Resource kit 31059
By Matthew F. Guilbault, Esq.
The New York State Legislature adjourned the 2017 state legislative session late June 21, 2017, a flurry of last-minute bills were considered and passed. But, many important issues still remain unresolved, including charter schools, extending mayoral control of New York City schools and a critical upstate/Long Island sales-tax extension. Lawmakers could return to the Capitol at some point later this year. Without an extender, county sales taxes expire at the end of November. Mayoral control lapses much sooner, on June 30; if it isn’t extended, the city’s board of education takes over. As the clock ticked down, hundreds of interest groups frantically pushed their legislative proposals in the hope that they would be considered before state representatives left town for the summer.
Here’s some of the important bills that affect insurance agents and brokers.
PIANY works to end the continuing-education nightmare for agents and brokers (passed both houses)
Realizing how difficult it is to keep track of all the various required agent and broker continuing-education credits, courses and deadlines for our members, PIANY initiated a multiyear effort to persuade regulators and lawmakers to streamline the CE requirements for independent insurance agents and brokers. PIANY worked with Sen. James L. Seward, R-51, and Assemblyman Kevin A. Cahill, D-103, to introduce PIANY’s priority legislation (S.1314-A/A.117-A) to exempt business-entity licensees from CE requirements in cases when all sublicensees can demonstrate they have adequate CE credits to support their individual licenses in effect at the date of renewal. The bill would eliminate the need for insurance agents and brokers to take duplicate CE courses for both their individual and agency insurance licenses. PIANY engaged top staff at the New York State Department of Financial Services who offered amended bill language that is incorporated into the current bill. Eliminating duplicative and onerous CE requirements for licensees with multiple licenses has been a top item on PIANY’s 2017 legislative agenda. PIANY successfully passed the bill through both houses of the Legislature and it will be sent to the governor who can sign it into law.
PIANY supports conditional renewal notices for workers' compensation policyholders (passed both houses)
Both houses of the state Legislature also passed PIANY-supported legislation (A.1620/S.1005) that would require insurance carriers to provide conditional renewal notices to workers’ compensation policyholders when the premium will increase more than 10 percent upon renewal with an affiliated insurance company that is under common control with the previous insurer. This bill would protect the customer by affording the opportunity to look for alternative coverage before their current policy expires. It is scheduled to be sent to the governor who can sign it into law.
PIANY supports elimination of anti-arson applications (passed both houses)
Both houses of the Legislature also passed PIANY-supported legislation (S.6010/A.6217) to eliminate the requirement for anti-arson applications in Buffalo. The bill would amend the Insurance Law to only apply this requirement to cities with a population of one million or more persons according to the 1970 census, effectively removing the requirement from Buffalo, N.Y. PIANY worked directly with the sponsors of this legislation.
When New York first enacted this law, arson-for-profit reached a significant point due in large part to specific economic circumstances. Those circumstances are no longer present and the methods of investigating arson no longer make it necessary to continue this act. The application requirement causes time and effort to be wasted when attempting to secure insurance in Buffalo. This legislative change would stop this unfair treatment of Buffalo. It is scheduled to be sent to the governor who can sign it into law.
PIANY pushes for NYSIF broker commissions (died in Insurance Committee)
Fulfilling a promise made to its members, PIANY successfully amended legislation (S.4558-A) to include a requirement for the New York State Insurance Fund to pay commissions to licensed brokers. The bill is sponsored by Sen. Kenneth P. LaValle, R-1, and Assemblyman David I. Weprin, D-24. As PIA members are aware, the NYSIF does not pay commission to its brokers. Reforming the NYSIF’s competitive advantages over the admitted market for workers’ compensation has been a top-priority reform the association has worked toward since 2015. NYSIF is the largest single carrier of workers’ compensation insurance in the state (40 percent of the market). The bill also removes the NYSIF’s exemption from licensing and other requirements of the Insurance Law, placing workers’ compensation policyholders under the protections of the Insurance Law for cancellations and nonrenewals; requires the superintendent of financial services to approve the rules adopted by the NYSIF for the conduct of its business; and removes the requirement for policyholders to provide 30 days’ notice to withdraw from the NYSIF. Given the overwhelmingly similar nature of NYSIF’s work and private workers’ compensation insurance carriers, they should be treated the same with respect to state oversight and regulations. This bill would accomplish this goal.
PIANY continues fight to eliminate NYSIF 30-day cancellation notice requirement (died in Insurance Committee)
PIANY also drafted and introduced legislation (S.428/A.1598) to eliminate the requirement that policyholders provide NYSIF with 30 days' advance notice before cancelling a workers’ compensation policy when that policyholder desires to move the policy to a private carrier. The requirement to provide NYSIF with 30 days' notice prior to moving a workers’ compensation policy only serves to restrict the ability of New York’s businesses to efficiently move their workers’ compensation insurance policies to more affordable and less restrictive carriers by severely reducing the time frame within which they can shop their policies and subjecting policyholders to significant short-rate penalties if they fail to meet this arbitrary time frame. Through this rule, employers are prohibited from saving valuable capital that they could reinvest into their businesses and create jobs.
Continuing-education credits for being an active member of an association (passed Senate, died in Assembly committee)
The state Senate also passed PIANY-supported legislation (S.3960/A.7012) that would authorize the superintendent of financial services to grant six credit hours of continuing education for a licensee's active membership in a statewide professional insurance producer association.
Recognizing that New York's insurance producer associations promote professionalism, best practices, ethical compliance, continuing-education training and networking opportunities to their members; and that membership in these associations provide younger members an opportunity to be mentored by more established insurance producers thereby enhancing their business prospects, the sponsors agree with PIANY that it is in the best interest of the State of New York to encourage insurance producers to join such associations and participate in that association's meetings, conferences and educational seminars. This bill would further that interest by requiring the superintendent of financial services to grant six credit hours of an insurance producer's legal continuing-education requirement for membership in good standing of a qualified association.
Ride hailing coming to upstate New York
Gov. Andrew M. Cuomo signed legislation into law (Signed Chapter 34) that pushes up the date ride-hailing apps may begin operations in upstate New York. The legislation now allows for ride-hailing companies, such as Uber and Lyft, to begin operating Thursday, June 29, 2017. The legislation also sets forward regulations for passengers, ride-hailing drivers and ride-hailing companies.
PIANY opposes trial lawyer push to expand carrier liability (died in Insurance Committee)
PIANY joined with numerous other insurance groups and associations of the property/casualty industry and the Business Council of New York State to unite in strong opposition to a proposed bill (S.6643-A) that would permit policyholders to bring a private right of action against any property/casualty insurer based on alleged unfair claim-settlement practices. These practices include and greatly expand upon the unfair claim practices prohibited by Insurance Law Section 2601.
Requiring SUM limits match bodily injury in personal automobile insurance policies (passed Senate, died in Assembly)
The Legislature also saw the introduction of legislation (A.5445-A/S.5644-A) that revisited the old topic of inadequate supplementary uninsured/underinsured motorists limits on personal automobile policies. The bill would make certain that auto insurance consumers are made aware of the benefits of SUM coverage and to provide these consumers with the option of declining such coverage.
This bill would require that the amount of SUM coverage that insurance carriers must make available to consumers is equal to the bodily-injury limits on a policy, removing a $250,000 cap on required coverage. In addition, this bill would require that, at the time a policy is purchased, consumers be offered a choice of: 1. declining SUM coverage equal to the level of bodily injury limits on the policy; 2. purchasing SUM coverage at limits less than bodily-injury limits on the policy; or 3. declining SUM coverage that is in addition to the statutory minimum. To ensure that the consumer has adequate information to make an informed choice, the insurer or agent would be required to disclose to the consumer what SUM coverage is and what premiums would apply at each level of coverage.
Private-passenger automobile insurance liability limits study (passed Assembly, died in Senate committee)
The state Assembly also passed legislation (A.3787/S.5883) to create a study of the minimum coverage amounts for noncommercial auto insurance. The bill would require the NYDFS to conduct a study that would include a review of the minimum coverage amounts for the following types of automobile insurance coverage: liability, uninsured motorists, no-fault and additional coverage options, including, but not limited to, comprehensive collision and supplemental uninsured/underinsured motorists coverage.
The bill also would require that a report detailing the NYDFS findings, as well as recommendations as to whether the required minimum coverage amounts for liability, uninsured motorist coverage and no-fault should be increased; the extent to which such coverage should be increased; and the impact this would have on premiums be submitted to the governor, the Senate, the Assembly and the chairpersons of the Senate and Assembly standing committees on insurance no later than April 15, 2018. The study would be created in consultation with relevant stakeholders, including insurance companies, insurance producers and consumer advocacy groups.
Requiring standardized definitions for commonly used terms and phrases in certain insurance policies (passed Assembly, died in Senate committee)
The state Assembly also passed legislation (A.391/S.2809-A) that would require the superintendent of financial services to promulgate regulations which provide standardized definitions for commonly used terms and phrases found in homeowners policies and commercial-lines policies that provide coverage for loss or damage to real property, personal property or other liabilities for loss or damage to property. Insurers would be required to use the standardized terms and phrases in policies issued or delivered on or after the date the regulations are finalized, which would be no later than Jan. 1, 2019. The bill also would allow insurers to use alternative definitions at the discretion of the superintendent, so long as such definitions are not any less favorable to the policyholder or claimant than those required under the regulations.
Prohibiting cancelling, nonrenewing or conditional renewal of automobile insurance policies with pending claims (passed Assembly, died in Senate committee)
The state Assembly also passed legislation (A.635/S.3757) to prohibit insurers from canceling or refusing to renew, or condition its renewal, of automobile insurance policies solely on the basis that there is a pending complaint filed by the insured, or that a claim filed by the insured with the insurer is in dispute.
Increased penalties for forgery of a certificate of insurance or insurance identification card (passed Senate, died in Assembly Codes Committee)
The state Senate passed legislation (S.4298/A.1217) that would include within the Class D felony of forgery in the second degree, the forgery of a certificate of insurance or an insurance identification card.
Eliminate automobile photo inspections (died in Insurance Committee in both houses)
PIANY-supported legislation (A.1312/S.5768) to provide that an automobile insurer may waive the inspection of a private-passenger automobile prior to providing physical damage coverage also died in the insurance committees in both houses.
State task force on disasters (passed Assembly, died in Senate committee)
Legislation also was introduced (A.1643-A/S.1594-A) that would create a task force on disasters to examine how insurers who write policies that cover loss of, or damage to, real property, personal property or other liabilities for loss of, damage to, or injury to persons or property in the state respond to disasters.
Liability insurance rate reductions upon completion of a boating safety course or an advanced boating-safety course (passed Assembly, died in Senate committee)
The state Assembly also passed legislation (A.2336/S.2985) that would require liability insurance rate reductions upon completion of a boating-safety course or an advanced boating-safety course.
Extend provisions of the Insurance Law/NYPIUA that promote the stability of the property/casualty insurance market (passed both houses)
The bill (A.7861/S.5806) would extend provisions of the Insurance Law that provide well-established consumer protections regarding rate regulation for property/casualty insurance, and also facilitate the ability of property/casualty insurers to continue to make certain types of insurance readily available to New Yorkers. Extending these provisions will allow this existing framework to continue. The bill also would extend the authority of the New York Property Insurance Underwriting Association for an additional three years. This extension will promote the stability, availability and affordability of property/casualty insurance in the state by extending the superintendent's authority to authorize NYPIUA to write coverage for an underserved market. 6/17