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History
- Referred to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limits an insurer's reduction of coverage by limiting the volume of notices of intention to four percent, establishes standards for definitions; repealer
In Assembly Committee · Insurance · Sponsor Robert Sweeney
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S5034
Title of bill
An act to amend the insurance law, in relation to limiting the scope of an insurer's reduction of insurance coverage by limiting the volume of notices of intention to not renew or condition renewal to four percent of the total number of covered policies of such insurer's rating territory; and in relation to establishing standards for definitions contained within such law; and to repeal certain provisions of the insurance law relating thereto
Purpose
To limit an insurer's reduction of coverage by limiting the volume of notices of intention to four percent, establishes standards for definitions; repealer.
Read the full memo (621 words)
Summary of provisions
Section 1 requires that a plan be filed with the superintendent if an insurer plans to reduce the net number of homeowners insurance policies within any such insurer's rating territory in use in this state by 20% or reduce the net number of such policies it writes by five hundred, within 5 years, whichever is greater. A plan shall also be required to be filed with the superintendent when an insurer plans to reduce the net number of such policies it has in force in a twelve month period within any such insurer's rating territory in use in this state by 4% or more or the net number of such policies it writes by one hundred, whichever is greater.
Section 2 of the bill repeals section 5412(g) of the Insurance law, thereby making NYPIUA permanent.
Justification
Section 1. Currently an insurer may withdraw its homeowners' insurance coverage from an entire region of New York State without approaching the threshold requiring them to file a plan with the superintendent of insurance. This legislation would limit the amount an insurer could reduce its coverage of homeowners insurance policies to no more than 20% over five years or no more than 4% over twelve months per rating territory in use in this state.
Section 2. NYPIUA, a joint underwriting association made up of insurers writing property insurance in New York, affords the following coverages to commercial and residential policyholders unable to obtain such coverage in the voluntary market: fire and extended coverage (such as windstorm); vandalism and malicious mischief; sprinkler leakage; loss of rent; and business interruption insurance.
NYPIUA has served as a vital economic safety net in New York, taking in a surge of new policies for properties in New York's coastal areas in the mid-1990's. More recently, NYPIUA has seen growth in new commercial policies, as it has become difficult for some businesses to obtain coverage in the voluntary market. More than 50,000 homeowners and 7,000 businesses currently insure their properties in NYPIUA.
Chapter 220 of the laws of 1986 added a new Insurance Law Section 5412 to NYPIUA's authorizing statute granting standby powers to the Association to write commercial risk insurance, public entity insurance and professional liability insurance. The Association will write these coverages only if the superintendent determines, after a public hearing, that it is necessarily due to the unavailability of meaningful coverage in a particular voluntary market. Chapter 42 of the Laws of 1996 added homeowners' insurance to the coverages NYPIUA could be activated to write. It is important that NYPIUA be made permanent and that the superintendent's ability to invoke this authority be preserved to ensure the availability of insurance when restrictive market conditions arise.
The temporary nature of NYPIUA has precluded it from drawing on resources such as letters of credit, or a line of credit to ensure a ready cash flow should a catastrophic situation require an immediate response.
Legislative history
2011-12 S.2681; 2010 S.7879
Fiscal implications
None.
Effective date
This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.