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Albany Update 03.12.24

In this issue …

NYIA Hosting Meeting on Cybersecurity Regulation Implementation

NYIA will be holding a meeting for members to discuss issues related to implementation of DFS’s amended cybersecurity regulation through the association’s Information Security Advisory Group. The meeting will be held virtually on Tuesday, March 26 from 2:00–3:00 p.m. You can add the meeting to your calendar. We encourage you to share this invitation with your company’s subject matter experts. Please contact Cassandra Anderson at canderson@nyia.org with any topics you would like raised. An agenda will be sent out closer to the meeting date.

DFS Releases Pre-Proposed Amended Regulation Related to Group Capital Calculation

The New York State Department of Financial Services (DFS) recently released a pre-proposed third amendment to 11 NYCRR 82 (regulation 203), which pertains to Enterprise Risk Management and Own Risk Solvency Assessment; Group-Wide Supervision. The amendment is due to the group capital calculation (GCC) legislation advanced last year and relates to the GCC filing process, which indicates that the calculation shall be submitted electronically. The pre-proposed regulation also details when an entity would be exempt from the filing, able to submit a limited group capital filing, needs to submit an annual GCC as well as provides parameters around “recognize and accept” for non-United States jurisdictions. Comments can be submitted to Joana Lucashuk by email at joana.lucashuk@dfs.ny.gov by Thursday, March 14. If you have comments you would like NYIA to submit on your behalf, please contact Bob Farley at bfarley@nyia.org by Wednesday, March 13.

DFS Announces Funds Provided to Consumers and Health Care Providers

DFS recently announced as part of National Consumer Protection Week that the agency in 2023 collected more than $182 million, with $158 million recovered for consumers and health care providers and $23 million in restitution from enforcement actions. In their media release DFS issued they continue to tout their consumer protection and enforcement roles and highlight how a consumer can file a complaint with the department.

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Albany Update 02.08.24

In this issue …

Wrongful Death Bill Reintroduced

This week the New York State Senate introduced S8485 which provides for the types of damages that may be awarded to the persons for whose benefit an action for wrongful death is brought. This bill, which has yet to have been introduced in the Assembly, is identical in text to the 2023 bill that was vetoed by the Governor in December.

Since the new bill introduced by Senator Hoylman-Sigal is the same as the bill that was vetoed, the arguments NYIA made seeking a veto last year remain relevant and important. You can view NYIA’s letter and memo of law NYIA submitted to the Governor last year. NYIA will continue its efforts to strenuously oppose this very ill-conceived and hurtful bill.

Bills on the Move

A8942 (Weprin)/S8167 (Breslin) – This bill would direct the department of financial services to conduct a study examining private flood insurance. It was reported from the Senate Insurance Committee and advanced to the Senate Third Reading Calendar on January 24. It has yet to be considered in the Assembly.

A8500 (Weprin)/S8018 (Breslin) – This bill would provide a chapter amendment to last session’s bill concerning verification of an applicant’s New York State driving history when used as a rating or underwriting factor for private passenger motor vehicle insurance. It passed the Assembly on January 16, passed the Senate on February 7 and is awaiting delivery to the Governor.

A8503 (Jacobson)/S8030 (Skoufis) – This bill would provide a chapter amendment to last session’s bill concerning supplementary uninsured and underinsured motorist coverage for police agencies. It passed the Assembly on January 16, passed the Senate on January 24 and was signed by Governor Hochul on February 7 as Chapter 30.

A7820 (Jean-Pierre)/S5757 (Scarcella-Spanton) – This bill would establish the position of an insurance liaison on the disaster preparedness commission. It was reported from the Senate Committee on Veterans and Homeland Security on January 24 and passed the Senate on February 7. It has yet to be considered by the Assembly Governmental Operations Committee.

S365B (Thomas) – This bill would enact the New York Privacy Act. It was reported from the Senate Committee on Consumer Protection to the Internet and Technology Committee on February 6. There is not a current same as bill in the Assembly.

DFS Issues Emergency Regulation on SUM for Certain Police/Emergency Vehicles

On February 1 the New York State Department of Financial Services (DFS) filed an emergency 11th amendment to 11 NYCRR 60.2 (Insurance Regulation 35-D) regarding supplementary uninsured/underinsured motorist coverage with respect to certain police and emergency vehicles. The emergency regulation is scheduled to appear in the State Register on February 21. DFS also released additional documentation in relation to the emergency regulation. This regulation became necessary upon the enactment of Chapter 30 of the Laws of 2024, A8503 (Jacobson)/S8030 (Skoufis), which mandated the inclusion of this coverage for certain police and emergency vehicles.

New NYS Credit Card Surcharge Law Takes Effect

On December 13 Governor Kathy Hochul signed into law Chapter 723, A2672B (Paulin)/S1048A (Cooney), which amended Section 518 of the general business law to prohibit all sellers in a sales transaction from imposing a credit card surcharge on any customer unless such seller clearly posts the price of the credit card surcharge, at the location where the sale occurs, together with the final sales price of such sales transaction, inclusive of the surcharge. According to this new law, every violation will subject a seller to a fine of $500 (for each noncompliant transaction). The new law takes effect 60 days after it was chaptered, which is February 11, 2024. In accordance with this new law, on February 6 the New York State Department of State issued Credit Card Surcharge Guidance to help assist sellers with its requirements. Examples of violations were also published by the Department of State along with an educational video.  The Business Council of New York State is offering a webinar on the new law with the Department of State on February 15 from 1:00 to 2:00 p.m. NYIA members are able to attend at no charge but pre-registration is required.

New DOS Regulation on Telemarketing

On February 7 the New York State Department of State adopted a new regulation (19 NYCRR Part 220) with respect to their oversight on telemarketing. The new regulation can be found starting on page 13 of the linked document. This regulation is now in full force and effect.

This new regulation was made in accordance with section 399-z of the general business law and specifies: the legal authority to transfer telephone numbers to the federal registry; several definitions in accordance with 399-z, including consumer, established business relationship, goods and services, hearing, knowingly, and telemarketer; violations; and enforcement practices.

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Albany Update 01.24.24

DFS Proposes Circular Letter on Artificial Intelligence and External Consumer Data

On January 17 DFS issued a proposed circular letter, to all insurers authorized to write insurance, all licensed fraternal benefit societies, and the New York State Insurance Fund, on the use of “Artificial Intelligence Systems and External Consumer Data and Information Sources in Insurance Underwriting and Pricing.”

By its terms, this letter defines Artificial Intelligence Systems (AIS) and external consumer data and information sources (ECDIS), and provided that all insurers should not use ECDIS or AIS for underwriting or pricing purposes, unless they can establish that the data source or model, as applicable, does not use and is not based in any way on any class protected pursuant to Insurance Law Article 26, and that they should further not use ECDIS or AIS for underwriting or pricing purposes, if such use would result in, or permit, any unfair discrimination or otherwise violate the Insurance Law, or regulations promulgated thereunder.

There is a corresponding 60-day comment period, which means comments are due by March 17 to DFS at innovation@dfs.ny.gov. If you would like NYIA to submit feedback on this proposed circular letter on your behalf, contact Bob Farley at bfarley@nyia.org by Wednesday, March 6. NYIA will also be scheduling a meeting to discuss the proposed circular over the coming weeks and encourage companies to include your subject matter experts. We will be sending a notice with the meeting details in the near future.

DFS Testifies at Budget Hearing

New York State Department of Financial Services (DFS) Superintendent Adrienne Harris presented testimony to the Senate and Assembly at the budget hearing yesterday, January 23. In her testimony, the superintendent highlighted the transformation of the department over her two year tenure, including her championing of initiatives to make DFS more data driven, and the development of a strategic plan of “policy, process and people.” You can view DFS’s written testimony as well as a recording of the hearing.

When it comes to personnel resources, Superintendent Harris touted the fact, that since her initial appointment, DFS has hired 336 new team members, promoted 309 existing personnel, and has significantly expanded their network of collaborative partners, including advocates, industry leaders, legislators and regulators. During the question period the superintendent indicated that if DFS could hire more staff the agency would be able to better address the backlog that exists.

The superintendent also focused on the several DFS led policy initiative contained last week in Governor Hochul’s proposed budget and Article VII legislation., including Part FF of the Transportation, Economic Development and Environmental Conservation Bill (A8806/S8306). This measure would prohibit insurance companies from inquiring on an application, canceling, refusing to issue, refusing to renew or increasing the premium of a policy based on the level or source of income of tenants, on any affordable housing property.

Senate Insurance Committee Advances Two Bills

On Monday, January 22, the Senate Insurance Committee advanced two bills related to property and casualty insurance. These bills included S8167 by Senator Breslin, which would direct DFS to conduct a study on the factors impacting the cost and availability of flood coverage as well as analyze the possibility of supporting a private flood insurance market. NYIA is neutral on the legislation as it is a study bill.

The second bill, S8320A by Senator Mayer, would expand the properties required to be contained in the coastal market assistance program (C-MAP) to include all properties in New York that are located within one mile of the shore.  These “shore” properties would be defined as properties located along a salt-water ocean, sound, bay, inlet, or Lake Erie, Lake Ontario, the Saint Lawrence River or the Niagara River. The one-mile distance would be measured from mean high-water mark of such waterways. If your company has feedback on this legislation, please contact Bob Farley at bfarley@nyia.org.

Both of these bills were reported from the Insurance Committee to the Senate Calendar.

DMV Proposes Regulatory Amendment Related to RRGs

As was announced on the last bi-weekly call, the New York State Department of Motor Vehicles (DMV)  issued a proposed regulatory amendment (refer to page 3 of the document) to expand the definition of insurance company, to include certain risk retention groups (RRGs), with respect to automobile insurance. This proposed regulation is in response to a bill signed at the end of 2023, and a corresponding chapter amendment that has now passed both houses, S8053 (Webb)/A8505 (Kelles) which authorizes RRGs to write auto insurance for certain nonprofit organizations.

There is a corresponding 60-day comment period with this proposed regulation, which means comments are due by March 17 to DMV at dmv.sm.legal@dmv.ny.gov. If you would like NYIA to submit feedback on this proposed regulation on your behalf, please contact Bob Farley at bfarley@nyia.org by Wednesday, March 13.

WCB Releases 2024 Regulatory Agenda

On January 24 the New York State Workers Compensation Board (WCB) released its 2024 Regulatory Agenda. WCB is considering proposing regulations to amend section 442.2 to update the DME Fee Schedules, amend section 329-1.3 to update the Medical Fee Schedule(s), amend section 441.2 to update the NY Workers’ Compensation Formulary, implement the performance standard referenced in Workers’ Compensation Law section 13-a(6)(b)(i), add a new section 329-1.4 regarding when Intraoperative Neurophysiological Monitoring (IOM) as appropriate, and proposals in support of OnBoard. NYIA will of course keep our members informed on any developments with these proposals.

WCB Launches Online Injured Worker’s Toolkit

WCB has posted on its website, a new suite of tools and information for injured workers known as the Injured Worker’s Toolkit. This web-based resource posts information about the role of WCB, workers compensation benefits, including medical care, lost wages, and survivor benefits. This tool kit also offers suggestions to injured employees on what they should do following a work-related accident or illness including information about legal representation, how the claims process works and workers compensation board support services. It lastly offers information, resources and sections for injured employees seeking to return to work, frequently asked questions, a definition of terms, and forms.

Senate Releases Analysis of Executive Budget

The New York State Senate has released its annual Blue Book, which is its analysis of Governor Hochul’s proposed Executive Budget. This 2024-2025 Blue Book offers the Senate Majority’s perspective on the proposals advanced by the Executive.

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Albany Update 01.17.24

Governor’s Proposed 2024–25 Budget

Governor Hochul released the executive budget on January 16. This year’s budget totals $233 billion, which has been touted as being accomplished without raising income taxes. State spending from the current fiscal year is up nearly $6 billion, which amounts to a 4.5 percent increase.

There were a number of items in the budget that relate to the property and casualty industry. Two NYIA priority agenda items were included. The first would enact online insurance verification for auto insurance. The second would change the interest rate on judgments from nine percent to the prevailing market rate for both public and private entities.

There are also a number of concerning measures, including expansion of what is considered an unfair, deceptive or abusive act that would greatly increase litigation, dramatic changes to the excess medical malpractice insurance program, prohibitions on insurance companies in relation to the underwriting and rating of affordable housing and a change to the supplemental spousal liability insurance law to narrow its applicability. NYIA will be weighing in on these measures on behalf of our members.

Additional information about individual budget proposals applicable to property and casualty insurers is included in NYIA’s summary. NYIA will continue to dissect the thousands of pages of budget bills to ensure that provisions with an impact on our industry are analyzed.

Please keep in mind that this is only the beginning of the budget process. The array of proposals will be scrutinized by the Legislature, and NYIA will be weighing in with legislators and the Executive branch on those aspects impacting our industry. The Governor has an opportunity to submit both 21-day and 30-day amendments to her Executive Budget. The Legislature has released the budget hearing schedule. The hearings will begin on Tuesday, January 23 on the topic of health, which is when DFS typically testifies. The deadline for the budget to be passed is technically Sunday, March 31 but it is unclear if an on-time budget will be a priority this year.

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Albany Update 01.16.24

Governor Delivers Budget Address

Governor Kathy Hochul delivered her 2024 Budget Address at 10:30 a.m. today in the Red Room of the New York State Capitol (her ceremonial office).

A recording of the speech and summary of the 2024 Governor’s Budget Address are now available.

For those seeking additional information, the State Division of the Budget annually produces a State Budget Book, which contains a general overview of the Governor’s budget agenda for the upcoming year.

Some of the highlights that of possible interest to the insurance industry include:

• A proposal to enact an online verification of insurance system with the Department of Motor Vehicles
• A proposal to provide a market rate of interest on court judgments
• Legislation to prohibit insurance companies from refusing to cover affordable housing and ensure safeguarding against deed theft and other real property fraud
• A new Blue Buffers program to improve waterfront resiliency and allow for voluntary buy outs of at risk coastal properties
• Programs to dramatically expand housing in New York State, for 100,000 new homes, including new construction on state owned lands and $25 billion in bonding for new, affordable housing projects

The Governor’s Article VII Legislation should appear here when it becomes available.

NYIA will provide additional summaries of the proposals contained in the address as more details become available in the days and weeks ahead.