| In response to Big I New York's advocacy work, Kemper Personal Insurance will retroactively reinstate old commission levels for business its agents have produced since last fall. Big I New York learned this news this afternoon during a meeting with representatives of the New York State Department of Financial Services (DFS.) The carrier should formally notify its agents by the end of this month. The carrier, which announced last summer its intention to exit preferred auto and home markets countrywide, has taken several steps to reduce its volume in New York. These measures did not appear to comply with New York Insurance Law Section 3425. That law requires auto insurance carriers to file with DFS and receive approval for withdrawal plans when they wish to leave the market. The law also states that, when DFS has determined that a carrier was using certain actions to exit the market without filing a plan, the carrier must pay its agents commissions at the rate that applied before it took the action. In response to alerts Big I New York received from its members throughout last fall, we immediately engaged with the DFS in December and asked that the department investigate Kemper's market actions and instruct them to comply with the requirements of Section 3425. As we have received additional information, we have continued our dialogue with the DFS. By letter dated February 20, DFS told Kemper that it had determined that they were attempting to exit the New York markets without filing the required plan. They ordered the carrier to cease taking actions to reduce its volume until they have submitted a plan and the department has approved it. The letter also said, “Kemper also should confirm that it will comply with New York Insurance § 3425(j) and (n), with regard to insurance agent commissions and payment plans." During our call today, DFS confirmed that Kemper will reinstate the commission levels that were in effect prior to last October 1. We were told the reinstatement will apply to renewals going forward and retroactively to policies issued since the commission reduction went into effect. DFS said that they expect Kemper will notify its agents sometime before the end of this month. The carrier also told DFS that they are offering a workaround for agents regarding the elimination of electronic signature capability. Kemper agents should contact the carrier for details on the workaround. We are very pleased that the DFS addressed our members' concerns about this carrier and have extended our thanks. For those members who are Kemper agents, we encourage you to watch out for future communications from the company. As always, Big I New York has your back.
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Wednesday, during the Big “I" Legislative Breakfast, Charles Symington, Big “I" president & CEO, presented Big I New York with the 2023 Maurice Herndon Award. The Maurice Herndon award is given every year to the state association that has done exemplary work on legislative issues and government affairs the previous year.
“This year's recipient achieved new fundraising levels for both InsurPac, our federal PAC, and their state PAC," Symington said. “They've had very strong participation at the Legislative Conference and strengthened grassroots relationships with key members of their congressional delegation. And on the state level, our winners successfully defeated legislation that would've banned all noncompete agreements and also made favorable changes to cybersecurity regulations." Big I New York members were in attendance to accept the award. Pictured from left to right: Nick Masterpole, Scott Hobson, Ron Burnell, Lisa Lounsbury, and Ted Walsh with Charles Symington.
Advocacy on behalf of members at both a state and national level is something we take very seriously. We're incredibly grateful to have a community of independent agencies who rally together to stand up for our industry and the communities we serve. Our agencies should be proud of what we have been able to achieve in the last year. 2023 and 2024 are banner years (hello, historic photo inspection WIN).
THIS association has your back. Even when others back down, we keep advocating for our members.
And we always will.
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Reacting to Big I New York's successful effort last year to make the automobile photo inspection requirement optional, the New York State Department of Financial Services has proposed a major amendment to the regulation that implements the law. All members of the public can submit comments on the proposal. The department formally published the amendment in the April 3, 2024 issue of New York State Register. It changes Part 67 of Title 11 of the New York Codes, Rules, and Regulations (also known as “Insurance Regulation 79.") The New York Department of State publishes the New York State Register each Wednesday. It is the weekly publication of all regulatory actions state government agencies take and administrative actions the governor takes. Last November, New York Gov. Kathy Hochul signed into law Assembly Bill number 3172-A. This bill was Big I New York's highest legislative priority in 2022 and 2023. It amended New York Insurance Law Section 3411 to permit insurance carriers to waive photo inspections of the automobiles they insure against physical damage. Current law requires the carriers to inspect the vehicles before insuring them against physical damage. The change lifted a significant burden from New York insurance consumers and from the insurance producers who serve them. The change to the law takes effect on May 15, 2024, and will expire on October 1, 2027. Big I New York intends to do everything it can to convince the legislature and governor to make the change permanent. The amendment to Regulation 79 proposed today makes an insurer responsible for conducting an inspection “(u)nless (it) has filed with the superintendent (of financial services) a statement waiving its right to inspections for all automobiles …" It requires an insurer wishing to waive its right to inspect vehicles to submit a revised plan of operation. The plan must specify the vehicles it will and will not inspect. The amendment strikes the word “mandatory" from the regulation's text in several places. However, there are five other significant changes: - The section that formerly permitted an insurer to waive inspections of certain vehicles now states that “(a)n insurer may waive an inspection for any automobile …"
- Insurers will still have the option of requesting copies of lease agreements, window stickers, bills of sale, or transfer of ownership forms, even if it has waived the right to an inspection. The insurer also has the right to withhold payment of a physical damage claim unless and until it receives those materials. It can also non-renew the policy if it has not received them.
- The insurer has the right to require an inspection if the prior insurer's representative did not inspect the vehicle.
- The New York Automobile Insurance Plan (NYAIP) has the option of waiving the inspections.
- The amendment includes new forms for insurers to use if they do not waive the inspections.
Members of the public who wish to submit comments to the department may email them to Joana.Lucashuk@dfs.ny.gov. We encourage all interested Big I New York members to do so. The department will accept comments until the end of the day June 3, 2024.
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|  We are excited to report that on Monday, March 25th, the New York State Assembly unanimously passed two of our high priority bills. The first bill will eliminate the anti arson application in New York City, which is the only jurisdiction which still requires it. The second bill makes common-sense changes to the recent supplemental spousal liability opt-out law. The changes will exempt unmarried policyholders from automatic enrollment in the coverage, and will not apply automatic enrollment to commercial auto policies.
Big I New York has lobbied strongly in support of both bills and recently met with committee chairman David Weprin (D, Queens), to express our support for their passage. Both bills must now be passed by the NYS Senate and signed by the Governor before becoming law.
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| In November 2023, Big I NY celebrated the signature of our top priority bill, which will allow carriers to waive CARCO photo for any or all vehicles in NY. Here is all you need to know about how this will work!
When can carriers begin waiving photo inspections? The new law will become effective on May 15th, 2024. We anticipate that many carriers will begin waiving photo inspections on or shortly after this date. How long will carriers be allowed to waive photo inspections? Until October 1, 2027 if the law is not extended or made permanent. Big I NY is committed to making these changes permanent. Do carriers have to waive all photo inspections? No. The law allows them to waive all or some inspections based on their underwriting guidelines. Will all carriers eliminate or reduce their photo inspection requirements? This is up to each individual carrier. According to CARCO's own data, states that have made photo inspections optional was 80%-90% reduction in inspections across the board. We anticipate similar effects in NY. Which vehicles will carriers still require photo inspections for? This is up to each carrier. The regulations implementing the law are still being finalized, but we believe carriers will be permitted to waive inspections for any vehicles they wish, provided it is not unfairly discriminatory and consistent with the company's underwriting guidelines. Inspections will likely be waived by vehicle, not by individual insured. Companies may still opt to require inspections for vehicles that have a high incidence of insurance fraud. I haven't heard anything from my carriers about this yet. Why not? DFS still needs to adopt changes to the insurance regulations to provide specific guidance on how carriers may waive inspections. We know these changes are in progress but not exactly when they will be finalized, other than by May 15th of this year. We do not expect carriers will make formal decisions about waiving photo inspections until these regulations are in place.
Other questions? Contact Scott Hobson at SHobson@BigINY.org
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|  By Scott Hobson, AVP of Government Relations SHobson@BigINY.org
New York's budget process is in full swing, and Governor Hochul recently released her executive budget proposal. As the first step in the budget process, the Governor's proposal lays out her vision for how the state will collect and spend tax dollars, as well as major policy initiatives for the year. Next, each house of the legislature will issue their own proposals, and the legislative leaders and governor will negotiate on a final budget, which is due by April 1st.
Many of the Governor's proposals would impact IAs and their customers. Throughout the budget process Big I NY's government affairs team will work with lawmakers and Governor Hochul to support pro-consumer measures and defeat those which are harmful. These issues and our position are outlined below. SUPPORT Changes to Supplemental Spousal Liability Opt-Out Law (Executive Budget, TED Part DD) What it does: Makes common sense changes to the recent law that made supplemental spousal liability opt-out, rather than opt-in. Automatic enrollment would apply only to married policyholders, and would exempt commercial auto policies. Why it is good for consumers: Supplemental Spousal Liability coverage is an often overlooked, valuable, and affordable or even no-cost coverage that benefits married drivers. However, the 2022 opt-in law resulted in situations where unmarried drivers were automatically enrolled in coverage they would not benefit from. Moreover, the coverage is rarely a benefit for commercial auto polices. SUPPORT the Extension of the Internet Point Insurance Reduction Program (Executive Budget, TED Part F) What it does: This program provides a 10% reduction for three years, from the base rate of current liability, no-fault and collision premiums for drivers who complete an approved point reduction course. The executive budget would extend the program until 2026. It is currently due to expire April 1, 2024. Why it is good for consumers: The program improves public safety and gives drivers a much-needed reduction in their insurance rates. SUPPORT Property Resiliency Initiatives (Executive Budget, Capital Projects Allocation) What it does: Provide $435 million for resiliency projects to protect communities from severe floods, including $250 million for a voluntary buyout program. Why it is good for consumers: Multiple studies have shown that for every dollar spent on preventative measures, it saves approximately $4 in future losses. By actively implementing risk mitigation strategies, communities and consumers can help harden property and better protect it. The implementation of risk mitigation strategies should make certain properties more appealing to insure, adequately cover and accurately price.
OPPOSE Unfair, Deceptive, and Abusive Acts and Practices (Executive Budget, TED Part JJ) What it does: The proposed expansion of the law surrounding Unfair, Deceptive, and Abusive Acts and Practices (UDAAP), would significantly expand the scope of business conduct that is considered illegal, including subjective standards such as “likely to cause substantial injury", and “takes unreasonable advantage of a person's lack of understanding of the material risks, costs, or conditions of a product or service." It provides for enforcement by the Attorney General and private lawsuits, with minimum damages of $1,000, and mandatory attorney's fees and court costs to a prevailing plaintiff. The proposal includes a 30-day cure period in cases where damages exceed $500. Why it is bad for consumers: While well-intentioned, this bill will have significant unintended consequences. It creates powerful incentives for private litigation, which is likely to give rise to a wave of abusive “shakedown" lawsuits against businesses. This will harm the state's economic recovery and put further pressure on the increasingly strained insurance market, driving up rates for businesses and consumers. SUPPORT Online Insurance Verification (Executive Budget, TED Part H) What it does: Create an Online Verification (OLV) system that would allow for real-time verification of motor vehicle liability insurance. It would replace the state's current reporting system. Why it is good for consumers: Currently, insurers providing motor vehicle liability insurance on vehicles registered in New York report coverage information on those vehicles to the Department of Motor Vehicles (DMV) using the Insurance Information and Enforcement System (IIES.) The IIES technology, introduced and implemented in 1999, is outdated and relies on manual processing by both DMV and insurers. Manual entry makes it more likely that law enforcement officers will erroneously identify a driver who carries liability insurance as uninsured. They may unfairly accuse these drivers and ticket or even arrest them for failure to carry the required coverage. The drivers may face charges of misdemeanor driving without insurance. SUPPORT Market-Based Interest on Judgments (Executive Budget, PPGG Part R) What it does: This bill would permit a variable market-based, rather than a fixed 9% interest rate to be assessed on court judgments and accrued claims, resulting in lower State taxpayer costs and relief to local governments. Why it is good for consumers: This proposal would reduce the amount of interest paid by the State on court judgments and accrued claims by approximately $2.5 million annually. Additionally, passage of this bill would provide fiscal relief to local governments and businesses.
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This week, members of Big I NY's Group of 100 traveled to Albany for our “Day on the Hill" to meet with state lawmakers and urge them to support proposals that will help New York consumers. The state budget process is in full swing, and Governor's recently released budget includes many proposals that will impact policyholders.
First and foremost is the dire state of New York's insurance market. Policyholders are struggling with rising rates and shrinking availability, and agents are facing new challenges obtaining coverage for their customers. G100 members lobbied in support of common-sense changes to the recently enacted supplemental spousal liability law, including applying automatic coverage only to married insureds and exempting commercial auto policies. We also lobbied in support of a $400+ million investment in climate resiliency efforts, including grants for improvements to properties and funding for a voluntary buyout program for flood prone properties. We urged lawmakers to support a modernization of the state's insurance verification system to help prevent drivers from being unfairly penalized for errors in the reporting of their insurance status. We lobbied for the extension of the points reduction program which is a valuable tool to help drivers save money on their car insurance.
We strongly opposed a proposal to expand the states unfair, abusive, and deceptive acts and practices law. While well-intentioned, this expansion creates major incentives for litigation, including mandatory attorney's fees and minimum damages of $1,000 per violation. While we agree it is crucial to protect consumers from unfair business practices, this bill is very broadly and subjectively written and is certain to invite a wave of abusive lawsuits which will increase costs to businesses, and further strain the states precarious insurance market. After our meetings at the Capitol, we hosted a meet and greet reception with our members and members of the legislature and their staff. Agents had the opportunity to meet with their lawmakers, build new relationships, and discuss the importance and value of the independent insurance model. G100 members had the opportunity to speak up and make a difference for their customers and the industry, while learning and having fun. Thank you to all who joined us and helped make the day a success!
HEAR WHAT THE AGENTS HAVE TO SAY
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| With the new year upon us, let us take a moment to reflect upon 2023, which was easily the most effective and successful legislative session in recent history for Big I NY. The victories we achieved this year will have lasting impacts on independent agencies and their customers. These accomplishments were achieved, in no small part, due to the tireless advocacy of our members and our government affairs team in Albany.
Photo inspection reform and unfair quoting practices legislation signed into law: In 2023, Big I NY was successful in passing a law to allow insurance companies to waive CARCO inspections for the next four years. Based on similar initiatives in other states, we anticipate that this will reduce the number of photo inspections by over 90%, relieving customers and agents of a significant hassle. More importantly, customers will be spared from losing their comprehensive and collision coverage due to being unable to complete a photo inspection in time. This bill has been a priority for the association for over 20 years. Big I NY agents sent over 2,500 emails, signed over 1,600 petitions, made hundreds of phone calls, and held over 100 meetings with State lawmakers. This historic level of agent advocacy helped overcome numerous challenges and carried the bill to signature in November of 2023. The law will take effect on May 15th, 2024. Also this year, Big I NY celebrated the signature of another priority law which will protect consumers from misleading quoting practices. This new law will require insurance companies to run a customer's motor vehicle report (MVR) prior to binding coverage. This will eliminate the practice of companies offering policyholders a low quote and then subsequently raising premiums later after running the insurance MVR. Wrongful death expansion, non-compete ban bill defeated: Big I NY also scored two defensive victories this year with the veto of legislation to dramatically expand the state's wrongful death law, and a bill which would have banned the use of all non-compete agreements in the state. We joined a broad-based coalition of groups representing virtually every sector of the state's economy to urge governor Hochul to veto the wrongful death expansion bill. The bill would have dramatically increased both the volume of wrongful death lawsuits, and the value of awards and settlements, which would have had a devastating effect on the economy and the insurance market. We also urged the governor to veto the non-compete ban bill on the basis that it did not include an explicit exemption for the use of non-compete agreements in the sale or purchase of a business. If this bill had been signed into law, it would be a major disruption to agency sale and acquisitions. Met with top officials on the state of the insurance market: .jpg)
The deteriorating state of the New York insurance market was our top concern in 2023 and remains our top concern this year. Throughout last year, Big I NY was instrumental in engaging key leaders to draw attention to the need to stabilize the state's market. We issued a dire warning and subsequently met with Executive Deputy Superintendent of Insurance John Finston of the Department of Financial Services, Senator Neil Breslin, and Assembly Member David Weprin, chairs of the Senate and assembly insurance committees respectively. Big I NY testified before the State Assembly on the impact of extreme weather events on the insurance market.
Secured favorable changes to the New York cyber security regulation: Big I NY urged the Department of Financial Services to make favorable changes to the cybersecurity regulation, such as significantly expanding the limited exemption, and creating a total exemption for inactive licensees. Both changes were included in the final amendments to the regulation released this year. But we didn't stop there - we immediately published guidance to educate members on the new requirements and the effective dates, and subsequently partnered with the Department of Financial Services to offer a comprehensive training webinar. Stay tuned for updated compliance resources all available at no charge to Big I NY members. Hosted legislative events for agents and elected officials: 
Big I agents traveled to Washington DC to lobby our senators and members of Congress on pressing national issues such as the reauthorization of the national flood insurance program, new data privacy laws, and extension of important small business tax cuts. We also hosted legislative breakfasts in Central New York and Western New York with agents and state lawmakers from the regions. Set political fundraising records: In 2023, Big I NY members raised nearly $57,000 for Insurpac, our federal political action committee, and nearly $80,000 for IAPAC, our state political action committee. These funds were crucial in supporting the elections of state and federal candidates who understand and support the industry. Building on the momentum in 2024 and beyond: 
We're not resting on our laurels. With the start of the 2024 legislative session, your team at Big I NY is already hard at work. Our government affairs team is building relationships at the Capitol in Albany, and just this week, Lisa Lounsbury, CEO of Big I NY, represented the association at a private VIP reception with governor Kathy Hochul. Want to get involved and help us make 2024 even more successful than last year?
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| What Happened: Great news! Governor Hochul has taken favorable action on two key bills affecting IAs and their customers. On December 23rd, the Governor signed into law a Big I NY priority bill, A.4668-B, which will require carriers to run an insurance motor vehicle record before binding coverage. This will protect customers from unscrupulous quoting and pricing practices whereby certain carriers will bind a policy only to later run the MVR and substantially raise the premium. Responsible insurance agents and companies utilize all available underwriting resources prior to binding a policy for an insured. The practice of intentionally disregarding driver history information in order to present a false price to an insurance consumer undermines the credibility of the insurance industry as a whole. The governor also vetoed a sweeping bill which would have banned the use of all noncompete agreements in New York. Big I New York strongly opposed this bill, as it did not include and explicit exemption for the sale or purchase of a business. We lobbied the Governor to veto the bill on the basis that it would significantly harm the independent agency system.
What's Next: The governor signed the quoting fairness law on the condition that “chapter amendments" will be made to the law by the legislature. This means the legislature will quickly pass minor changes to the bill before it goes into effect. At this time we do not have the specific chapter amendment language, but based on conversations with the Governor's office we anticipate that the bill will apply only to new business and not renewals. The law will take effect on June 20th, 2024. The Governor had proposed reasonable limits to the noncompete bill but was unable to come to an agreement with the legislature, and therefore vetoed the bill outright. We anticipate that the legislature and the governor will continue to negotiate to reach a compromise in the coming session. Big I NY Has Your Back: We will continue to lobby to ensure that the noncompete bill, if passed, includes reasonable limitations to protect independent agencies and their customers. We will also work to educate independent agents on the coming changes to the quoting fairness law. This legislative session has been a powerful demonstration of the importance of agent advocacy. This year, we have now scored major legislative victories: the passage of the photo inspection reform law, passage of insurance quoting fairness law, and the veto of a noncompete ban bill. For each of these bills, agent participation, through emails phone calls and legislative meetings has been a key factor of our success. Want to do even more to help us amplify our impact in Albany? Contribute to IAPAC, our political action committee today!
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|  New York First is a partnership that brings together insurance company leaders and independent insurance agents that are members of Big I NY to advance issues and do research on behalf of the insurance industry. A recent example was in 2022 when the NY First governing committee spearheaded and funded an aggressive public relations campaign to allow insurance companies in New York to waive burdonsome CARCO inspections. This will save valuable staff time and help avoid situations where customers lose coverage because they were unable to complete an inspection.
Currently, New York First is providing essential data to support Big I NY's meetings with top insurance regulators to discuss the alarming state of the insurance market. Carriers that are intererested in joining NY First should contact Kathy Lawler at (315) 432-4218 or klawler@biginy.org. |
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