It is crunch time for YOUR political action committee – InsurPac! With a newly divided Congress, a new Chairwoman of our primary committee for independent agents & brokers, dozens of new members of Congress that need education on independent agents, an important legislative agenda for independent agents, and more, it is imperative that every single Big I member contribute to your PAC.
Check out this new video on InsurPac. Please distribute it as you talk to your agency employees and colleagues about the need to support their PAC.
Online contributions can be made at www.insurpac.com/form or we can take checks payable to “InsurPac” – personal, LLC or partnership checks are accepted.
December 31 is the deadline for reporting purposes! We need a robust InsurPac to ensure YOUR voice is heard, and understood, on Capitol Hill!
Late last night, Governor Cuomo signed Big I NY's bill to simplify the license renewal process for agents and brokers. Now instead of three separate dates, all agent and broker business licenses will renew on the same date every two years.
Your Big I NY team developed this legislation and championed its passage. The Big I members who met with lawmakers, sent messages of support, and joined us in Albany for L Day 2018 were instrumental in this success. Thank you!
And there's more good news. The governor also signed another Big I NY-supported bill to allow property/casualty and personal lines agents and brokers to take their required pre-licensing courses in a setting other than a classroom.
We will continue to champion independent insurance agents like you in all we do. Rest assured that Big I NY always has your back.
Contact Scott Hobson at firstname.lastname@example.org if you have any questions.
This week, three important Big I NY-supported bills were delivered to the Governor's desk. He now has until December 7th to sign or veto the legislation. We have delivered letters of support to Governor Cuomo, and will update you as soon as action is taken.
Big I New York's Business Entity Licensing Simplification Bill (S.6445/A.8484)
Big I New York developed and championed passage of a bill it developed to address a major issue for members concerning their multiple business entity license renewal dates. Since agencies that sell insurance are licensed for all lines of insurance and are licensed as both agents and brokers, they must keep track of three separate renewal dates.
This bill will establish June 30 of odd-numbered years as the one common expiration date for all business entity licenses, making the renewal process much simpler for agents.
Pre-licensing Education (S.7634A/A.9527)
This bill will make it easier for those people who want to be licensed as property/casualty and personal lines insurance agents to complete their required pre-licensing education. Instead of requiring pre-licensing coursework to be conducted in a classroom setting, it allows the coursework to be taken through a correspondence course or a course offered over the internet.
Small Business Regulatory Relief (A.8205/S.4120)
This bill will provide regulatory relief to many small agencies that violate a state agency regulation. It requires all state agencies to allow a first-time small business rule violator with the opportunity to cure or take ameliorative action before a penalty is imposed. This bill would prevent DFS from levying fines and penalties against small insurance agencies that may have simply made a mistake.
While the DFS was understanding of our concerns, they do not intend to change their position on the TPSP issue.
Under Section 500.11, effective March 1st 2019, all covered entities (agencies and brokerages) will be required to:
Create and implement a written third party service provider policy designed to ensure the security of nonpublic information that is accessed by TPSPs (including, but not limited to, technology/software vendors and insurance carriers). The policy must consider, to the extent applicable, the risk posed by the third party, minimum cybersecurity standards to be met by TPSPs, due diligence processes to evaluate the adequacy of TPSPs, and periodic risk assessment of TPSPs.
Include in that written third party service provider policy guidelines and/or contractual protections relating to TPSPs, including, to the extent applicable: the TPSP’s policies and procedures for access controls; use of encryption; notice to the covered entity of a cyber event; and representations and warranties addressing the TPSP’s policies and procedures that relate to the security of the covered entity’s own information systems.
Per the DFS, due diligence of TPSPs is a two way street in the case of agents/brokers and carriers. Carriers must conduct a risk assessment and due diligence on all of their agents, while at the same time agents must also conduct a risk assessment and due diligence of all carriers whose policies they write.
Big I New York Has Your Back:
Big I NY strongly advocated for the agent/carrier relationship not to be treated as a third party service provider relationship, as both entities already must certify compliance with the cyber regulation to the DFS annually. The DFS’s recent decision is disappointing, and we are concerned it will cause confusion and result in significant costs to independent agents and brokers.
We are currently developing resources to assist agents in complying with the third party service provider requirements. Our goal is to provide a template third party service provider policy, suggested guidelines, and a questionnaire or other resource to help with the identification of third party service providers and assesment of their security policies and practices.
Contact: Scott Hobson
, Big I New York Director of Government Relations
FOR RELEASE: November 16, 2018
ALBANY, N.Y.—New York’s biggest and most influential insurance agent and broker associations announced today they have filed a lawsuit against the New York State Department of Financial Services (DFS) over amendments to NY Insurance Regulation 187, which would alter the agent/broker-customer relationship in the sale of life insurance and annuities, and ultimately harm consumers. Big I New York and the Professional Insurance Agents of New York State, who collectively represent thousands of insurance agents and brokers across New York State, are challenging the DFS on the basis that it acted beyond its authority when it adopted an amendment to Regulation 187, imposing a vague and subjective standard of care for insurance agents and brokers that is contrary to existing law.
The amendment, which is slated to take effect on August 1st 2019, would require agents and brokers to only consider the “best interest” of a customer in the sale of life insurance and annuities. Big I NY and PIANY assert that this standard changes the current law, as well as good business practices, which requires that insurance agents and brokers obtain the insurance coverage that is specifically requested by a customer, and act with honesty and trustworthiness in the process. Both Big I NY and PIANY note that this new standard is wildly subjective, and fails to instruct agents whose best interest they must consider, be it the applicant, insured, beneficiary, or owner of a policy – interests which are rarely, if ever perfectly aligned. In fact, Big I NY and PIANY contend, the new standard will not serve to protect consumers but instead will be detrimental to them.
“Life insurance is not a uniform, one-size-fits-all product and coverage recommendations should not be regulated. Restricting how an agent communicates with his or her client does a disservice to that client, and will potentially lead to less access for consumers” said PIANY President Jamie Ferris, CIC, AAI, CPIA. Mr. Ferris further remarked “In a highly competitive business environment, independent producers’ best marketing strength is their concern for their clients. Restricting open, honest discussion, driving out business, ultimately weakening the market will harm New York state’s insurance-buying public.”
The lawsuit identifies six separate legal grounds which challenge the amended regulation. Among the key contentions are: the DFS overstepped its authority; violated the State Administrative Procedures Act; created an unconstitutionally vague regulation; and acted in an arbitrary and capricious manner. During the amendment’s public comment period, both Big I NY and PIANY attempted to work in good faith with the DFS to create a balanced approach that would serve customers’ interests while protecting consumer access to the market.
“The DFS is failing one of its most important responsibilities: to ensure New York’s public has access to a healthy insurance market, with multiple products and options for customers’ coverage needs. This amendment will drive business out of the state and leave the insurance-buying public with reduced access to affordable coverage choices,” said Big I NY Board Chairman Louis Atti, CPCU. “That’s in nobody’s best interest.”
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Big I NY and PIANY are trade associations representing professional, independent insurance agencies, brokerages and their employees throughout New York State.
Read more on our Reg 187 Resource Page
Democrats Take Over NY State Senate
Come January 2019 the New York State Senate will be led by Senator Andrea Stewart-Cousins (D-Yonkers). Democrats handily defeated Republicans in key districts on Long Island and the Hudson Valley. Democrats are likely to have 40 seats to the Republicans 23. Long anticipated, the Democratic takeover in the Senate represents a unification of the party after the disbanding of the Independent Democratic Conference and an increasing commitment by Governor Cuomo to campaign for Democratic candidates.
The Democrats needed only to win one additional seat to take a numeric majority and defend one vulnerable incumbent, Senator John Brooks (Nassau, Suffolk). Republicans had to defend five open seats due to retirements and four seats determined to be vulnerable.
On Long Island, Republican incumbent Senators Marcellino, Phillips and Hannon lost their reelection bids. The open seat to replace Republican Tom Croci went to Democrat Monica Martinez. Incumbent Democrats John Brooks and Todd Kaminsky easily won reelection.
Brooklyn State Senator Martin Golden is 1,100 votes behind Democratic challenger Andrew Gounardes. Golden has yet to concede and will await the counting of nearly 3,000 absentee ballots.
Upstate the Republicans were able to keep two seats. In the race to replace retiring Senator John DeFrancisco (R-Syracuse), the Republican Bob Antonacci defeated Democrat John Mannion. Republican Daphne Jordan defeated Democrat Aaron Gladd to win the seat vacated by the retirement of Republican Senator Kathleen Marchione (R-Saratoga).
Democrats picked up a number of seats upstate. Assemblyman James Skoufis (D-Orange, Rockland) will move to the Senate after winning the seat left open by the retirement of Republican Senator Bill Larkin. Democrat Peter Harckham, a former Westchester County legislator, currently has a 2,100 vote advantage over incumbent Republican Senator Terrence Murphy. Democrat Rachel May won her race to replace outgoing Democratic Senator Dave Valesky who she defeated in the Democratic primary in September.
New York State Assembly Remains in the Hands of Democrats
There was never any doubt that the Assembly would continue under the control of the Democrats under the leadership of Assembly Carl Heastie (D-Bronx) in 2019. There will be 18 new Assembly members – 10 Democrats and 8 Republicans. Notable races include the defeat of Republican incumbent Ray Walter in Buffalo by Democrat Karen McMahon; the loss of the seat vacated by Democratic Assemblyman James Skoufis to Republican Colin Schmitt; and the loss by incumbent Democrat Christine Pellegrino to Republican Challenger Mike LiPetri. Longtime Assemblyman Bill Magee (D-Oneida) lost to Republican John Salka.
Democrats Win All Statewide Races
Governor Andrew Cuomo and Lt. Governor Kathy Hochul soundly defeated their Republican challengers Marc Molinaro and Julie Killian. The Republican ticket never had a chance to overcome Cuomo’s early lead in the polls or compete for campaign dollars to mount a competitive campaign. The Governor now has a Democratic Senate and Assembly and has set his sights on making New York the most progressive state in the nation. And, as his main theme throughout the campaign, he will continue to head the opposition to President Trump leading to the continued speculation of Cuomo’s interest in running for President in 2020.
Former NYC Public Advocate Letitia James defeated Republican Keith Wofford to become the State Attorney General. James is the first African-American woman to hold a statewide office.
Democrat Tom DiNapoli easily won reelection as the State Comptroller.
Three incumbent Republican members of Congress have gone down in defeat. In the 19th Congressional District, Congressman John Faso lost his Capital District/Hudson Valley seat to Democratic challenger Antonio Delgado. The race was even coming into election day. Delgado was able to win by a comfortable 8,000 vote margin.
In the Mohawk Valley’s 22nd Congressional District, Assemblyman Anthony Brindisi defeated incumbent Republican Claudia Tenney. Tenney had received considerable support from the White House and campaigned recently with the President Trump’s son Don, Jr.
Democrat Max Rose defeated Republican incumbent Dan Donavan for the Congressional seat on Staten Island by a margin of 52 to 46 percent. Congressional Republicans did not consider the Donavan seat to be vulnerable. The loss of the 11th Congressional District means there are no Republicans representing New York City in Congress.
As expected, former Assembly Majority Leader Joe Morelle will be heading to Washington to fill the Rochester seat left open by the death of Congresswoman Louise Slaughter.
Jill Muratori, Esq.
Recently, the DFS issued a set of frequently asked questions clarifying requirements regarding commissions, fees, or other allowances paid to insurance agents and brokers by issuers or to insurance brokers by group policyholders or prospective group policyholders. These requirements were addressed in Insurance Circular Letter No. 20 (2017), and subsequently supplemented on May 3rd, 2018.
Under the NYS insurance law, insurers must include compensation scales paid to producers in their rate filings. Filings must articulate the amount of producer compensation payable and include all variables used to determine that amount, such as the level of services performed in connection with the sale of insurance, or otherwise provided for in the insurance contract. Additionally, compensation scales must articulate when and how those variables are applied.
These requirements are designed to prevent unfair rebating, by prohibiting insurers from paying less than filed commissions to agents in an attempt to lower the premium.
The May 3rd, 2018 supplement notes that:
“DFS has received rate filings for group and blanket accident and health insurance that include flexibility in the payment of compensation to insurance agents and brokers without correlation to the services provided by the agent or broker. Issuers have indicated that the compensation ranges in these filings accommodate arrangements where broker compensation is agreed upon by the broker and a group and the issuer is asked to adjust the premium accordingly. An issuer may not consider these arrangements or any associated payments to a broker from a policyholder in determining broker compensation paid by that issuer. Therefore, such arrangements are not in compliance with New York's insurance laws and regulations."
The Department further notes that:
The premium charged to insureds of the same class must be based on the issuer's approved premium rate filing and must be applied uniformly to all similarly situated insureds. An insurance agent or broker may receive different compensation from an issuer in connection with the sale of an accident and health insurance policy only if such differences are attributable to specific factors articulated in the issuer's approved premium rate filing for that policy. For example, an insurance agent or broker may provide differing levels of services on behalf of the issuer in connection with the sale of a policy and therefore may receive different compensation. See OGC Opinion No. 08-05-05 (May 13, 2008).
If you licensed to sell accident and health insurance in New York, we recommend you review Circular Letter 20, Supplement 1, and the corresponding FAQs to ensure that your compensation agreements are in compliance.
Contact Tim Dodge with questions
Next Tuesday, New Yorkers will head to the polls amidst the most charged political climate in recent memory. While much of the news is focused on Congress, it is the battle for control of the state Senate that may ultimately have the greatest impact on New York's independent agents and brokers. Things could look very different come November 7th.
Currently, Republicans hold a one-seat majority in the Senate (a long-running power sharing agreement with a group of breakaway Democrats evaporated earlier this year). The party has controlled the chamber since 2010, when Democrats briefly held control (Google “NY state senate leadership crisis" for a fascinating history lesson).
This year, Democrats are vying to flip as many as 10 of the 63 state Senate seats. If they gain control of the Senate, Democrats will control both houses of the legislature and the Governor's mansion (as well as the Attorney General and Comptroller seats).
For years, the Republican-controlled Senate and Democratic Assembly have acted, in ways not often obvious, as moderating forces on the legislative process. Split control of the legislature has forced compromise and bi-partisanship, and pushed policy toward the center (mostly).
So what's in store if the Senate flips?
For four years in a row, legislation to enact a single payer system have passed the Assembly, only to die in the Senate (here's a quick primer on how it the bill would work). A Democratic Senate will surely give momentum to the single payer proposal, but that by no means makes passage a certainty. While this proposal is popular with the progressive wing of the party, more moderate Democrats may take pause at the staggering price tag – $139 billion. That would require raising state tax revenue by 156 percent. And Democratic control of the chamber, if it occurs, will likely be by a narrow margin. One thing is for certain – your voices will need to be heard louder than ever on this issue. We believe we can improve coverage and reduce healthcare costs – but not by scrapping the current market-based system.
New York has begun inching closer toward the legalization of recreational marijuana use. Spurred by the liberalization of laws across the country, and perhaps, legalization in neighboring Massachusetts and Vermont, the New York Department of Health launched a multi-agency study and determined that the positive impacts outweigh the potential consequences of legalization. While support among lawmakers on both sides of the aisle remains mixed, the trend is clear. A Democratic controlled Senate is sure to spark greater debate on this issue, and we can expect it will begin to gain traction.
This raises many important issues for agents and brokers. For example, how would legalization impact auto insurance? Early studies have linked recreational marijuana to increases in car crashes. Moreover, how will agents and brokers navigate the complex and potentially risky process of obtaining liability and property coverage for commercial growing and/or retail operations?
Also - under current law, employers can and do dismiss or refuse to hire employees whose drug tests are positive for marijuana use. If they continue to do this after legalization, there could be a bumper crop of lawsuits alleging discrimination (drinkers don’t get fired but weed smokers do) or wrongful termination (firing someone for committing a legal act.) Employment Practices Liability Insurance would apply to these types of lawsuits.
Is recreational marijuana coming to New York in the near future? It's hard to say. But one thing is certain – we'll be watching this issue closely.
We'll probably see more of them. One example – we may see a repeat of last year's budget proposal to dramatically increase fines under the insurance law. The only certainty? We'll be out on the front lines fighting anything that unduly harms independent agents, brokers, and our customers.
Playing Defense on Liability Issues:
New York's trial lawyers are a constant force pushing the boundaries of tort liability. The Senate, by and large, has held the line. A Democratic controlled Senate could be a very different climate.
Whether the Democrats flip the Senate is still anybody's guess. But regardless, our issues aren't partisan. Independent agents and brokers stand uniquely at the intersection of business and consumers - we're there to help regular people navigate the complex world of insurance and help them protect the people and things they love. For years we've scored important wins with bipartisan support, and we will continue to do so.
Yes, a Democratic controlled Senate could make things more challenging, and your support and advocacy will be more important than ever. But we're not afraid of a challenge.
On Friday, October 12, Big I NY member Jason Schiciano joined business leaders for a press conference in Tarrytown to call for reform of the state's antiquated and unjust “Scaffold Law."
Standing in front of the newly constructed Tappan Zee bridge, the group pointed to the tremendous costs associated with the law. They estimate that the law was responsible for between $200 and $400 million in additional insurance costs that did little if anything to improve safety on the project.
“The Scaffold Law is a small-business and new-business killer," said Jason Schichiano, president of the Levitt-Fuirst agency. “it affects our young adult, women, and minority entrepreneurs, looking to take advantage of the strong economy by starting a construction business."
First enacted in 1882, the “Scaffold Law" imposes absolute liability on property owners and contractors for gravity-related construction accidents. No contributing actions or negligence on the part of a worker are considered, regardless of how egregious. Tom Stebbins of the Lawsuit Reform Alliance of New York illustrated this point by citing a case in which a worker cut away the floor from underneath him and subsequently fell and was injured. Under the Scaffold Law, the property owner was held 100 liable for the worker's injuries.
Big I New York is a member of a broad coalition in support of reforming the Scaffold Law. We believe that all defendants must be afforded the opportunity to defend themselves from unfair liability claims.
New York's legal climate is among the worst in the nation, and it affects you and your customers!
We are proud to sponsor the Lawsuit Reform Alliance of New York 's annual meeting in Albany on October 23rd. The event will include updates from legal and policy experts on the tort liability climate, the "Scaffold Law," fraudulent claims, and upcoming lawsuit reform issues.
You won't want to miss this valuable event! Register here