Feb 5, 2018

Legislation introduced to repeal anti-arson application statewide

Building upon the success of PIANY’s efforts to repeal the anti-arson requirement in Buffalo and Rochester, PIANY is supporting legislation to fully eliminate this outdated requirement statewide. The bill (A.9707) was recently introduced in the state Assembly and referred to the insurance committee.

The proposal would fully to repeal the section of the insurance law and its accompanying regulations, which would eliminate the requirement of an anti-arson application in New York City.  The outdated requirement has proven burdensome and forces insurance carriers to cancel in-force policies when the form is not returned, causing periods of no coverage for policyholders.

In 1981 when New York first enacted its anti-arson application law, arson-for-profit was a significant economic and societal problem. New York’s anti-arson application law was enacted to give insurers ownership and property valuation information to assist in the investigation of arson-for-profit and to require property owners to sign a fraud statement.

However, present-day arson investigation techniques no longer rely on the anti-arson application form to determine ownership and property valuation and fraud statements are collected through other means when adjusting a loss. Insurers have access to a multitude of third-party sources to determine ownership and property values. Since the information collected on the form is no longer used, completing and collecting the form (which is required for both new and renewed insurance policies) creates a significant burden for both consumers and insurers.

Consumers suffer because completing the form is burdensome and insurance carriers must cancel in-force policies when the form is not returned, which means that the policyholder may be without coverage. Furthermore, consumers hear the ultimate administrative cost of having insurers reinstate policies that have been cancelled when they fail to renew the anti-arson application.

Insurers are burdened by the inordinate amount of time spent tracking down the anti-arson application from property owners.