Jan 21, 2021

PIANY’s 2021 legislative priorities

The new, two-year legislative session began in New York earlier this month. At the start of the session, there usually is a flood of new legislation. This year was no exception.

Anti-arson application repeal

Assemblyman Dan Rosenthal, D-27, introduced a bill to address anti-arson (A.603), which would repeal the law requiring anti-arson applications to be completed in New York City.

Insurance fraud was on the rise in some major cities in the 1970s because of individuals who committed arson on their own properties. As a result, the state Legislature created a law requiring the completion of an anti-arson application. Under the law, certain people who want to cover their property from damage caused by fire or explosions have to complete this application annually. Failure to complete the application results in the cancellation of the underlying insurance policy.

However, legislation enacted in the 1990s made the application irrelevant. That legislation requires insurers to file fraud prevention plans with the New York State Department of Financial Services regarding how they intend to detect, investigate and prevent fraudulent insurance activities.

Since then, insurers have engaged in fraud prevention methods that are far more effective than the application form. Currently, New York City is the only municipality in the state where insureds are required to complete the anti-arson application.

PIANY has long supported the complete repeal of the anti-arson application. The association was successful in getting the requirement repealed in Buffalo.

The same legislation passed the Assembly (141-0) during the 2019-2020 session.

Bait and switch

Assemblyman Kevin Cahill, D-103, sponsors legislation, A.1809, which would stop a growing trend in the auto insurance marketplace in which some insurers re-rate policies after they run the individuals’ motor- vehicle reports. Often, this means the policyholder’s premium is increased substantially after the policy is bound. In many cases, policyholders have no idea when they agree to the terms and the price of the policy, that the policy could be re-rated and premiums could increase. Colloquially, this practice is known as bait and switch.

Standardization of hurricane deductible triggers

Assemblywoman Stacey Pheffer Amato, D-23, sponsored A.950, which would require the DFS superintendent to make the triggering and operation of windstorm deductibles uniform.

PIANY is a strong advocate for the standardization of the windstorm-deductible trigger. Despite the display of deductible amounts in policy declarations, most policyholders are unaware that different insurance companies have different windstorm triggers. Ultimately, it is the triggering event that determines whether a windstorm deductible applies to a policyholder’s loss and, therefore, the windstorm trigger has substantial effect on out-of-pocket costs for homeowners. Standardization of these triggering events is necessary for policyholders to understand how their policies will respond. This bill would establish standardization while maintaining insurance carriers’ ability to apportion hurricane risk between insurers and policyholders, with freedom to adjust deductibles. 

NYSIF Reform

Assemblyman Kenneth Zebrowski, D-96, sponsored A.1295, which would remove the requirement for policyholders to provide 30 days’ notice to withdraw from the New York State Insurance Fund.

This requirement serves only to restrict New York businesses from efficiently moving their workers’ compensation insurance policies to more affordable and less restrictive carriers. The requirement reduces the time frame in which businesses can shop their policies, and it subjects policyholders to significant short-rate penalties if they fail to meet this arbitrary time frame. Employers are, through this rule, prohibited from saving valuable capital that they could re-invest into their businesses and create jobs.

To keep track of these PIANY legislative priorities, use the PIAdvocacy bill tracker and read your PIANY publications.