Feb 4, 2021

N.Y. Legislature takes action on PIANY priorities

PIANY-priority, excess-lines reform bill referred out of committee

Legislation that would modernize the excess-and-surplus marketplace was reported out of the Senate Commerce Committee on Feb. 1, 2021.

The bill (S.498)—sponsored by Sen. Neil D. Breslin, D-44—would eliminate the excess-line insurance diligent-effort requirement for commercial-risk placements made by retail producers through unaffiliated wholesale brokers. The bill also would reduce the amount of information required to complete excess-line affidavits significantly. If the bill becomes law, insurance brokers only would be required to provide the name of the declining company, the company’s National Association of Insurance Commissioners number, and the reason why the broker believes that the admitted insurer would not consider underwriting the risk. PIANY supports this legislation and will continue to advocate for its passage.

PIANY-priority photo inspection repeal bill introduced

Assemblyman Kenneth Zebrowski, D-96, introduced A.4199 in the state Assembly on Feb. 1, 2021, which would allow carriers to waive the photo inspection of private-passenger automobiles prior to providing physical damage coverage. The bill would allow insurance carriers to give policyholders the option to save time and money by eliminating the state’s photo inspection requirement, otherwise known as Regulation 79. PIANY and insurance carriers have called for reform of Regulation 79 for years, testifying that, when they receive the photos, they store them away, and they don’t use them PIANY has testified that the requirement of taking and storing hard-copy photographs is outdated and unnecessary, and the regulation should be repealed.

The COVID-19 pandemic has exacerbated the problem with photo inspections because often, inspection stations are closed or otherwise not available to take the pictures. This forces policyholders to travel great distances to get an inspection or run the risk of losing coverage.

PIANY thanks Assemblyman Zebrowski, for his continued support for removing this outdated requirement.

PIANY-priority anti-arson legislation introduced

Sen. James Sanders Jr., D-10, introduced S.2627 in the state Senate on Jan. 22, 2021, which would repeal the requirement for insureds to file an anti-arson application in order to obtain coverage for fire or explosion damage. This bill is vital because if an insured accidentally fails to complete the form in time—not as result of fraudulent activity—the law requires the insurer to cancel the policy. This creates a significant, unnecessary expense and creates a gap in coverage for the named insured.

Additionally, the application isn’t relevant anymore. Legislation enacted in 1996—which requires insurers to file plans with the New York State Department of Financial Services on how they intend to detect, investigate and prevent fraudulent insurance activities—has replaced the need for the anti-arson application.

Currently, New York City is the only municipality in the state where insureds are required to complete the anti-arson application. Assemblyman Daniel Rosenthal, D-27, introduced a same-as bill (A.603) in the Assembly last month. Both bills have been referred to their respective insurance committees.

PIANY thanks Sen. Sanders and Assemblyman Rosenthal for their support to independent agents and the insurance industry.

PIANY-priority bait-and-switch legislation introduced

Sen. Breslin, D-44, introduced S.3578 on Jan. 30, 2021.The bill would require carriers and producers that utilize insureds’ driving records as an underwriting or rating factor for personal automobile policies, to run motor-vehicle reports before binding a policy. Currently, carriers are permitted to run driving history record reports at any time, which can change the cost of a policy without a client knowing. This practice is sometimes referred to as bait and switch. According to Breslin’s sponsor’s memo, “Consumers should be able to rely on the quotes for insurance policies to be fair and accurate so they can determine whether the coverage is affordable. This practice detracts from that ability and leaves the consumers bound to policies that are much more expensive than originally represented and in some cases, unaffordable. Requiring all carriers to run [motor-vehicle] reports prior to binding coverage would guarantee the consumer will receive a fair and accurate quote prior to committing to the expense.”

PIANY thanks Sen. Breslin for his continued support of the independent agent channel. The association will continue to advocate for the passage of this important legislation.