What's happening
This bill allows insurers to offer schedule rating plans for employers, with a maximum modification of plus or minus 25 percent.
Why it matters
Allows insurers to customize pricing based on employers' specific risk characteristics. This means companies with strong safety practices or other favorable factors could see lower premiums, while riskier employers could pay more, incentivizing workplace safety and risk management.
Caps the impact of schedule rating at 25% up or down, separate from other discounts or surcharges. This ensures predictability for employers, as the adjustment from this plan can’t exceed this range and is not compounded with other rating mechanisms like experience or merit rating.
Requires Department of Insurance approval for these plans, adding regulatory oversight. This aims to prevent discriminatory or unfair pricing practices, protecting employers from arbitrary or excessive premium changes.
Excludes schedule rating from general rate changes and other pricing tools. This ensures that the schedule rating plan operates independently, providing transparency and preventing double-counting of risk adjustments.
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Who cares
Insurers
The bill would let insurers offer department-approved schedule rating plans based on an employer’s individual risk characteristics, with adjustments capped at plus or minus 25 percent.
Employers buying insurance
Their individual risk characteristics could lead to higher or lower rates under these plans, separate from experience and merit rating and workers’ compensation law credits or debits.
State insurance regulators
The department would approve these plans, which would be excluded from general rate changes under subsection (a) of section 2347.
Headline styles
Adjust Employer Insurance Rates
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 55
1 Co-sponsor
History
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5338
2017-2018 Regular Sessions
IN SENATE
March 22, 2017
Introduced by Sens. FUNKE, MURPHY -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to schedule rating plans reflecting individual risk characteristics of an employer
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 2347 of the insurance law is amended by adding a new subsection (f) to read as follows:
(f) Subject to approval by the department, an insurer may make available a schedule rating plan reflecting individual risk characteristics of an employer. The maximum rating modification pursuant to such plan offered in accordance with this subdivision shall be limited to plus or minus twenty-five percent. Any such rating modification is exclusive of credits or debits authorized under section one hundred thirty-four of the workers' compensation law. The rating modification is further exclusive of all pricing mechanisms, including experience and merit rating. A schedule rating plan made available pursuant to this subsection shall not be included in any general rate change made pursuant to subsection (a) of this section.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10751-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to schedule rating plans reflecting individual risk characteristics of an employer
Purpose
To allow greater latitude in providing employer premium discounts for worker's compensation valued at up to 25% of the premium cost
Summary of provisions
Section 1 Allows an insurer to make available a schedule rating plan reflecting individual risk characteristics of an employer with a maximum modification level of plus or minus 25%.
Section 2 is the effective date.
Justification
When building rates for insurance premiums, it is necessary to take into account the individual risk factors of a person or a business. In the case of a business, the safety record of the employer, the level of safety training provided to employees must be a primary factor in reducing cost. In essence it is vitally important that premiums be adjusted to reward those that are going the extra mile to make employee safety a priority. This bill allows for a schedule that can reduce an employer's cost by up to 25% if that employer can demonstrate a clear record of safety and a commiserate training regimen. Currently, the maximum allowable deviation under such programs is 5%.
Legislative history
New bill.
Fiscal implications
None.
Effective date
This act will take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.