This week, Governor Cuomo released his proposed state budget. This is the first step in the state's budget process. Next, the Senate and Assembly will release their own budget proposals ("one-houses"), then the three budget proposals are negotiated into a final budget, which must be passed by April 1st.
The governor's proposal includes several key provisions of interest to independent agents:
The Superintendent of Financial Services would be granted greater authority to prohibit a provider of health services from demanding or requesting payment for health services rendered under the no-fault insurance law. The bill also establishes the Motor Vehicle Insurance Task Force, which will examine alternatives to the no-fault insurance system as well as other legislative or regulatory initiatives to reduce the cost of motor vehicle insurance.
Notaries would be permitted to rely on approved technologies to verify identity and to notarize documents and exercise notarial authority remotely.
Electronic Service of Process:
The proposed budget would allow process to be served on the Secretary of State through an electronic system operated by the Department of State. It would also authorize the Secretary of State to forward notice of service process to entities by email and then make copies of process available to such entities.
State Insurance Fund (SIF) Proposals:
A trio of proposals would permit SIF to:
- Invest reserves and surplus similar to that of private insurance carriers.
- Cancel workers' compensation policies based on the policyholder's failure to cooperate with a payroll audit.
- Enter into agreements with private insurers to cover NYSIF policy holders performing work outside of New York State.
Pass-Through Entity Tax:
This bill would create an optional pass-through entity tax for partnerships and S corporations to pay and deduct State taxes at the entity level in exchange for a personal income tax credit. The new pass-through entity tax will permit partners, members and shareholders of electing entities to indirectly deduct SALT taxes paid under Article 24-A for Federal purposes as outlined in IRS Notice 2020-75.
In previous years, the executive budget has included various proposals to increase potential fines for insurance law violations and give the DFS greater deference in legal challenges against its regulations. We have vigorously opposed these measures, and are encouraged to see the governor has declined to include them in this year's executive budget.
Big I NY's government relations team is carefully reviewing these proposals and formulating our position on each. In the coming months, we will meet with key members of both houses of the legislature to advocate our support or opposition of the various pieces.
For more information, contact Scott Hobson.
2020 has been a tumultuous year, and the IA community faced many challenges. In a time of crisis, our advocacy efforts on your behalf are crucial. Here’s how Big I New York had your back in Albany and Washington D.C. this year:
Defeated A Regulatory Power Grab:
In January 2020, the Governor announced an executive budget which would expand the NYS Department of Financial Services' (DFS) authority to levy fines and penalties against insurance agents and brokers, as well as substantially increases possible fines. Big I NY met with key legislators in the Senate and Assembly, and deployed an aggressive grassroots lobbying campaign, culminating in our Independent Agents Advocacy Day in March. Ultimately, we were successful in blocking all harmful proposals from the final budget.
Stood Up for You and Your Customers During COVID
The effects of the pandemic and the state's ongoing response created an ever-changing and often confusing policy landscape. Big I NY was a constant advocate for common sense policies to help you and you and your customers weather the storm.
As the scale of the impact of the pandemic in NY became evident, we called on the DFS to adopt several measures to protect independent agents' ability to assist their customers, including suspending the auto photo inspection requirement (Regulation 79), and creating a grace period for continuing education (CE) and license renewal. Ultimately the DFS concurred, allowing agents to renew their license without CE in place, and waiving in-person monitoring requirements for CE classes and licensing exams. Recently, the elimination of the in-person monitoring requirement was made permanent.
When the Governor first announced occupancy restrictions, Big I NY successfully called for insurance agencies to be deemed essential.
Following Executive Order 202.16, the DFS issued an emergency regulation imposing a moratorium on cancellations and non-renewals for non-payment, as well as establishing a grace period for premium repayment. Initially, the regulation contained an extremely burdensome requirement that producers notify all of their customers by mail of the new changes. Big I NY successfully urged the department to change course, and allow these notices to be provided electronically and without prior consent. We also called for the policyholder protections to be extended to all excess policies, but this was ultimately unsuccessful.
Beginning in March, Big I NY launched a grassroots advocacy campaign which successfully opposed devastating state and federal retroactive business interruption coverage mandates. This campaign involved dozens of virtual meetings between member agents and state and congressional representatives, as well as meetings with legislative leadership and chairs of the Senate and Assembly insurance committees. This issue remains a key legislative priority for 2021. Big I NY members urged our state's congressional delegation to help small businesses by supporting the federal Business Continuity Protection Plan.
Looking Forward: What's on the Horizon for IA's?
With two highly effective vaccines now approved, there is light at the end of the COVID tunnel; but we are unlikely to return to any sort of normalcy until mid-2021 or later. In the meantime, we are in the midst of a second surge, and New York faces a massive budget deficit.
In the immediate future, we are likely to see a host of new “revenue raisers" put forward by New York elected officials. We are prepared to oppose any efforts to expand fines, fees, and penalties on independent agents, and expect to continue the fight against misguided business interruption bills. We are also optimistic that the coming year will bring new interest in eliminating outdated and burdensome regulations, such as the photo inspection regulation and anti-arson application.
If 2020 taught us one thing, it's that you never know just what the future holds. But there's one thing you can be sure of: no matter what, we'll have your back.
The 2020 elections have largely come and gone. While exhausting, one thing is certain: our involvement in the political process is critically important to the future of our industry and our profession. InsurPac, your federal political action committee (PAC) exists for that very purpose. It solicits voluntary contributions and then disburses those funds to U.S. Congressmen, Senators and candidates for federal office who are supportive of our livelihood. This election cycle InsurPac disbursed $1,948,000 and won 93% of the races that it supported.
InsurPac has your back. This past year the Big “I" has weighed in and won on some important issues, including:
- Earlier this year some legislators were taking direct aim at our industry over the issue of business interruption (BI) insurance. They argued that congress should retroactively void exclusions in contracts and force insurers to pay claims for something that was never priced and for which a premium was never collected. According to industry estimates, a haphazard response such as this would have cost between $255-$431 billion in claims per month. This was not just a “company" issue. Our commissions, contingency compensation, and even the fate of our profession were in play. The Big “I" successfully pushed back on these legislative proposals and took wind out of their sails.
- The Big “I" has successfully advocated for legislation, including the Paycheck Protection Program (PPP), to support our agent members and their clients cope with the COVID-19 pandemic and will continue to do so as the pandemic progresses.
- The Big “I" was successful in securing a year-long extension of the National Flood Insurance Program (NFIP).
- Working with industry partners, the Big “I" has put forward a plan for how Congress could structure a program to deal with future pandemics.
- Earlier this year legislation passed the House that would require nearly every small business with fewer than 20 employees to file new reports on their “beneficial ownership" with the Treasury Department's Financial Crimes Enforcement Network (FinCEN). The penalties for failure to comply are quite severe with civil penalties of up to $10,000 and criminal penalties of up to three years in prison. The Big “I" successfully secured an exemption for insurance agents in the House passed legislation and is working to get the exemption in the Senate legislation. The Big “I" has been the only producer group to advocate on behalf of agents and brokers.
As a federal political action committee, support for InsurPac must be above and beyond what your association dues are used for. Please consider making a contribution of $100, $250 or more today by clicking here or sending a check (must be personal, LLC or Partnership) made payable to “InsurPac" to 20 F Street, NW #610, Washington, DC 20001.
We are excited to announce the reinvigorated, reimagined, “Stack the PAC" local association competition! Each fiscal year (May 1 – April 30), beginning this year, the top performing local association for IAPAC fundraising will be honored with the Champion Cup!
What is the purpose of “Stack the PAC?"
Now, perhaps more than ever, our industry is facing threats from Albany. Our goal is to drive home the importance of our political action committee, recognize associations that go above and beyond for the cause, and most importantly help independent agencies thrive by growing our influence.
How is the winning local association determined?
The winner is determined by a weighted scoring system that factors in both total dollars raised and percentage of members contributing. This levels the playing field means that any association can take the trophy!
What are the current standings?
|Weighted Score||Local|| Total Contributions ||Percentage of Members Contributing|
Contact Scott Hobson with any questions.
This week, the National Conference of Insurance Legislators announced the formation of a Special Committee on Race in Insurance Underwriting. The new committee will study race-related issues in insurance underwriting, with an eye to protect the jurisdiction of state legislatures over the regulation of insurance. The committee will be chaired by Senator Neil Breslin (D, Delmar), the current chairman of the New York State Senate Insurance Committee.
The Special Committee will take testimony from stakeholders and work to define “proxy discrimination", which has been used to refer to seemingly neutral practices which disproportionately harm members of certain ethnicity, gender, or other protected class. The committee also seeks to examine underwriting factors such a zip code and education level.
We applaud NCOIL for its commitment, and for the selection of Senator Breslin to lead the committee. Big I NY is firmly committed to promoting diversity and inclusion within the industry, and we welcome any opportunity for our Inclusion Task Force to work with Senator Breslin and NCOIL to study these important issues.
The NYS Department of Financial Services has again extended the suspension of the expiration of individual producer licenses for an additional 30 days, through September 6, 2020.
At the end of this 30-day period, all licenses that would have expired between March 25, 2020 and September 6, 2020 will automatically expire on September 7, 2020, unless the producer completes all necessary continuing education credits, and submits a license renewal application, before September 7, 2020.
The Department has also extended the suspension of the requirement that a monitor be present to complete producer continuing education and pre-licensing course exams online for an additional 90 days, through November 5, 2020.
Today, the DFS adopted, on an emergency basis, the 60th amendment to Regulation 62. The amendment prohibits health insurers from charging copays, coinsurance, or deductibles for outpatient mental health services for essential workers, with the exception of high deductible plans. Health insurers are further required to notify outpatient mental health providers in their network that they may not collect any copay, coinsurance, or deductible from essential workers for such services.
The regulation is currently in effect until September 28th, 2020.
Read the amended regulation here
Liberty Mutual Insurance announced that they are rolling out updated guidelines for their 2020 commercial lines profit-sharing agreement and will be waiving the 10% written premium growth requirement to earn a profit-sharing bonus.
"Despite the incredible challenges they've faced during the pandemic, independent agencies never stopped working hard. They continue to help customers protect what matters most, while keeping their teams safe and businesses afloat. But our shared customers have been hit hard and agencies need carrier support," said Big I NY's Chair of the Board, David T. MacLachlan, CPCU.
"I commend Liberty Mutual for leading the way, waiving the growth requirement for agencies in profit-sharing. There continues to be much economic uncertainty. Liberty’s move is just one way to help agents move more confidently towards the future, and I strongly encourage other carriers to follow suit."
New York members requested this leeway when asked how carriers can best support them at this point in the pandemic. The Big I NY exclusive report 'Independent Agency Approach to Visits During COVID-19' explains how agencies are handling in-person and virtual visits, and the safety precautions being implemented. Read the report.
Read the full IA Magazine article sharing this Liberty Mutual news.
What you need to know:
The New York State Senate and Assembly have adjourned for the year.
Several bills that Big I NY opposed, including business interruption coverage mandates and “bad faith" liability were not passed.
The legislature will hold joint hearings on COVID-19 between July 28th and August 25th.
As of July 24th, the NY Senate and Assembly stand adjourned at the call of the Majority Leader and Speaker, respectively. Unlike in past years, all bills “on third reading," meaning those that have passed the relevant committee(s) and are eligible for a vote by the full house, remain on third reading. Legislative leaders can call legislators back to session at any point during the remainder of the year, and can resume voting on bills. The legislature will hold joint hearings on COVID-19 between July 28th and August 25th, and the prevailing opinion is they are likely to reconvene session in the early fall.
Business Interruption Bills Defeated:
From their first introduction, Big I NY strongly opposed bills to retroactively mandate that business interruption coverage apply to pandemic related-losses. Such proposals would decimate the private insurance market, harm all NY policyholders, provide limited benefit to hurting businesses, and are almost certainly unconstitutional. We further oppose legislation to that would proactively mandate such coverage, as it would also create a crisis of cost and availability for business interruption coverage. During the final crucial weeks of session, we launched a grassroots campaign pressuring legislators to reject these harmful bills, resulting in well over six hundred emails sent and four dozen phone calls to members of the NY Assembly.
“Bad Faith" Liability Bills Defeated:
Big I NY worked closely with the carrier trades to oppose legislation that would impose sweeping legal liability on insurers for a range of “bad faith" claim settlement conduct. This legislation, which is a priority for the plaintiff's bar, would result in an avalanche of litigation against insurers, driving up premiums for all New York customers.
Dog Breed Legislation Withdrawn from Committee Agenda:
On Monday, the Senate Insurance Committee was scheduled to vote on S.7924, which would prohibit insurers from canceling, refusing to issue or renew, or charging higher premiums for homeowners’ insurance based on the breed of a dog. Big I NY opposed this legislation, and it was subsequently pulled from the committee agenda at the sponsor's request. The bill therefore did not advance.
Bill Authorizing Sale of Group Fleet For-Hire Auto Passed:
Both the Senate and Assembly passed legislation requiring NY insurers to establish a group fleet policy insuring against the losses or liabilities arising out of the ownership of motor vehicles engaged in the business of carrying or transporting passengers for-hire, having a seating capacity of not less than eight passengers. The legislation takes effect immediately upon signature by the governor.
Police Liability Insurance Legislation Not Considered:
Legislation to require police officers to carry liability insurance garnered attention nationally, but was not acted on in either the Senate or Assembly.
What you need to know:
• State lawmakers return to Albany on Monday for a full week session, which is expected to be the last “regular” session week.
• Members of the legislature will reconvene virtually in early August for a series of hearings on issues related to COVID-19. A list of specific issues is not yet available.
• Big I NY opposes retroactive business interruption coverage mandates and “bad faith” lawsuit bills. We are monitoring underwriting restrictions based on dog breeds and COVID-19 Workers Compensation proposals.
Here are the latest developments:
Big I NY Launches Business Interruption Campaign:
This week, we rolled out a statewide grassroots campaign to oppose A.10226-B (Carrol)/S.8211-A (Gounardes), which would retroactively mandate that business interruption coverage apply to pandemic-related losses, even when such coverage was specifically excluded. This legislation would decimate New York’s insurance market, with serious consequences for policyholders of all types of insurance. Click here to send a message to your lawmaker
“Bad Faith” Legislation Advances in the Assembly:
The Assembly Insurance Committee voted 14-6 to advance A.5623-B (Weinstein), which would create a private right of action to allow a policyholder to sue an insurance company for a wide range of claims settlement practices. Big I NY opposes this legislation, as it is unwarranted and would substantially increase the cost of insurance. New York policyholders already have multiple remedies, including suing for breach of contract, violations of the covenant of good faith and fair dealing, and filing a complaint with the Department of Financial Services. California courts briefly authorized “bad faith” lawsuits, only to see insurance premiums spike by almost 20% before ultimately reversing the decision.
Dog Breed Legislation Considered in Senate:
On Monday, the Senate Insurance Committee will consider S.7924 (Martinez), which would prohibit insurers from canceling, refusing to issue or renew, or charging higher premiums for homeowners’ insurance based on the breed of a dog.
Workers Compensation Presumption of Workplace Exposure Bills Not Considered:
Legislation to create a rebuttable presumption that COVID-19 is an occupational disease covered by workers’ compensation have not advanced to a committee vote.