Relates to the joint underwriting association

BILL NUMBER:S5236

Title of bill

An act to amend the insurance law, in relation to the joint underwriting association

Purpose or general idea of bill

The purpose of this bill is to amend the insurance law to reduce the administrative burden of having NYPIUA report to the Department of Financial Services (DFS) on an annual basis regarding the number of broad form policies written by the association as well as reduce the burden of the DFS to report annually to the Gover- nor and Legislature.

Summary of specific provisions

This bill would amend section 5402 of the insurance law to require NYPIUA to report to the Department of Financial Services regarding the number of broad form policies written at the end of NYPIUA's ten year authority to write such policies rather than on an annual basis. The bill would also require DFS to report to the Governor and the Legislature no later than January 1st, 2018, regarding the number of policies issued, including any recommendations as to the continuation of such offerings.

Justification

In 2008, NYPIUA was given the authority to offer broad form coverage (DP-2) on personal dwelling and tangible personal property for a period of five years in addition to basic form (DP-1) that covers property damage from fire and other basic perils. The broad form policy covers damage from falling objects; weight of ice, snow or sleet; acci- dental discharge of water or steam; freezing; damage from artificially generated electrical current; volcanic eruption; and burglary, in addi- tion to the basic coverage of a DP-1 policy.

In December, 2012, the DFS reported to the Governor and Legislature that NYPIUA had issued more than 30,000 broad form policies and that such a policy "provides enhanced coverage options to policyholders compared to the basic form policy and represents a meaningful improvement for home- owners who cannot obtain a homeowners policy in the voluntary market." The report also states: "Continuation of the broad form policy is an essential means by which NYPIUA can fulfill its mission."

NYPIUA has reported to the DFS on an annual basis since enactment of the 2008 amendments authorizing broad form coverage. As the DFS report points out, offering expanded broad form coverage has been beneficial to New York homeowners.

Requiring NYPIUA to continue to provide annual reports is unnecessarily time consuming and takes valuable personnel away from their day to day duties of working with homeowners trying to obtain property insurance. Requiring NYPIUA to provide a report on broad form coverage at the end of their ten years of authority is sufficient to assess the program.

Prior legislative history

This is new legislation.

Fiscal implications for state and local governments

None.

Effective date

This bill will take effect immediately.