| 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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A magnitude 4.8 earthquake centered west of Manhattan struck the northeastern U.S. this morning. We at Big I New York hope that all of you, your families, friends, and clients are safe and suffered no injuries. However, it is possible that some of your clients suffered property damage. Your phones may ring with calls asking whether homeowners and commercial property insurance covers the damage. Here is what you and they need to know: Standard homeowners and commercial property insurance policies typically do not insure against damage caused by earthquakes or other types of earth movement. The ISO Homeowners 3 – Special Form states that the insurer does not insure for loss caused directly or indirectly by earthquake, landslide, mudslide, or earth sinking, rising, or shifting. We have reviewed the homeowners policies of four carriers that use their own forms; all have similar exclusions. The ISO Commercial Property Causes of Loss – Special Form contains an almost identical exclusion. Personal and commercial auto insurance policies typically cover damage to a vehicle caused by an earthquake if the policyholder purchased Comprehensive Coverage on the vehicle. If your personal or commercial clients purchased earthquake insurance, their policies would include earthquake coverage endorsements. Examples include: - ISO homeowners endorsement HO 04 54 03 22
- Travelers homeowners endorsement HQ-054 CW (02-20)
- ISO commercial property endorsement CP 10 40 02 19
- ISO businessowners policy endorsement BP 10 03 07 13
Deductibles for earthquake coverage are typically a percentage of the limit of insurance on the covered property. For example, the dollar earthquake deductible for a dwelling insured for $400,000 with a 5% deductible is $20,000. The deductibles typically apply separately to buildings and personal property. If the deductible is 5%, and the homeowners policy insures the dwelling for $400,000 and the contents for $200,000, the insurer will apply two deductibles – one of $20,000, the other of $10,000, for a total of $30,000. “Difference In Conditions" commercial property insurance policies typically provide earthquake coverage subject to a large deductible such as $50,000. Some inland marine coverage forms may also provide the coverage as an option. For example, builders risk and installation floater policies often have coverage available by endorsement. The Insurance Information Institute offers these explainers for those who want more information: If you have specific questions, feel free to email us at expert@biginy.org.
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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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