws of 2023 regarding supplemental spousal liability (SSL) insurance. The circular letter largely reiterates the position DFS previously provided the industry verbally.

This circular letter replaced a previous Insurance Circular Letter No. 23 (issued in 2002), which has been withdrawn.

According to this circular letter, Section 3420 of the Insurance Law defines SSL insurance as: “coverage for the liability of an insured because of death of, or injury to, the insured’s spouse up to the liability insurance limits provided under the policy even where the injured spouse, to be entitled to recover, must prove the culpable conduct of the insured spouse.”

This circular letter provided a range of guidance, including stating that SSL insurance, which applies to all motor vehicles covered under the policy, only covers a spouse, and not a person with whom the insured has a domestic partnership or civil union. This is because a domestic partner or a person in a civil union would be covered under the liability section of the motor vehicle policy.

DFS amended 11 NYCRR 60-1 (Insurance Regulation 35-A) to conform to the amendments made by the legislation mandating for SSL coverage. These statutes and the amended regulation apply to all policies issued, renewed, or modified on or after August 1, 2023, and to all insureds, regardless of marital status or whether the insured is a business entity or natural person. The statutes and regulation do not apply to umbrella liability insurance policies or for-hire motor vehicle liability policies.

The circular letter further asserted that it has come to the DFS’s attention that some insurers are not specifying a premium for SSL insurance or permitting a named insured to decline the insurance with an appropriate premium reduction. According to DFS, an insurer must specify the premium for SSL insurance, and must provide an appropriate premium reduction when a named insured declines the SSL insurance.

If you have questions on the circular letter you would like to direct to DFS you can email autounit@dfs.ny.gov.

Senate Hearing on Affordable Housing

The New York State Senate has informed NYIA that they will conduct a public hearing on the issue of affordable housing, which will most likely also draw a focus on concerns of the rising cost of property insurance, and how such affects the cost of housing in New York.

The hearing, which is presently scheduled for January 24, 2024, but has yet to be publicly announced, would be a joint hearing between the Senate Standing Committee on Insurance and the Senate Standing Committee on Housing.

The hearing’s purpose will be reportedly to examine the costs of insurance premiums and availability of insurance coverage for developing and operating affordable housing, with a focus on three bills:

S7298 (Kavanagh)/A7910 (Weprin) – Prohibits insurance underwriting and rating practices that would have the effect of discriminating against affordable residential buildings and construction projects
This bill seriously mischaracterizes the practice of underwriting for identifiable harmful risk factors on dilapidated, dangerous properties, as discriminating against affordable housing. Sadly, this seriously flawed and misplaced bill, has been the legislation upon which most of the media and housing advocates have focused, in this discussion of insurance and affordable housing. The result could be serious insurance availability issues.

S7473 (Bailey) – Prohibits Property Casualty Insurers from Discrimination
This bill also seriously mischaracterizes the practice of underwriting for identifiable harmful risk factors on dilapidated, dangerous properties, as discrimination. The bill prohibits a wide range of underwriting and rating factors and is not specific to affordable housing and instead applies broadly to property and casualty insurance. As drafted the bill would prohibit the following list of factors: “age, marital status, sex, sexual orientation, education background or educational level attained, employment status or occupation, income level, consumer credit information or score, ownership or interest in real property, location, type of residence, including but not limited to single-family home, multi-family home, apartment, housing subsidized by state and/or federal programs, or any other residence type, or any indication of a consumer’s price elasticity of demand.” There are incredibly serious concerns about the profound impact of the legislation, including insurers immense insurance availability issues.

S7631 (Sanders)/A7944 (Rosenthal) – This bill would provide that the cancellation, refusal to issue or renew, increase in premium or restriction of coverage, based on the acceptance of rental subsidies, would be an unlawful discriminatory practice under the executive law.
This bill has similar language as what was used in the legislation that would ban the use of dog breed in underwriting and rating, “cancel, refuse to issue, refuse to renew, or increase the premium of a policy or exclude, limit, restrict or reduce coverage of a publicly-assisted housing accommodation due to lawful source of income.” It is a seriously flawed concept which would target insurers to enormous litigation exposures, and like the above bill, possibly result in serious insurance availability issues.

NYIA will keep members informed about any further developments with this planned hearing.