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Jan 22
Governor's Proposed Budget Includes Multiple Issues Affecting IAs

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:

No-Fault Reform 

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.

Electronic Notarization:

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.

Notably Absent:

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.

What's next:

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​.

 

 


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