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Sep 23
​ Albany Update: “Not One More Cost Hike" Campaign Launches

Last week, the Lawsuit Reform Alliance of New York, with support from Big I NY, launched a new ad campaign, “Not One More Cost Hike", in order to educate elected officials, local business owners, families, and voters of the costly consequences of A.6770/S.74-A. As written, the bill will radically expand the types of damages recoverable in wrongful death lawsuits – sending insurance premiums skyrocketing.

Agents are urged to contact Governor Hochul and ask her to veto this bill.

An analysis from global actuarial firm Milliman, Inc. finds that if A.6770/S.74-A is enacted, insurance costs – including personal auto and general liability for small businesses – could increase by more than $2 billion. For medical professional liability insurance, costs are projected to balloon by as much as 45%.

“Our local governments, doctors and hospitals, and our friends and neighbors can't afford one more cost hike in these difficult economic times," said Tom Stebbins, Executive Director of the Lawsuit Reform Alliance of New York. “If signed into law, this bill will drain municipal budgets, increase household expenses as we battle record inflation, and devastate New York's already strained healthcare system, disproportionately harming the medical professionals and hospitals that serve our communities."

Dr. Parag Mehta, President of the Medical Society of the State of New York, said, “New York's physicians have been fighting on the frontlines of the COVID, Monkeypox and now polio pandemics. This wrongful death bill passed by the State Legislature presents a new crisis for these physician heroes as it imposes new costs in malpractice insurance. This bill will be devastating for patients, as it undermines the financial survival of their primary care doctors, pediatricians, OBGYNS, any specialty doctor they see as well as emergency physicians – particularly those in underserved and diverse communities who are already financially challenged. New York physicians already pay among the highest liability costs in the country. They can't afford to watch this bill increase those costs by more than 40%, putting the integrity of our healthcare system at risk and chasing many physicians out of the state."

Peter Baynes, Executive Director of the New York State Conference of Mayors, said, “Local governments in New York already contend with a uniquely difficult liability environment and are roped into a disproportionate number of lawsuits, even when they have little or no connection to the underlying matter. Any increase in liability costs for the Empire State's cities, villages, counties and towns will divert taxpayer funds away from critical community services and reduce our ability to invest in the future. There should be reform across the board – before expanding liability, let's fix the laws that make New York's civil justice system the country's most expensive."

Lev Ginsburg, Esq., Counsel to The Business Council of New York State, said, "This is a difficult economic environment for everyone. We should be focused on good public policy that reduces costs, combats inflation, and eases the burden on our economy. Unfortunately, this bill would do just the opposite and drastically increase insurance premiums for businesses of all sizes. That means higher prices for consumers and when it comes to healthcare, double-digit increases for years to come."

Insurance costs for doctors and hospitals in New York State are already some of the highest in the country, especially in the Bronx and on Long Island. Leading the nation in medical liability lawsuit payouts, which totaled more than $430 million in 2021, New York remains among the states ranked worst for providers to practice, deterring physicians from opening their own practices.

A.6770/S.74-A was passed by both houses of the New York State Legislature in June and now awaits action from Governor Kathy Hochul. Once sent to her office, she has 10 days to sign or veto the bill.

 


Sep 09
Albany Update: Big I NY Calls for Veto of Harmful Workers Comp Bills

This week, we joined over forty business associations representing virtually every sector of the state's economy in urging Governor Hochul to veto three harmful workers compensation bills.​ If enacted, they would increase workers' compensation benefits by millions of dollars, resulting in higher costs and premiums for all New York State businesses, especially small businesses, at a time when they are contending with unrelenting economic challenge.

  • A.1118 (Bronson)/S.768 (Gounardes) redefines temporary total disability, marking a fundamental shift in the definition of disability and how wage replacement amounts are determined in New York State. This bill upends case law by allowing for unlimited awards at the temporary total rate for employees with mild or moderate partial disabilities. Under existing law, when a doctor finds that an employee has partially recovered from an injury, that employee must either seek out work that is commensurate with their degree of disability or risk losing their indemnity benefits. As passed, this bill would automatically qualify injured employees to receive benefits at the higher disability rate if it was determined they could not return to their pre-injury employment or a modified position. This will lead to significant and extremely damaging cost increases for the workers' compensation system. Many businesses, especially small businesses, do not have the financial or practical ability to accommodate light-duty work, and long-standing workers' compensation law recognized that important dynamic. This bill abandons the long-held tenets of workers' compensation law.
  • A.2020-A (Reyes)/S.8373-B (Savino) expands the statutory carve-out that applies to police officers, firefighters, and emergency medical technicians who filed a claim for mental injury premised upon extraordinary work-related stress to include all employees. This bill will permit all employees who allege extraordinary work-related stress to file a mental stress claim irrespective of a work-related emergency. Law Judges will determine what qualifies as “extraordinary," a standard that is not defined by statute, which will result in extensive litigation. Additionally, the bill would transfer the cost of treatment and disability for psychological conditions that are not currently considered work-related to the workers' compensation system. The cost to the system would be substantial.
  • A.7178-A (Joyner)/S.8271-A (Sanders) would increase the minimum amount of compensation from $150 to not less than 1/5 of Statewide Average Weekly Wage (SAWW) or employee's full wages if equal to or less than 1/5 of SAWW. The current minimum weekly indemnity rate for employees who earn more than $150 per week is $150. If enacted, this bill would grant employees who sustain accidents after June 30, 2022, to almost double the current minimum indemnity rate of $150 per week (weekly indemnity benefits would increase to no less than $337.64, which is 1/5 of the current SAWW of $1,688.19). Employees with wages less than or, equal to $337.64 per week would receive full salaries. The impact of this legislation would be most felt by businesses with part-time, seasonal, or lower-wage employees, and may deter employees from returning to work, exacerbating the labor shortage and keeping New York's unemployment rate higher than the national average.

Currently, none of these bills have been sent to the Governor's desk, however they must be sent before the end of the year. Once they are sent, the Governor has ten days to sign or veto them.

Contact Scott Hobson with any questions.

 


Sep 08
NYAIP Adds 'Intersex' and 'Unspecified' Gender Classifications

​The New York Automobile Insurance Plan (NYAIP) has announced forthcoming rule changes to create "intersex" and "unspecified" gender classifications used in developing premiums for drivers of vehicles insured through the Plan. The changes take effect on December 1, 2022.

The effected rules are:

  • Rule 22, Private Passenger Automobile Classifications, is amended to include a youthful intersex and unspecified classification and revise the definition of youthful operator to include intersex and unspecified. 
  • Rule 27, Driver Training Credit, is amended to reference classifications for youthful operators under the age of 21. 
  • Rule 42, Named Nonowner Coverage​, ​​is amended to revise the definition of youthful operator to include intersex and unspecified.​
  • The Class Factors Table in the Private Passenger Automobile Rate Chapter is amended to include class factors corresponding to the youthful intersex and unspecified classification. 
  • Rule 119, Leasing or Rental Concerns​, is amended to reference intersex and unspecified.​

If you are a producer certified to obtain coverage through the NYAIP, you need to be aware of these changes when they take effect in December.

Sep 08
URGENT: Add Sexual Harassment Hotline Info To Your Employee Handbooks

New York businesses are required to inform their employees about a new sexual harassment hotline, under a law that took effect in July. We urge all of you to add this information to your employee handbooks as soon as possible.

The law​, which became effective on July 14, required the state Division of Human Rights to set up "a toll free confidential hotline to provide individuals with complaints of workplace sexual harassment counsel and assistance.​" ​Attorneys experienced in counseling individuals with sexual harassment complaints staff the hotline on a pro-bono basis. 

The law also requires the DHR to work with the state Labor Department ​​"to ensure that information on the hotline is included in any materials employers must post or provide to employees regarding sexual harassment." While the Labor Department has not yet updated its model sexual harassment prevention policy for employers, you do not have to wait to update your employee handbooks and postings.

Affinity HR Group​, our endorsed human resources consulting firm has drafted the following text for you to add to your prevention policy statements:​

"Harassment Hotline
The state of New York provides a toll-free, confidential hotline which anyone experiencing sexual harassment in the workplace may use to connect with prop-bono attorneys on sexual harassment issues or to submit a complaint.
1-800-HARASS-3 (1-800-427-2773)."

We encourage you to insert this text into your handbooks or postings at your earliest opportunity. If you need assistance, contact Paige McAllister at Affinity HR Group at ​paige@affinityhrgroup.com​
Sep 07
ELANY: DFS is Fining Brokers For Pattern of Late Filings

​The Excess Line Association of New York (ELANY) has warned New York licensed excess line brokers of stepped-up enforcement of document filing requirements. In a bulletin ​dated August 15, 2022, the association said that the New York State Department of Financial Services (DFS) has been issuing fines to excess line brokers who "demonstrate a pattern of late policy document filings with ELANY."

The fines have been in the tens of thousands of dollars, the association said, with at least one reaching six figures. These are on top of the late-filing fees that ELANY imposes. Many states, including New York, require licensed producers to notify them of any disciplinary actions taken against them by another state. Therefore, a New York licensed excess line broker who is subject to one of these fines may have to report it to every state in which they are licensed.

In addition, the fines may be publicly reported in the DFS monthly insurance disciplinary action report.

ELANY recommends that all New York licensed excess line brokers:

  • Ensure that all filings are submitted on time, accurate, legible and complete
  • Respond to inquiries from ELANY promptly to avoid processing delays
  • Address current issues with timely filings quickly to avoid an extended pattern of late filings
  • Encourage producing retail brokers to use ELANY's Electronic Filing Portal for submitting the Part C - Affidavit by Producing Broker
  • Ensure that any hard copy affidavits submitted by excess line or retail brokers are typed and checked for completeness and accuracy.
Sep 07
NYS Workers Comp Board Offering Webinars For Employers

​The New York State Workers Compensation Board is is presenting monthly webinars for employers, starting today. You and your clients may find the information useful.

The webinars, presented by the Board's Advocate for Business, will address basics of the state's Workers' Compensation system, coverage requirements, and employer obligations. They will also address:

  • Who does and does not need coverage
  • How and when to report workplace injuries and illnesses, including cases of COVID-19
  • Factors to consider when an employer hires independent contractors, laborers and domestic workers
  • How to reduce premiums
  • Penalties and where to go for help with them

The sessions are free of charge and do not require pre-registration. More information can be found on the Board's Webinars For Employers web page. 

Sep 01
State Fund, OCM Announce Partnership To Help New Cannabis Businesses Get Workers Comp Coverage

320px-NYSIF_Logo_Tag_RGB.png​Used under under the Creative Commons Attribution-Share Alike 4.0 International license​.​

The New York State Office of Cannabis Management (OCM) has announced a campaign, led by the New York State Insurance Fund (NYSIF) to help newly-licensed cannabis businesses in the state obtain required insurance. NYSIF will lead the effort to help these businesses obtain Workers' Compensation, New York State Disability Law (DBL) and Paid Family Leave (PFL) insurance.

According to a news release on the NYSIF website:

"Eligible applicants can apply under the qualifying business or qualifying non-profit track. Prospective Qualifying Business applicants must: 

  • Have a conviction for a marijuana-related offense that occurred prior to the passage of the Marijuana Regulation and Tax Act (MRTA) on March 31, 2021, or have had a parent, legal guardian, child, spouse, or dependent with a pre-MRTA conviction for a marijuana-related offense in the State of New York. 
  • Have experience owning and operating a qualifying business that has been profitable for at least two years.
The specific ownership and control requirements will depend on the structure of the business applicants and the eligibility criteria under which they are applying. All applicants must be led by justice-involved individuals, whether they are an entity owned by more than one owner, an individual, sole-proprietor or single-owner entity."

The release also stated that qualifying businesses may be eligible for upfront premium discounts and membership in a safety group.

The New York State Assembly and Senate enacted a measure legalizing cannabis​ for sale to and use by adults as part of the 2021-22 state budget. Then-governor Andrew Cuomo signed it into law.  According to the OCM website, the office is now considering applications for Conditional Adult-Use Retail Dispensary licenses, positioning licensees "to make New York’s first legal cannabis sales before the end of 2022 ..."
Sep 01
What's in a Name? How To Change the Name on Your NY License

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​It doesn't happen often, but occasionally a New York licensed insurance agent or broker changes their name and needs to show that on their license. Subsection (f) of Section 2102 of the New York Insurance law requires a "licensee" to notify the state Department of Financial Services "upon changing his, her or its legal name."

Probably the most common reason for this is when a woman marries and assumes her husband's last name. The reverse may also occur - a marriage ends and the former wife wants to become known under her maiden name. And some folks just like to change names every few years.

Whaever the reason, you can ask DFS to change the name on your license by writing an email to its Licensing Bureau at licensing@dfs.ny.gov and providing the following:

  • A copy of your current license
  • Your date of birth
  • The last four digits of your Social Security number
  • A copy of your driver's license, if you have one, or alternative identification if you don't
  • A copy of your marriage certificate or other legal documentation of the change, such as a judge's order
  • The bureau will likely contact you if they have any questions or need additional information. Otherwise, your license should be amended before long.

That's pretty much all there is to it.

Aug 22
Big I NY Submits Comments on Draft Cyber Regulation Amendments

This week, Big I NY submitted commen​ts on the DFS' pre-proposed draft amendments to the Cyber Regulation. You can read more about the draft amendments in an earlier post here.​

In our comments, we recommended changes to the amendments that would help alleviate new burdens on producers, while still ensuring non-public information (NPI) is protected.

Some of the key points include:

  • Expanding the revenue threshold of the limited exemption to correspond with the proposed higher thresholds for employee count and assets, and clarifying that only independent contractors with access to NPI be counted towards the employee count.
  • Expanding the total exemption for inactive licensees to include brokers in addition to agents.
  • Exempt covered entities from the requirement to “cross police" each other as third party service providers, consistent with regulations adopted in nearly half of all states.
  • Remove the proposed requirement that covered entities not in compliance certify their noncompliance annually and specifically identify cybersecurity deficiencies.
  • Clarify that risk assessments need only be conducted annually if there is a material change to the entity's cybersecurity risk.
  • Clarify that penalties are assessed after a failure to comply with the regulation only where such noncompliance is intentional, and lengthen that time period from 24 to 72 hours.

You can read our full comments here. The DFS will now consider the pre-proposal feedback, then release the official proposed amendments. At that point, stakeholders will have further opportunity to provide additional comments before the regulation is adopted. ​


Aug 19
Insurers, Get Your Act Together on Commercial Lines Renewals

hammer-g6987a2faa_640.jpg[The following is an updated version of a post from 2014. Unfortunately, the message is still very relevant in 2022.]

I turned 61 last month. (Insert jokes about old age here.) A few weeks before I turned 25, way back during the Ronald Reagan years, the New York State Legislature passed and Gov. Mario M. Cuomo signed a bill into law, formally known as Chapter 220 of the Laws of 1986. It slapped new requirements on insurers​ that wanted to cancel or non-renew commercial insurance policies or make major changes to them. No longer could insurers double a business’s premium or exclude important coverage with no advance notice, or non-renew a policy with a month’s notice.
 
I was an underwriting assistant with a large national insurer group at the time, and I remember what a big deal this change was. The underwriters in my office knew that this would take some getting used to. When I became an underwriter, I also had to work within its confines. It wasn’t always easy, but it was the law. The rules may cause underwriters some additional work they don’t want, but they’re not all that difficult to understand.
 
This law, New York Insurance Law Section 3426, is now 36 ​years old, meaning that since its enactment:

  •  A half dozen Big I New York employees were born
  •  The World Wide Web, DVD technology, the iPhone, the Sony PlayStation, Google and text messaging were invented
  •  Six U.S. presidents were elected, three of them twice
  • The following TV shows began and ended their runs: Friends; Seinfeld; The West Wing; ​The Sopranos; The Wire;  ER; ​all iterations of ​CSI; Criminal Minds; Breaking Bad; Game of Thrones;​ and many more
  • The insurer groups USF&G, Continental, St. Paul, General Accident, and The Home ceased to exist
  • The Gecko, Flo, Mayhem, and Jake From State Farm were introduced
And yet, even after all this time, too many insurers either can’t or won’t follow this law. It passed the point of being ridiculous a long time ago.

At least once a week, I receive complaints from Big I New York members such as these:

  • A carrier sent a conditional renewal notice on a commercial property policy, indicating that the premium would increase by more than 10% and the "all other perils" deductible would increase to $25,000. The renewal policy arrived with the flood deductible having increased from $25,000 to $250,000. Despite the lack of prior notice, the carrier declined to return the deductible to its previous level.
  •  An underwriter had a letter sent to the insured before renewal but claimed it "wasn't a 220 notice" and therefore the letter did not have to mention the new $10,000 general liability insurance deductible that showed up on the renewal policy.
  • An underwriter informed an agent that a $500,000 commercial property policy would simply expire if the insured did not give the agent a bind order before expiration. The insured was out of the office and unreachable.
  • A carrier notified several commercial insurance policyholders that it would add a new Abuse or Molestation exclusion to their liability policies in the middle of the policy terms. 
  • An underwriter issued a renewal policy more than 60 days before the expiration date. Because of this, he believed that he did not have to send a conditional renewal notice about coverage and premium changes.
  •  An underwriter believed that he could hike the renewal premium by 17 percent without sending a conditional renewal notice. He had switched the policy from one insurer in his group to another. He believed that this absolved him of responsibility for sending a notice.

I wish I could say that this is a new problem, but it’s not. I receive so many emails about problems our members have with insurers on this, I saved the law’s text as auto-text in Microsoft Outlook. I can insert the text in an email with two clicks of my mouse. It’s saving me a lot of time. I've taught webinars and in-person courses about the law’s requirements. I’ve written blog posts and even done an episode of my old podcast on the topic. I’ve been on this job for 20 years, and I probably got my first question about this law on day two.

Here are the facts from the law itself.

  • It applies to commercial risk, professional liability, and public entity insurance policies.
  •  It defines “renewal” or “to renew” as “the issuance or offer to issue by an insurer of a policy superseding a policy previously issued and delivered by the same insurer, or another insurer under common control.”
  •  An insurer must provide a written notice to the first-named insured and the insured’s authorized agent or broker if it decides not to renew a policy. It also must provide the notice if it decides to renew with certain coverage changes or premium increases. Otherwise, the policy shall remain in full force and effect pursuant to the same terms, conditions and rates.”
  • The insurer must send the notice if it wants to change limits; change the type of coverage; reduce coverage; increase deductibles; add exclusions; or increase the premium more than 10 percent (not counting any premium increase generated as a result of increased exposure units, or as a result of experience rating, loss rating, retrospective rating or audit.)
  • The notice must contain the specific reason or reasons for the insurer’s actions; provide the amount or a reasonable estimate of any premium increase; and describe in plain and concise terms the nature of any other proposed changes.
  • The notice must inform the insured and the agent or broker that either may obtain the insured’s loss information from the insurer. The insurer must provide this information within 10 days of a request for it.
  • For most policies, the insurer must provide the notice 60 to 120 days before the expiration date. It must send notices for umbrella or excess liability policies and policies issued to very large businesses 30 to 120 days in advance.
  • If the insurer sends the notice less than 60 days before the expiration date, it must extend the expiring coverage and rates. The extension must be for 60 days from the date of the notice. The only exception to this rule is if the insurer sends a conditional renewal notice at least 30 days in advance and the insured does not replace the policy. If the insurer sends the notice on or after the expiration date, the insured is entitled to another full year of coverage. This coverage must be at the same terms and conditions of the expired policy and at either the expiring rates or the renewal rates, whichever is less.
  • The law does not apply to some types of policies, notably assigned risk auto, property policies issued by the FAIR plan, Workers' Comp, surety, inland and ocean marine, excess line policies, and personal lines policies (personal lines is governed by a different law.)

Folks, this isn’t that hard. You have to give your policyholders at least two months’ warning if you’re going to drop them, change or reduce their coverage, or hike their premiums. You can’t play cutesy games to get out of it by switching the coverage to another insurer in your group. You can’t just issue the renewal policy two months early and let the insured figure it out. You have to tell them what changed and why, and you have to let them know they can get their loss history. You can’t just let a policy expire.

If this was a new law, I could understand the confusion, but it isn’t and I don’t. If you manage an underwriting team and your people are not fully complying, this is your fault. Don’t rely on a cheat sheet or some other shortcut to educate them; give them a copy of the law. You can download it from the Big I New York website​. For all that, give them a copy of this post. Just make sure they’re following the law.

Yes, it’s a hassle, but it’s part of doing commercial lines business in New York. And lest this start a litany of posts about how New York hates business, be aware that 18 other states also require 60 days’ notice of nonrenewal. Kentucky requires 75 days’ notice, and two states require 90 days’ notice for medical malpractice liability policies​. More than half the states require at least 30 days’ advance notice of material changes and/or premium increases. New York is not unique in this respect.

This law has been on the books for almost four ​decades. Every insurer operating in this state should be accustomed to it by now. Stop trying to wiggle your way out of the requirements. It makes you look dishonest, whether you mean it to or not. Educate your underwriters so they know what they have to do. The insurance business is difficult enough for underwriters, agents and brokers without having to deal with easily solvable compliance issues. Follow the rules.
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