What's happening
This bill expands and updates the state's review of homeowners' insurance, especially in coastal areas, and seeks to attract more insurers to those markets.
Why it matters
Expands the advisory panel’s focus to coastal homeowners’ insurance issues. , requiring detailed study of why insurers may be withdrawing, canceling, or increasing rates in coastal markets, and mandates an analysis of replacement coverage costs for affected residents—directly addressing a growing problem for those living near New York’s coasts.
Increases the scope and expertise of the insurance advisory panel. by adding three new members with state emergency management and risk management backgrounds, likely improving the panel’s ability to address complex catastrophe and insurance market dynamics.
Mandates targeted state efforts to attract insurers to high-risk coastal areas. , requiring the Department of Financial Services to actively solicit, encourage, and identify barriers for insurers to enter markets within one mile of the ocean or similar bodies in downstate counties—potentially increasing insurance options for residents who face limited or costly choices.
Updates and broadens the state’s review of disaster preparedness and mitigation. , requiring assessment of local building codes, disaster mitigation plans, and public awareness initiatives, which could lead to improved resilience and lower insurance costs for homeowners in vulnerable coastal regions.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Study Coastal Insurance Issues
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
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.
Study Coastal Insurance Problems
In Assembly Committee · Insurance · Sponsor Fred Thiele
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3971
2017-2018 Regular Sessions
IN SENATE
January 31, 2017
Introduced by Sens. KLEIN, AVELLA, SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend chapter 42 of the laws of 1996 amending the insurance law relating to homeowners' insurance and a temporary panel on homeowners' insurance coverage, in relation to the special advisory panel on homeowners' insurance/catastrophe coverage; and to amend chapter
136 of the laws of 2008 amending the insurance law relating to extending the effectiveness of certain stand-by powers of the New York property insurance underwriting association, in relation to the program designed to attract more competitors to the homeowners' insurance market
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivisions 1 and 2 of section 12 of chapter 42 of the laws of 1996 amending the insurance law relating to homeowners' insurance and a temporary panel on homeowners' insurance coverage, as amended by chapter 136 of the laws of 2008, are amended to read as follows:
(1) The superintendent of [insurance] financial services is hereby directed to convene a special advisory panel on homeowners' insurance/catastrophe coverage, to examine and assess the problems affecting the availability and affordability of homeowners' insurance in this state and the effect thereon created by any potential major weather catastrophe. The panel shall study and report on the following issues on or before November 30, [2009] 2018, and on [an annual] a biennial basis thereafter:
(a) a review of international, federal and other states' activities regarding catastrophe related coverage, including but not limited to an evaluation of the experience under the California Earthquake Authority and the Florida Commission on Hurricane Loss Projection Methodology;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09368-01-7
S. 3971 2
(b) an evaluation of the effectiveness of any voluntary market assistance program in effect in New York with particular attention devoted to market dynamics in the coastal homeowners' insurance market;
(c) an evaluation of the feasibility or experience, if any, of the New York property insurance underwriting association writing homeowners' insurance policies or reinsuring such policies when written in the voluntary market under certain market conditions;
(d) an evaluation of the feasibility of the New York property insurance underwriting association issuing bonds or establishing other financial mechanisms for catastrophe insurance coverage; and an evaluation of the feasibility of establishing a state-wide catastrophe insurance fund;
(e) an evaluation of the feasibility of the New York property insurance underwriting association acting as a servicing carrier for policies written pursuant to parts 61 and 62 of title 44 of the Code of Federal Regulations;
(f) an evaluation of existing state and local building codes and the feasibility of implementing new building practices and structural improvement retrofitting, to mitigate damage from a major weather catastrophe;
(g) an evaluation of insurer and governmental capacity and effectiveness in the event of a catastrophic weather occurrence, including reinsurance capacity and effectiveness, windstorm deductibles and multi-tier programs, and other risk sharing mechanisms;
(h) an evaluation of insurer preparedness in the recovery, rebuilding and renewal processes following weather-related losses; [and]
(i) an evaluation of public awareness of storm risks and programs to educate the public of storm risks and mitigation techniques[.];
(j) an evaluation of whether and the rate at which insurers may be withdrawing from the coastal homeowners' insurance market, cancelling such policies or substantially increasing insurance premium rates in such market, and the reasons for any such actions. Further, the panel shall study and ascertain an average estimated cost of obtaining comparable replacement homeowner's coverage for those insureds who have been cancelled in such coastal areas. For the purposes of this subdivision, the term coastal homeowners' insurance market shall mean those areas that are within one mile of a saltwater ocean, sound, inlet or bay in the counties of the Bronx, Kings, Nassau, Queens, Richmond, Suffolk and Westchester; and
(k) an evaluation of state and local municipal natural disaster mitigation plans, as provided for in article two-B of the executive law, as they relate to minimizing property damage to residential homes in coastal areas of the state and suggest ways to minimize insurable and noninsurable residential home losses due to such catastrophic natural disaster events.
(2) The panel shall consist of [twenty-three] twenty-six members. The superintendent of [insurance] financial services shall be the chair of the panel. The other [twenty-two] twenty-five members shall be the director of the state emergency management office, the state chief risk officer, the director of risk and insurance management of the office of general services, and twenty-two members appointed as follows: six members shall be appointed by the governor, of whom two shall be experts in the field of catastrophic meteorological science, two shall be building or code enforcement officials and two shall be representative of insurance consumers; six members shall be appointed by the temporary president of the senate, of whom three shall be representative of producers actively placing homeowner's insurance policies in this state,
S. 3971 3
two shall be representative of insurance companies actively writing homeowner's insurance policies in this state and one shall be representative of insurance companies providing reinsurance coverage; six members shall be appointed by the speaker of the assembly, of whom three shall be representative of producers actively placing homeowner's insurance policies in this state and three shall be representative of insurance companies actively writing homeowner's insurance policies in this state; and two members each shall be appointed by the minority leader of the senate and the minority leader of the assembly, provided of the members appointed by each minority leader one shall be representative of producers actively placing homeowner's insurance policies in this state and one shall be representative of insurance companies actively writing homeowner's insurance policies in this state. Each member of the panel shall serve at the pleasure of the official who appointed him or her.
§ 2. Subdivision (a) of section 23 of chapter 136 of the laws of 2008 amending the insurance law relating to extending the effectiveness of certain stand-by powers of the New York property insurance underwriting association, as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows:
(a) The superintendent of financial services shall implement a program designed to attract more competitors to the state's homeowners' insurance market particularly with respect to those communities that are within one mile of a saltwater ocean, sound, inlet or bay in the counties of the Bronx, Kings, Nassau, Queens, Richmond, Suffolk and Westchester. The program shall include, but shall not be limited to:
(1) identifying, contacting and soliciting feedback from national, regional and other insurance carriers not currently writing homeowners insurance in the state to determine their interest in selling homeowners insurance in the state;
(2) adopting specific measures to encourage such insurers to sell homeowners' insurance in the state; and
(3) documenting those issues or concerns such insurers may cite as barriers to selling homeowners insurance in the state.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend chapter 42 of the laws of 1996 amending the insurance law relating to homeowners' insurance and a temporary panel on homeowners' insurance coverage, in relation to the special advisory panel on homeowners' insurance/catastrophe coverage; and to amend chapter 136 of the laws of 2008 amending the insurance law relating to extending the effectiveness of certain stand-by powers of the New York property insurance underwriting association, in relation to the program designed to attract more competitors to the homeowners' insurance market
Purpose or general idea of bill
The purpose of this bill is to expand the charge of the already existing Temporary Panel on Homeowners' Insurance coverage (the Panel) to:
A)Devote particular attention to the market dynamics in the coastal homeowners' insurance market and to review international and federal legislation, in addition to state legislative activities regarding catastrophe related insurance coverages.
Read the full memo (1,078 words)
B)Evaluate State and Local Municipal Natural Disaster Mitigation Plans, as it relates to minimizing property damage to residential homes in coastal areas and suggest ways to help minimize insurable and non-insurable residential home losses due to a catastrophic natural disaster. Helping to minimize insurable losses will help to stabilize homeowners premium insurance rates before and after a catastrophic event has hit our coastal areas.
With the advent of Hurricane Irene and Superstorm Sandy, the Financial Services Department should expand upon the number of tasks taken on by the Temporary Panel on Homeowner's Insurance to ensure that the homeowners market remains competitive and that consumers have more than one or two alternatives (if they have any alternatives at all) for obtaining homeowners' insurance, particularly if such homeowner's policy is canceled by their current insurance carrier.
Summary of specific provisions
Section 1: Amends Chapter 42 of the Laws of 1996 to expand the charge of the Panel to include: A) reviewing international and federal legislative activities, in addition to state legislative activities, related to catastrophe related insurance coverages and the availability of federal stop loss funds, and federal reconstruction & infrastructure financial aid packages, B) evaluating the effectiveness of the voluntary market assistance program with particular attention devoted to market dynamics in the coastal homeowners insurance market, C) evaluating the governmental capacity, such as state & local governments and special districts, to anticipate and plan for a catastrophic weather event and to increase the effectiveness of their efforts to respond to a catastrophic weather event and to mitigate potential infrastructure and Property/Casualty damages and loss, D) looking into the estimated cost of obtaining comparable homeowners' insurance if their previous coverage has been cancelled, and E) evaluating state and local municipal natural disaster mitigation plans with an eye to minimizing property damage to residential homes to help stabilize the cost of homeowners' insurance.
In addition, the Task Force membership would be expanded to include the Director of the State Emergency Management Office (SEMO), the State Chief Risk Officer, and the Director of the Risk and Insurance Management, within the Office of General Services.
Section 2: Amends section 23 of Chapter 136 of the Laws of 2008 to encourage the Superintendent of Insurance Financial Services to seek to new ways to identify new insurance carriers that may want to write homeowners' insurance in the State's coastal areas to help replace those carriers that are slowing withdrawing from this market. Encouraging more private carriers to write coastal homeowners' insurance should help to increase the availability of coastal homeowners' insurance and give consumers more choice in this tightening market.
Justification
For more than a 15 years, some of New York's largest homeowner insurance carriers have been either gradually withdrawing or curtailing the issuance of new policies in the coastal homeowner's insurance market. While, due to national trends related to excess liability exposure in coastal areas, it is prudent for some of these larger carriers to reduce their liability exposure in coastal areas, it is important that New York homeowners are able to access a variety of insurance products at affordable prices to cover their diverse homeowners insurance and protection needs. This goal of expanding consumer choice and securing the ability to obtain affordable homeowners coverage from more than just a few insurance carriers (or no carrier at all) or obtaining homeowners insurance from the New York Property Insurance Association (NYPIA) has been heightened in light of the occurrence of Hurricane Irene and Super-storm Sandy.
This bill expands the scope of the Panel to ensure that the Financial Services Department has sufficient information so that the Department can help to encourage other insurers to expand writings in this area or to enter the coastal homeowners insurance market to replace, in an orderly manner, those who are withdrawing from the market. Under current law, insurers are required by law to notify the State Financial Services Department of their plans to withdraw from the market and to file a withdrawal plan. Further, insurers are encouraged to take steps to ensure that their departure from this segment of the market is conducted in an orderly manner to minimize the disruption that i.e. sure to be caused by so many homeowners scrambling to secure replacement coverage.
This bill expands the scope of the Panel so that the insurance industry (including insurance agents, brokers and carriers in both the admitted and non-admitted market, and reinsurers), in cooperation with the Department, and state & local governments can create an environment that encourages more writings of homeowners insurance in the State's coastal areas.
This bill is particularly important today, as the market dynamics of the homeowners insurance market has changed due to the catastrophic losses sustained by coastal residents by Superstorm Sandy. This bill memo was revised in 2013 to heighten the need to enact this bill into law in light of the events of Superstorm Sandy. It was further amended in 2014 to revise the dates to be used in preparing reports pursuant to this bill so that they , would be done at a later date. The bill was revised again in 2017 to add new members to the Task Force who are familiar with and review State and local municipal natural disaster mitigation plans as provided for under Executive Law Article 2-B. These plans are utilized to minimize property damage losses due to a catastrophic weather event.
Prior legislative history
2010:S.8110-Passed Senate; A.11486-Referred to insurance 2012:S.1027-Referred to Insurance Committee 2014:S.2338-Passed Senate. 2016:S.856-Remained in Senate Insurance Committee FISCAL IMPLICATIONS :
None.
Effective date
Immediate.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.