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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.

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Albany Update 2023.12

December 4, 2023

In this issue …

NYIA Testifies at Assembly Hearing

NYIA recently testified at a hearing held by the New York State Assembly on Wednesday, November 29. The Assembly Insurance and Environmental Conservation committees jointly hosted a hearing on the topic of “The Resiliency of the New York Property and Casualty Insurance Market to Climate-Change Driven by Extreme Weather Events.” You can view NYIA President Ellen Melchionni’s testimony, which begins at 51:20 of the video. Each individual’s testimony can also be viewed by clicking on their name in the agenda available at the same link.

Melchionni indicated that rate adequacy is paramount. She urged lawmakers not to overreact to the current market conditions and instead take actions to support the market, including improving the challenging litigation environment and removing the immense regulatory burdens that exist. She offered insights about the states of Florida, Louisianna and California, and indicated that extreme weather alone did not cause the negative market conditions—the distress of the markets in those states has been exponentially intensified by a difficult litigation environment and regulatory restrictions.

Melchionni offered specific solutions to help with litigation costs and curbing lawsuit abuse, including creating lawsuit lending transparency, lowering the interest rate on judgments, and repealing the antiquated Scaffold Law and instead adopting a comparative negligence standard. She also indicated that appropriate fraud deterrents need to be in place and enforced.

She urged legislators to carefully evaluate any proposed laws that would have a negative impact on the market, and said it was imperative that no new mandates or restrictions be advanced. Melchionni also said that changes in the law were needed to expedite and modernize processes, including adopting online verification for auto insurance, repealing the antiquated anti-arson application and modernizing the free trade zone.

NYIA will continue to stress the importance of rate adequacy with regulators and legislators and strongly discourage any actions that will only result in a further deterioration of the market.

Governor Hochul Announces State of the State Address

Governor Kathy Hochul announced that the State of the State address will take place on Tuesday, January 9, 2024 starting at 1:00 p.m. Her address will be delivered in the Assembly Chamber. NYIA will be closely monitoring for any initiatives related to property and casualty insurance.

Another important release by the Governor in January will be the Executive Budget. We anticipate that the Governor will present her Executive Budget on or about Tuesday, January 16.

DFS Changes Requirements for Background Checks of Officers and Directors

Effective December 1, 2023, the New York State Department of Financial Services (DFS) withdrew Insurance Circular Letter No. 6 (2001). As a result, domestic and foreign property and casualty, life, and health insurance companies will no longer be required to submit fingerprints for the following:

• Officers, directors, and any controlling persons as part of a domestic primary licensure, redomestication, or corporate amendment application or a non-domestic licensure (expansion) application.
• Newly appointed officers and directors of an insurance company.
• Any person acquiring control of a domestic insurance company and any officers and directors thereof.

DFS has indicated that background checks required for any of the above must now include the following:

1. NAIC Biographical Affidavit
   The NAIC biographical affidavit (Form 11) must be completed for each officer and director and any controlling persons. The affiant must sign the affidavit within the six-month period before the application date.
2. Independent Third-Party Verification
   Biographical affidavits must be verified by an independent third-party that has been approved by the NAIC. See list of NAIC Independent Third-Party Vendors. Third-party verification reports must be sent directly from the approved vendor to the Department via the DFS Portal.

DFS has stated, as a reminder, that all insurance companies must use the NAIC Uniform Certificate of Authority Applications (UCAA) to submit their licensing applications. Questions related to licensing applications should be directed to the appropriate bureau:

• Property and Casualty: PropertyInsuranceCompanyLicensingUnit@dfs.ny.gov
• Health: HealthBureauRegulatory@dfs.ny.gov
• Life: electrofile@dfs.ny.gov

DFS Expands Use of the National Insurance Producer Registry

DFS has announced that they will be broadening their use of the National Insurance Producer Registry (NIPR), specifically to include the ability to process licenses for New York to include resident individual original and renewal license applications for life, accident & health, and property/casualty agents and brokers. Previously, NIPR processed non-resident broker and agent licenses for New York, with all resident broker and agent licensing applications being processed directly through the DFS licensing portal. DFS will also be keeping their licensing portal, so the industry will now have two options for licensing brokers and agents. This modification was expected as DFS asked NYIA for feedback about the potential change earlier this year.

In early 2024, DFS will implement NIPR for the remaining license classes, which includes resident and nonresident business entity and adjuster licensing. Please contact Rawle Lewis, director of licensing, at rawle.lewis@dfs.ny.gov with any questions.

Updates on DFS Amended Cybersecurity Regulation

Since its initial adoption, the cybersecurity regulation has required covered entities to report certain cybersecurity events to DFS within 72 hours of determining an event has occurred. Reportable events are those that impact the covered entity and require notification to another government body, self-regulatory agency, or other supervisory body, or those that have a reasonable likelihood of materially harming any material part of the normal operations of the covered entity. Beginning December 1, 2023, covered entities also are required to notify DFS if (1) ransomware has been deployed on a material part of its information systems, or (2) a ransom or extortion payment has been made. The notification process for reporting such an event through the DFS portal remains the same and there are detailed instructions on reporting a cybersecurity incident or extortion payment.

Also, as a result of updates to eligibility parameters, DFS believes more businesses should now qualify for full and limited exemptions from the regulation’s requirements. Covered entities that qualify for an exemption should submit a notice of exemption within 30 days of making that determination through the DFS portal. Instructions on applying for or amending a notice of exemption and additional exemption qualification information are available on DFS’s Cybersecurity Resource Center under the heading of Part 500 Exemptions.

In addition, NYIA is hosting a complimentary virtual education program with the New York State Department of Financial Services (DFS) about the amended cybersecurity regulation. This program, which is specifically geared to property and casualty insurance companies, will take place on Monday, December 18, 2023 from 2:00–3:00 p.m. (ET). Featured speakers from DFS will provide property and casualty insurers with insights about the new cybersecurity requirements in the Second Amendment to 23 NYCRR 500. Be sure to register to hear directly from DFS and gain a greater understanding of the key changes as companies begin their work to be in compliance with the new provisions. The program will provide a comprehensive overview of the amended regulation as well as help companies prepare for the first major compliance deadline of April 15, 2024.

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Albany Update 2023.11

November 13, 2023

In this issue …

DFS Adopts Cybersecurity Regulation

As NYIA previously announced, DFS has promulgated the final amended regulation of 23 NYCRR 500, Cybersecurity Requirements for Financial Services Companies. The amendments are robust and will require companies to make adjustments for how they approach cybersecurity and compliance with the regulation, NYIA was pleased to see that the final version is substantially better than the previously proposed versions. Thank you to the many companies that provided subject matter expertise to NYIA during this process and shared feedback on the various adaptations of the proposal.

In addition to the panel discussions held last week at NYIA’s Annual Meeting, the association will be partnering with DFS to hold an education program for the entire property and casualty industry on December 18 from 2:00 to 3:00 p.m. Information on how to register will be distributed in the near future.

The regulation took effect immediately on November 1, 2023, but the default date for entities to be in compliance is 180 days from the effective date. The only provisions that immediately took effect are in relation to exemptions (500.19 (e)-(h)), enforcement (500.20), effective date (500.21), transitional periods (500.22) and exemption from electronic filing and submission requirements (500.24). Covered entities need to comply with notices to superintendent (500.17) in 30 days. There are also transition periods for certain provisions of one year, eighteen months and two years.

In an effort to help companies digest this amended version of the regulation, below is a list of resources. We will also be distributing a document that provides further analysis about the changes and expands on what DFS provides in the New York State Register.

Final Adoption of the 2nd Amendment to 23 NYCRR 500
Substance of Final Rule (as it appeared in New York State Register, this provides a detailed list of what is new in the amended regulation)
DFS Assessment of Public Comments
Governor Hochul Media Release
DFS General Education on the Amended Regulation (scroll to Training Resources)
Implementation Timeline for Small Businesses
Implementation Timeline for Class A Businesses
Implementation Timeline for Covered Entities

NYIA Meeting on Expansion of Wrongful Death Legislation

As part of the association’s continued advocacy on the wrongful death legislation, NYIA recently met with the Governor’s office. Our main objectives for the meeting were to articulate our concerns regarding the substantial impact of the legislation on our policyholders from an affordability standpoint as well as ultimately on the availability of insurance, particularly given that the market is already stressed. NYIA also cautioned the Governor’s office about the finality of any action to expand wrongful death as a constitutional provision (Article I, Section 16) prohibits limiting the law in the future. The association is in the process of drafting a legal analysis of this provision per the request of the Governor’s office. We will keep members informed on any further developments.

Meeting with DFS on Expanded Life and Health Guaranty Fund

NYIA met with DFS late last week on the issue of the inclusion of health in what is now the Life and Health Insurance Company Guaranty Corporation of New York. DFS was looking to meet specifically in relation to property and casualty insurance companies who are licensed to write accident and health policies.

The guaranty corporation recently reached out to all companies who are licensed in New York to write life or health, including property and casualty companies that are licensed to write accident and health. This outreach was in relation to what is called a class A assessment, which is paid by all companies who are licensed to write life or health, even if they do not have any premium The assessment is based on the companies admitted assets, and as is outlined in New York Insurance Law 7709, companies with admitted assets of up to $50 million are assessed $200, $50 million to $1 billion are assessed $1,000 and $1 billion or more $2,000. The class A assessments are used for administrative costs and other general expenses of the guaranty corporation. DFS indicated there was a great deal of confusion around that communication as it was sent from an Outlook address and not all companies were familiar with their connection to the guaranty corporation.

DFS confirmed that any class B or class C assessments that would relate to an actual insolvency, would only be assessed on a property and casualty insurance company in relation to their accident and health insurance premiums. Property and casualty companies that do not actively write health insurance in the preceding three years will not be assessed. These assessments will be based on the average premium written over the past three years and determined on a pro rata basis.

DFS has encouraged the guaranty corporation to include an FAQ on their website, but has asked for NYIA to share this information in the meantime. If you have any questions about how this expanded life and health guaranty fund impacts property and casualty insurance companies, contact Cassandra Anderson at canderson@nyia.org.

DFS Adopts Amended Regulation on Financial Statement Filings and Accounting Practices and Procedures

On November 1, 2023 DFS adopted the final seventeenth amendment to the insurance regulation 172 (11 NYCRR 83), regarding financial statement filings and accounting practices and procedures. There were no changes made in this final version from the proposed amendment that was put forward by DFS on August 2 as a consensus amendment regulation. The amendment updates the Accounting Practices and Procedures Manual reference, which is cited in this regulation. Previously the regulation referred to the 2021 edition of the manual, and the amended regulation now references the 2023 edition of the manual. There are no other changes in the regulation that would impact property/casualty insurance companies (there is a small change for health insurers).

WCB Releases 2024 Assessment Rate

The New York State Workers Compensation Board (WCB) recently established the 2024 assessment rate for employers. The rate as of January 1 is 9.2 percent of the standard premium or premium equivalent. The rate for 2024 is .6 percent less than the rate in 2023, which is 9.8 percent.

DFS Releases Public Auto Data Call

DFS has issued a section 308 data request to commercial automobile liability insurers covering public automobile classifications. DFS states that the purpose of the data call is “To ensure that appropriate insurance coverage is available and affordable, and to promote the long-term viability of entities providing public livery insurance in New York, the Department continues to monitor issues and developments affecting this market.” The survey has been sent to companies with commercial auto premium in 2022 and requests detailed information about the number of policies and direct premiums written for all public auto classifications for a company as well as any intended rate revisions or changes to the current level of writings in the immediate future. The survey is due by December 20, 2023. Questions can be directed to 308PublicAuto@dfs.ny.gov.

Guilty Plea in One of New York’s Largest No-Fault Insurance Frauds

Alexander Gulkarov, a 37-year-old man from Queens, pled guilty to co-leading a massive no-fault scheme as recently announced by the U.S. Attorney’s Office, Southern District of New York. The arrests of Gulkarov and 12 conspirators, including doctors, an attorney, and an NYPD police officer was made public in early 2022. The U.S. Attorney’s Office said the fraud was perpetrated from 2014 to 2021 through Gulkarov and others unlawfully owning medical clinics, profiting from unlawfully owned pharmacies with the prescription of unnecessary medical treatments, durable medical equipment and medications. Gulkarov pled guilty to one count of conspiracy to commit bribery, one count of conspiracy to commit healthcare fraud and one count of aggravated identity theft. As part of his plea agreement Gulkarov agreed to pay forfeiture of $40 million and restitution of $40 million.

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Albany Update 2023.10

August 14, 2023

In this issue …

Governor Announces Appointment of Deputy Secretary of Finance and Technology

Governor Kathy Hochul officially named Albert Pulido, a former citywide operations director for the New York City mayor’s office, where he was responsible for overseeing the City’s technology programs, as the state’s new deputy secretary of finance and technology.

While at the city, in addition to his work on their technology portfolio, Pulido also was responsible for citywide payroll, records management, procurement, and real estate operations. Among his accomplishments in that role, included the modernization of the City’s technical infrastructure and the expansion of access to high speed internet.

In his new role in state government, Deputy Secretary Pulido will be charged with overseeing government operations and policy management for several departments, including the Department of Taxation and Finance, the Department of Financial Services, the Office of Information Technology Services, and the New York State Insurance Fund. He will also be coordinating technology across the state government, including with the office of Governor’s counsel, the state’s chief cyber officer and various executive agency boards.

A critical new player in the area of the state’s financial services regulatory team, Deputy Secretary Pulido is now charged with creating, updating, modernizing, drafting and reviewing, programs and initiatives, related to all aspects of financial services, tax and technology. He will also be responsible for consulting with non-government organizations as well.

It has been said, that to carry out his new mission, Deputy Secretary Pulido, will now also have a key role in the development and administration of executive agency regulatory action, in all areas of financial services, tax and technology. In the chain of command, he will report to the state’s director of operations and infrastructure, Kathryn Garcia.

Pulido is a graduate of Cornell University, where he holds a bachelor’s degree, and of the University of Iowa, where he earned his master’s degree. A first generation Peruvian-American, he is the proud father of two young boys.

DFS Adopts Excess Line Placement Governing Standards

The Department of Financial Services (DFS) announced on July 12, 2023 the final adoption of Regulation 41 (11 NYCRR 27) concerning excess line placement governing standards.

The final regulation adds donor medical expense insurance and excess business disability insurance to the types of insurance that are authorized for excess coverage, and provide, that when such excess coverage is issued, that the excess line broker must identify each authorized insurer declining to issue or renew the coverage and the date of each declination.

The Department of Financial Services originally proposed this regulation back on April 19, 2023, when they published it in the State Register, as a proposed, consensus rule for the 17th amendment to Regulation 41 concerning Excess Line Placements.

DFS Proposes Consensus Amendment to Financial Statement Filings and Accounting Practices and Procedures

 On August 2, 2023, the Department of Financial Services (DFS), proposed a new, consensus amendment regulation, regarding financial statement filings and accounting practices and procedures.

The new proposed, amended regulation, would amend Regulation 172 (11 NYCRR 83), to update the Accounting Practices and Procedures Manual reference, which is cited in this regulation. Presently, such regulation refers to the 2021 edition of the manual, and this new, proposed regulation, would now reference the 2023 edition of the manual. No other changes are made in this new, proposed regulation that would impact property-casualty insurers (there is a small change for health insurers).

The public comment period for this new, proposed, consensus regulation will expire on October 2, 2023. If you have comments you would like NYIA to submit on your behalf, please contact Bob Farley at bfarley@nyia.org by September 27, 2023.

Gothamist News Stories Spur Legislative Activity on Affordable Housing

The Gothamist, a New York City based online only publication, recently ran two articles on the alleged interaction between the lack of affordable housing and the cost of insurance. The first story focused on the topic itself and then there was a follow up article regarding legislative activity in relation to the issue. Both stories are factually challenged, and clearly advocacy motivated, but have nonetheless caused a vocal and visceral reaction among certain affiliated legislators and advocacy groups.

As affordable housing is indeed a serious issue facing our state, albeit not for the reasons claimed in these articles, nor because of the insurance industry, it is not likely to disappear as a major issue any time soon. As we have reported previously, we believe this is an issue we will be confronting this upcoming year to an even greater extent than during this year’s session.

NYIA is currently working to develop a comprehensive strategy in relation to this issue in an effort to strongly seek to present the correct facts and circumstances surrounding it, so as to do all we can, to prevent a mischaracterization of both the actual facts and necessary solutions, regarding this problem. The lack of affordable housing is NOT caused by insurers nor insurance.

Indeed, many of the proposals suggested in these Gothamist stories, could actually make the problems that do exist worse. For if the Gothamist advocated responses were ever actually implemented, it could dramatically impact the availability of insurance. A limited, artificially restricted insurance market helps no one, and would compound the current issues of safe, affordable housing even more than it is now, making a seriously bad problem in our state, worse than it is now, on many levels.

NYIA will continue to advocate toward positive, thoughtful, and effective solutions to this problem, and will continue to keep you, our members, informed.

Buffalo News Highlights Change in Supplemental Spousal Liability Law

An August 10 Buffalo News article highlighted the serious issues with the recent change in New York’s supplemental spousal liability law. The amended subdivision (g) of section 3420 of the New York State Insurance Law, which was strongly opposed by NYIA, took effect on August 1, 2023, was criticized by the Buffalo News for its arduous ineffectiveness and lack of public benefit.

The Buffalo News suggested that this new law, which will sunset on July 31, 2027, requires half the state’s driving population to be automatically enrolled in coverage from which it would not benefit (unless the driver opts out of the coverage). The article indicated that this new law would impose an estimated annual $84 million cost on New York drivers.

The article further specifies that the bill, that created this new law, was a priority of the state’s trial bar lobby, and that they are the ones, who principally pushed for its enactment. This new law, which took effect just last week, as aforementioned, is yet another example, of the pile of destructive and hurtful bills that NYIA must annually face from the trial lawyers.

The reporter is indicated a continued interest in this topic and would like to know if the industry is receiving complaints from customers. Please contact Cassandra Anderson at canderson@nyia.org if you have feedback you would like to share.

Governor Hochul Announces Special Election 27th Assembly District

Governor Kathy Hochul has announced that a special election will be held to fill the vacancy in the 27th Assembly District, created by the resignation of Assemblyman Daniel Rosenthal, on Tuesday, September 12, 2023.

Rosenthal, who was a member of the Democrat Majority, and a member of the Assembly Insurance Committee, announced his resignation from office in June, to begin a new role as vice president for Government Relations for the UJA-Federation of NY, the largest philanthropy organization in the world.

The 27th Assembly district is located in Central Queens. A heavily-Jewish based community, it includes the neighborhoods of Pomonok, Electchester, Kew Gardens Hills, College Point and Whitestone.

While on the Insurance Committee, Assemblyman Rosenthal distinguished himself with a thorough understanding and appreciation of insurance and financial issues and was a champion of several modernization initiatives.

WCB Releases New Inpatient Hospital Rates

On August 7, 2023, the New York State Workers Compensation Board announced new and revised inpatient hospital rates for Acute Per Case Inpatient Rates, Exempt Hospitals, Exempt Units, and Detoxification Rates. WCB provided updated rates for April 1, 2022 through December 31, 2022 as well as rates for the period of January 1, 2023 through December 31, 2023. These rates of course impact auto personal injury protection in addition to workers compensation.

NYSIF Launches Mental Wellness in the Workplace

The New York State Insurance Fund (NYSIF), the state’s largest workers’ compensation insurer, and one of the 10 largest nationwide, announced a new campaign to raise awareness of mental wellness, as an essential component of workplace health.

NYIA took note of the NYSIF’s reported goal with the campaign is to help all employers, including those who are not NYSIF policyholders, create an employee mental wellness action plan, by marshalling information from multiple sources. According to NYSIF executive director and CEO Gaurav Vasisht, it is the intention of the NYSIF campaign to empower employers with strategies to reduce mental health stigmas, encourage open dialogue between supervisors and employees, and offer guidance on self-care and resiliency. Under this new campaign, interested companies can access, customize, and download their action plan on the NYSIF website.

In their launch of this campaign, NYSIF cited recent workplace surveys that reinforce the importance of mental wellness for employers, including one such survey, which found that 81 percent of U.S. workers, believe that how employers support their employees’ mental health will be an important consideration when they seek future job opportunities.

Non-Compete Bill Raises Workforce Issues

During the last month of the legislative session in Albany, both the New York State Assembly and the New York State Senate, passed a sweeping bill (A1278B Joyner/S3100A Ryan) that, if signed into law by Governor Hochul, will effectively ban all future, non-compete agreements.

This bill, which has yet to be delivered to the Governor for her signature, if signed, would have New York join California, North Dakota, Oklahoma, and Minnesota, in implementing a complete prohibition on all non-compete agreements.

Specifically, the bill, would add a new Section 191-d to the Labor Law, to prohibit employers, related persons and entities, from seeking, requiring, demanding, or accepting a non-compete agreement from any covered individual.

This section would further render void, every contract to the extent “anyone is restrained from engaging in a lawful profession, trade, or business of any kind.”

The bill would become effective 30 days after the Governor signs it, but due to constitutional limitations regarding the sanctity of contract, would apply only to prospect agreements entered into, or modified on or after, it this bill becomes law.

More specifically, this bill defines a non-compete agreement as “any agreement, or clause contained in any agreement, between an employer and a covered individual that prohibits or restricts such covered individual from obtaining employment, after the conclusion of employment with the employer included as a party to the agreement.”

A covered individual would further be defined as any “person who, whether or not employed under a contract of employment, performs work or services for another person on such terms and conditions that they are, in relation to that other person, in a position of economic dependence on, and under an obligation to perform duties for, that other person.”

Notably, this definition includes not only employees, but also independent contractors.

The bill does provide a carveout for “fixed term of service,” non-disclosure, and/or client non-solicitation agreements, provided that such agreement does not otherwise restrict competition in violation of Section 191-d.

Perhaps worst of all, this bill also contains a private right of action, with mandatory liquidated damages of up to $10,000. A covered individual may bring a civil action within two years of the later of the date when:

• the non-compete was signed;
• the covered individual learned of the non-compete;
• the employment or contractual relationship is terminated, or
• the employer takes any step to enforce the non-compete.

As seen in other states, this bill will present serious impediments with respect to the employee/ employer, as well as the contractor/independent contractor relationship. It also raises significant concerns with respect to business investment, good will protection, and intellectual property issues. Moreover, because of its interference with traditional abilities of parties to freely enter into contracts, it also raises constitutional questions.

It is presently unknown what the Governor thinks of this bill, or whether she intends to sign it. Passing both houses by wide margins (95-52 in the Assembly and 40-21 in the Senate), it does enjoy the vocal, political support of progressive legislators. Many business, employer and commercial groups on the other hand, have weighed in their opposition.

Although this bill does not directly impact insurance, it does certainly affect business operations, including in the insurance industry. Accordingly, it is important that insurance companies, as well as agents and brokers, have this issue on their radar screen, and be prepared for what impact it might have upon them.

If you have feedback you would like to share with NYIA about this legislation, please contact Bob Farley at bfarley@nyia.org.