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Jun 12
Legislative Update: Session Adjourns with Significant Wins for IAs; Other Insurance-Related Bills Pass Legislature

The New York State Senate and Assembly adjourned for the year on Saturday after a flurry of last-minute activity. Throughout the session, Big I NY's government relations team engaged on dozens of bills, and when the dust settled, the value of our efforts was clear.

Supplemental Spousal Liability Changes Passed:

Both houses of the legislature passed Big I NY-backed changes to supplemental spousal liability insurance, exempting unmarried drivers and commercial coverage from automatic enrollment. These common-sense changes will end the frustration experienced by many customers when the automatic enrollment law went into effect last year. Governor Hochul is expected to sign this legislation into law.

Harmful Anti-Business Bills Blocked:

Big I NY was also instrumental in blocking a disastrous bill which would have substantially increased the liability exposure of all businesses. The bill would have expanded the scope of prohibited business practices to allow private lawsuits for even the most minor of perceived violations and created generous incentives for consumers to file lawsuits. This would result in a wave of abusive litigation against businesses and make it more difficult and costly to obtain coverage. Big I NY was the only producer group to forcefully oppose this legislation, joining with dozens of employer associations throughout the session to voice our concerns. Big I NY agents sent over 500 emails to their lawmakers and made nearly a hundred phone calls to Assembly leadership in the closing days of session. These efforts paid off, with the Senate amending the bill to exclude DFS-licensed entities and individuals, and the Assembly declining to bring the bill to a vote by the full house.

The legislature also failed to act on sweeping legislation to ban the use of non-compete agreements, which Big I NY opposed. This would have significantly disrupted our industry and created a significant barrier to mergers and acquisitions.

We also strongly opposed a bill which would throw the rental habitational coverage market into turmoil by banning the use of lead paint exclusions. While well-intentioned, this enormous potential claim costs of this bill would drive carriers from the market and make rates unaffordable. The Assembly passed the bill, but it was successfully blocked in the Senate.

Wrongful Death Expansion Bill Passed, But Future Uncertain:

Both houses of the legislature passed legislation significantly expanding the scope and potential damages for wrongful death lawsuits. Big I NY, along with a broad coalition of groups representing insurance, business, healthcare, and local governments, strongly opposed this bill, as it would substantially increase insurance costs. The bill's future remains uncertain – it has been vetoed twice by Governor Hochul, and the version passed this session does little to address the concerns she identified. We will again urge the Governor to veto this harmful proposal.

Other Legislation of Interest Passed by the Legislature:

Uniform Windstorm Deductible Trigger

Position: Support

Status: Passed both houses

Summary: This bill directs the NYSDFS to establish regulations to create uniformity in the operation of windstorm deductibles. Currently, insurers utilize a wide range of windstorm deductible definitions and deductibles, resulting in confusion among consumers over what is covered and their potential exposure. This bill benefit consumers and independent agents by reducing confusion through uniform industry standards.


Mental Injury Claims for Work-Related Stress

Position: Oppose

Status: Passed Senate and Assembly

Summary: This bill expands to all workers the ability to receive PTSD coverage under NYS

Workers' Compensation Coverage identified work-related stress. This bill will increase workers' compensation coverage costs and is likely to result in a rise in fraudulent claims.


Authorizing Stand-Alone Business Interruption Insurance

Position: Neutral

Status: Passed Senate and Assembly

Summary: As demonstrated with the COVID-19 pandemic, a business may be forced to close without the insured property or neighboring property suffering physical damage. Also, insurers, particularly in the excess line market, wish to write business interruption insurance that is not tied physical damage as part of active shooter policies. This bill would amend Insurance Law § 1113(a) to make business interruption insurance an authorized kind of insurance that does not need to be tied to physical damage and would amend Insurance Law § 2105 to permit this insurance to be written in the excess line market if it is unavailable from authorized insurers.


Limitations on Anti-Concurrent Causation Clauses

Position: Neutral

Status: Passed Senate and Assembly

Summary: This legislation will prohibit an insurance policy from excluding coverage for any loss of or damage to property resulting from water or water-borne material that backs up through sewers or drains, or overflows or is discharged from a sump, sump pump, or related equipment, on the ground that the loss or damage also may have been caused directly or indirectly by an excluded peril contributing concurrently or in any sequence to cause the loss. The bill applies only to non-commercial policies.


Owner Controlled Insurance Programs

Position: Neutral

Status: Passed Senate and Assembly

Summary: The purpose of this bill is to allow the Department of Transportation, The State University of New York at Buffalo, and the Niagara Frontier Transportation Authority to utilize owner-controlled and contractor-controlled insurance programs in connection with certain construction projects.

 

Legislation of Interest Not Passed by the Legislature:

Elimination of the “Diligent Effort" Requirement for Commercial Excess Lines Transactions

Position: Support

Status: Passed Senate, did not advance in Assembly

Summary:  This bill eliminates the requirement to obtain three declinations from admitted insurance carriers before placing commercial coverage in the excess market, in situations where coverage is placed by a licensed excess lines broker. The excess market offers greater flexibility on rate and coverage than admitted coverage. It is of vital importance to effectively serve consumer needs. The current process of requiring three declinations creates unnecessary time and paperwork burdens for agents and their insureds and can result in a delay getting the proper coverage.


Elimination of the NYC Anti-Arson Application

Position: Support

Status: Passed Assembly, did not advance in Senate

Summary: This bill eliminates the anti-arson application required for fire insurance coverage on properties within New York City. In 1981 when New York first enacted its anti-arson application law, arson for profit was a significant economic and societal problem. New York's anti-arson

application law was enacted to give insurers ownership and property valuation information to assist in the investigation of arson for profit and to require property owners to sign a fraud statement. However, present-day arson investigation techniques no longer rely on the anti-arson application form to determine ownership and property valuation and fraud statements are collected through other means when adjusting a loss. Insurers have access to a multitude of third-party sources to determine ownership and property values. Since the information collected on the form is no longer used, completing and collecting the form (which is required for both new and renewed insurance policies) creates a significant burden for both consumers and insurers.


Stricter Penalties for Staged Construction Accidents

Position: Support

Status: Did not pass Senate or Assembly

​Summary: This bill establishes the crime of staging a construction accident, which is a class E felony. Staged construction accidents harm all New Yorkers. The workers involved in these schemes, sometimes unwittingly, may be harmed or coerced to undergo risky and even dangerous medical procedures. Fraudulent claims drive up costs to all insureds and taxpayers, delay the completion of important projects, and exacerbate the state's already strained insurance market. They drain resources from fraud investigators and law enforcement. Recent reporting has revealed that staged accident fraud is on the rise, orchestrated by sophisticated criminal enterprises. Our current law is inadequate, and serious criminal penalties are needed to deter this costly and dangerous crime.

 

Increased Penalties for Orchestrating Staged Auto Accidents

Position: Support

Status: Did not pass Senate or Assembly

Summary: This bill imposes criminal penalties on those who recruit, hire, or otherwise direct others to engage in staged auto accidents. On March 22, 2003, Alice Ross, a 71-year-old grandmother, was killed as the result of a staged auto accident. These "accidents" are often arranged and intentionally committed by criminals who then file fraudulent insurance claims for fake crash injuries and rob insurance companies and their policyholders. While the economic cost of such activity is staggering with no-fault insurance fraud estimated to cost insurance companies and their policyholders $1 billion per year, staged accidents also pose a serious public safety risk, as is demonstrated by the untimely death of Alice Ross. In 2019, New York state signed “Alice's Law," which criminalizes directly participating in a staged motor vehicle accident. This legislation builds on that important law by extending its provisions to individuals who “mastermind" fraud by directing or coercing others to participate in a staged accident scheme.

 

Online Insurance Verification

Position: Support

Status: Did not pass Senate or Assembly

Summary: This legislation would improve fairness and reduce frustration for New York drivers. The current system for verifying insurance coverage, the Insurance Information and Enforcement System (IIES), is now a quarter of a century old. It relies heavily on manual entry and manual submission of coverage information, which results in delays and errors in the reporting of a driver's insurance status.


Questions? Contact Scott Hobson, AVP of Government Relations​

 


May 30
Agents In Action: Big I NY Members Meet with Key Lawmakers In-District

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Throughout the month of May, approximately 40 independent agents from across the state met with state lawmakers in their districts to call for the passage of pro-consumer legislation to help customers and agencies weather the challenging market. Agents met with 17 lawmakers who were identified as key votes on our bills.

In the meetings, agents advocated in support of several important pieces of legislation,​ including bills to eliminate the diligent effort requirement for commercial excess lines coverage, eliminate the NYC anti-arson application, impose stricter penalties for staged construction accidents and staged auto accidents, and combine agent and broker licenses into a single “producer" license. They also urged the legislature to reject a bill to expand the state's unfair business practices law, which would result in a surge of opportunistic lawsuits against New York businesses.

These meetings helped educate state lawmakers on the importance of our industry and the impact their decisions have on their constituents. Independent agents are powerful advocates for their customers!


May 29
NYS DFS Urges Carriers To Offer Homeowners Loss Mitigation Devices, Discounts

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The New York State Department of Financial Services is encouraging property-casualty insurance carriers to offer their homeowners insureds free or discounted loss mitigation tools and services. In a new Circular Letter, the department also encouraged carriers, rate service organizations (RSOs, such as the Insurance Services Office,) and the New York Property Insurance Underwriting Association (NYPIUA) to file premium discounts for insureds who use the devices and services.

The May 23 letter, signed by Deputy Superintendent of the department's Property Bureau Bernard Ganley, noted difficulties in the current insurance market. The purpose of the Circular Letter, he wrote, was “to reduce risks and costs to ensure a more affordable and resilient market."

The letter acknowledged the limitations in New York's law against rebating and discrimination. That law places a $25 limit on a benefit not specified in a policy. Carriers will have to specify in their policies any devices or services that have market values above that amount. In addition, they must have a legitimate connection to the insurance and be “necessarily or properly incidental" to the carrier's insurance business. The letter gave smart water monitor and shutoff devices and electrical fire sensors and monitors as examples of devices that would receive approval. Carriers who want to add these benefits to their policies will be expected to specify:

  • What is being offered.
  • Who is paying for it.
  • How much an insured must pay.

The department also called on carriers, NYPIUA, and RSOs to file “actuarially appropriate discounts to insureds for the installation of devices or systems that mitigate or prevent losses, including, but not limited to, smoke alarms, sprinkler systems, fire extinguishers, and deadbolt locks."

The letter predicted that offering these devices to insureds “will strengthen the financial condition of insurers, lower costs for insureds, and result in a more stable and resilient insurance market."

Agents and brokers may start to see carriers offering these programs over the next 12 to months.

May 29
Adirondack’s Demotech Rating Withdrawn

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Adirondack Insurance Exchange, an insurance carrier writing personal lines coverages only in New York, has lost its financial stability rating (FSR) from Demotech. The carrier announced the May 28 action to its agents and policyholders that afternoon. Demotech, an Ohio-based financial analysis firm that provides FSRs for insurance companies, did not offer an explanation on its website for the move.

Adirondack agents received email notifications late on May 28. The carrier, a member of the Allstate Insurance Group, posted this update for policyholders on its website:

“Demotech, Inc., a provider of financial stability ratings of property-casualty insurance companies, has withdrawn its financial stability rating for the Adirondack Insurance Exchange. This could impact you if you have a mortgage with a lender that requires you to carry homeowners insurance with an insurer that has a minimum financial stability rating. If you are impacted, your lender will notify you and we encourage to you to work with your Independent Agent and to evaluate options available to you. Adirondack will mail a letter notifying policyholders of this rating change."

Big I New York members who have placed coverage with Adirondack may want to consider contacting affected clients. Our ebook The Big I NY Big Book of Form Letters & Other E&O Tools contains a form letter for contacting an insured whose carrier has been downgraded. The letter can be adapted to fit this situation. The book is a free member benefit for Big I New York members; non-members can download it at a cost of $99.00. 

May 23
NYS DFS Disciplinary Actions: Be Careful When Charging Fees & Running Ads; Renew Your License

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The latest insurance disciplinary action report from the New York State Department of Financial Services is out. Most of it is not particularly noteworthy. There were 27 actions taken against agents and/or brokers, and 17 were for failure to report or disclose various run-ins with the law or regulatory authorities. Only 9 actions were taken against New York resident agents and/or brokers, and 3 of them were in the failure to report/disclose category. The six other actions against New York resident producers were:

  • $1,000 fine for running two Facebook ads that referred to insurers without including the name of the city where they are headquartered.
  • $2,000 fine for putting false premium payment information on four applications for condominium insurance policies.
  • $45,000 fine for acting as an insurance producer without a license for seven and a half months in 2023. The maximum fine is $500 per offense, so this person must have written 90 new policies without a license.
  • $3,000 against a captive agent for forming an unapproved new agency and shifting business to it to qualify for a larger performance bonus.
  • $10,500 fine for collecting service fees from insureds without obtaining their written consent; sitting on an insured's premium payment too long without sending it to the carrier; and for submitting false information to the department.
  • $9,500 fine for acting as an insurance producer without a license for six weeks in 2023 and doing business under an unapproved agency name.

Non-residents got far stiffer penalties:

  • There were two license revocations. One was for lying to an insured, enrolling an insured in a medical plan without her consent; ignoring department investigatory letters; and failing to report disciplinary actions taken by two other states. The other was for not reporting a guilty plea in criminal court.
  • A Massachusetts agency/adjusting firm and two of its sublicensees were fined $1.5 million for operating for three and a half years without broker or independent adjuster licenses, permitting unlicensed individuals to act as adjusters and brokers, and compensating someone for acting as an adjuster without a license.
  • A Utah brokerage paid $85,990 for failing to make filings on time to the Excess Line Association of New York over a five-year period.
  • Finally, a Texas independent adjusting firm was fined $800,000 for acting without a license and paying three unlicensed individuals who acted as adjusters.

I think the actions that are most relevant to Big I New York members are the ones regarding the Facebook posts, the charging of service fees, and acting without licenses.

  • We regularly get questions about service fees, so before you charge them, visit the Service Fees page in the Answer Center of our website.
  • It's also not unusual for members to simply forget to renew their licenses. Remember that your license = your livelihood. If it expires, the law forbids you from selling new policies, so please don't forget to take care of it.
  • Lastly, it is still the law in New York that a producer's advertisement that mentions an insurer must provide the insurer's full name and the name of the city, town, or village in which it has its principal office. I think that law is antiquated, but while it is in effect the DFS may enforce it. Take care with your ads, including social media posts and websites.

I will now reveal my age by quoting an old favorite TV show, Hill Street Blues: “Let's be careful out there."

May 22
WC Construction Payroll Limit Increasing To $1,757.19

​The New York Compensation Insurance Rating Board has announced that the maximum payroll for calculating Workers Compensation insurance premiums for construction employers will increase to $1,757.19 per week. The change takes effect on July 1.

State insurance law requires that the payroll for certain construction classifications be limited to a percentage of the Statewide Average Weekly Wage for the previous calendar year. The adjustment occurs annually on July 1. 

Read the Board's announcement​

May 22
Max Weekly WC Benefit Rising To $1,171.46

​The New York State Workers Compensation Board has announced that the maximum weekly disability benefit will increase to $1,171.46. The change takes effect on July 1 and applies to injuries occurring on that date and before July 1, 2025.

State Workers' Compensation Law requires the maximum weekly benefit to equal two-thirds of the Statewide Average Weekly Wage (SAWW) for the previous calendar year. The level is reset annually on July 1. The state Labor Department reported that the 2023 SAWW was $1,757.19.

The rate for July 1, 2023 to June 30, 2024 is $1,145.43​.

Read the Board's announcement

May 17
Albany Update: CARCO Law Now In Effect, Big I NY Calls for Lawsuit Lending Divestment, Opposition to Unfair Business Practices Expansion

Big I NY's Photo Inspection Law Now Effective

On May 15th, our law to allow carriers to waive CARCO inspections​ went into effect. From now until October 2027, carriers doing business in NY may waive any or all CARCO inspections. Already, many carriers have announced they are waiving inspections, including Safeco, Travelers, Plymouth Rock, National General, and New York Central Mutual. We expect more carriers to follow suit.

Big I NY Calls for Lawsuit Lending Divestment

This week, Big I NY joined groups representing businesses, municipalities, and insurers, in urging the New York State and New York City pension funds to investigate and divest from third party litigation financing (TPLF). In a letter to New York State Comptroller Tom DiNapoli and New York City Comptroller Brad Lander, which was covered by the New York Post, we wrote, “With no regulatory framework or disclosure requirements, TPLF is a substantial threat to the state's civil justice system and consumers. The offer by lenders to plaintiffs of easy, up-front cash increases the occurrence of filing of dubious claims, including against local and state governments. TPLF also deters a rational settlement process; compromises the attorney-client relationship by prioritizing their own profits over plaintiffs' best interest; and contributes to skyrocketing insurance premiums."

Big I NY Urges Lawmakers to Reject Unfair Business Practices Expansion

On May 14th, Big I NY and over 30 other groups issued a letter to state lawmakers urging them to reject a disastrous expansion of the state's unfair business practices law​. New Yorkers already face the highest risk of litigation and the highest litigation costs. This proposal will make the Empire State even more litigious, burdening companies with increased risk of catastrophic liability. While the bill purports to offer remedies to small businesses, local firms already have a vast body of contract law to protect against misrepresentations and unfair practices. The potential for excessive damages and increased litigation costs will not only harm these businesses but lead to higher prices for consumers. This is particularly concerning for small businesses that operate on narrow margins and are still recovering from the economic impact of the pandemic.

We urge agents to contact their lawmakers and register their opposition. This bill, if enacted, would be disastrous to the state's business climate, further destabilize the insurance market, and expose independent insurance agencies to considerable liability and shakedown lawsuits. 


May 17
NYS DFS Offers New Cyber Program Template

cyber-temp.jpg​The New York State Department of Financial Services (DFS) this week unveiled a new model Cybersecurity Program Template for use by small businesses including insurance agencies. All independent insurance agencies should consider using this template as the model for their cybersecurity programs. New York's financial services cybersecurity regulation requires all agencies to implement cybersecurity programs. 

In a guidance letter dated May 13, 2024, the department stated that the model "prompts licensees to carefully consider and address the core concepts of a cybersecurity program in order to help create a program that complies with the requirements of the Cybersecurity Regulation." It also includes frameworks for developing and tracking:

  • Asset inventories 
  • Risk assessments 
  • Multi-factor authentication exceptions, and 
  • Third-party service providers. 

The template is available for you to download from the DFS website and at www.biginy.org/cyber

May 16
Preferred Mutual Earns 2024 Top Workplaces USA Award
The Evening Sun | Preferred Mutual Insurance Company Named As Top 2024  Workplace By Energage 

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ENERGAGE NAMES PREFERRED MUTUAL INSURANCE COMPANY A WINNER OF THE 2024 TOP WORKPLACES USA

 

New Berlin, New York, March 20, 2024

Preferred Mutual Insurance Company has announced it has earned the 2024 Top Workplaces USA award, issued by Energage, a purpose-driven organization that develops solutions to build and brand Top Workplaces. The Top Workplaces program has a 15-year history of surveying more than 20 million employees and recognizing the top organizations across 60 markets for regional Top Workplaces awards.


"At Preferred Mutual, we are committed to maintaining a people-first culture," said Preferred Mutual Insurance Company President & CEO R. Benedikt Sander. "We are honored our commitment to putting people first is recognized."


Top Workplaces USA celebrates organizations with 150 or more employees that have built great cultures. Over 42,000 organizations were invited to participate in the Top Workplaces USA survey. Winners of the Top Workplaces USA list are chosen based solely on employee feedback gathered through an employee engagement survey, issued by Energage.


Results are calculated by comparing the survey's research-based statements, including 15 Culture Drivers that are proven to predict high performance against industry benchmarks.


“Earning a Top Workplaces award is a badge of honor for companies, especially because it comes authentically from their employees," said Eric Rubino, Energage CEO. “That's something to be proud of. In today's market, leaders must ensure they're allowing employees to have a voice and be heard. That's paramount. Top Workplaces do this, and it pays dividends."


About Preferred Mutual Insurance

Preferred Mutual Insurance Company provides property and casualty insurance coverage to more than 232,000 individual and business customers through a network of more than 560 independent agents located throughout New York, New Jersey, Massachusetts, and New Hampshire. In business since 1896, Preferred Mutual is rated “A" by AM Best Company and is headquartered in New Berlin, New York. Learn more at www.preferredmutual.com.


Company Contact

Grady Thompson

corporate.communications@preferredmutual.com

607.847.1616

https://www.preferredmutual.com​


About Energage

Making the world a better place to work together.TM

Energage is a purpose-driven company that helps organizations turn employee feedback into useful business intelligence and credible employer recognition through Top Workplaces. Built on 18 years of culture research and the results from 27 million employees surveyed across more than 70,000 organizations,  Energage delivers the most accurate competitive benchmark available. With access to a unique combination of patented analytic tools and expert guidance, Energage customers lead the competition with an engaged workforce and an opportunity to gain recognition for their people-first approach to culture. For more information or to nominate your organization, visit energage.com or topworkplaces.com.

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