What's happening
This bill allows the New York State Insurance Fund to pay commissions to licensed insurance brokers for services provided to clients.
Why it matters
Increases broker involvement and support. By allowing the New York State Insurance Fund (NYSIF) to pay commissions to licensed insurance brokers, the bill incentivizes brokers to actively assist businesses in obtaining workers’ compensation coverage through NYSIF. This could improve service quality and guidance for clients navigating state insurance options.
Potential for broader access and competition. Compensating brokers may encourage more insurance professionals to offer NYSIF products, potentially making state-backed coverage more accessible and competitive compared to private insurers.
Could affect pricing and administrative costs. The requirement that commissions be paid “within the existing rate structure” suggests that costs must be absorbed without raising premiums, possibly impacting NYSIF’s administrative expenses or profit margins, and raising questions about long-term financial sustainability.
Aligns NYSIF with standard industry practices. Most private insurers pay commissions to brokers, so this change modernizes NYSIF’s approach and may level the playing field, allowing clients to use their preferred broker for state fund coverage without financial disadvantage.
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Who cares
Headline styles
Pay Brokers for Insurance Services
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to labor
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.
Pay Brokers for Insurance Clients
In Assembly Committee · Labor · Sponsor Sean Ryan
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7988
IN SENATE
March 16, 2018
Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the workers' compensation law, in relation to directing the state insurance fund to compensate licensed insurance producers for the services provided to clients who obtain coverage through the fund
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 5 of section 76 of the workers' compensation law is renumbered subdivision 6 and a new subdivision 5 is added to read as follows:
5. The purposes of such state insurance fund are hereby further enlarged to permit it to compensate licensed insurance brokers for the services they provide their clients who are insured in the fund through the payment of commissions. The commissioners of the state insurance fund are hereby authorized and directed to establish, within the existing rate structure, a factor to compensate licensed insurance producers for the services provided to their clients who obtain coverage through the fund.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14891-01-8
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the workers' compensation law, in relation to directing the state insurance fund to compensate licensed insurance producers for the services provided to clients who obtain coverage through the fund
Purpose
This bill would provide commissions to licensed brokers for services provided to clients who obtain coverage through the state insurance fund.
Summary of provisions
Section one amends section 76 of the workers' compensation law to authorize state insurance fund to compensate licensed insurance brokers for the services they provide to their clients who are insured in the fund through the payment of commissions. The commissioners of state insurance fund are authorized and directed to establish, within the existing rate structure, a factor to compensate licensed insurance producers for the services provided to their clients who obtain coverage through the fund.
Section two establishes the effective date.
Existing law
Currently, the state insurance fund does not provide commissions to insurance producers who bring business to the state.
Justification
The state insurance fund (NYSIF) was created in 1914 to ensure workers' compensation insurance was available to any business entity in the state. The fund, established as self-supporting, is required under the workers' compensation law to provide the lowest premiums for workers' compensation insurance and disability benefits. NYSIF competes against private insurance carriers in the admitted market, yet it has a clear market advantage. Under current law, NYSIF is not required to provide commissions to licensed brokers, which bring in new cliental.
This bill would expand the NYSIF purpose to provide for an appropriate commission schedule to pay licensed brokers for services to their clients who obtain coverage through the fund. Most of PIANYs members who deal in workers compensation insurance place their customers with NYSIF. While their business may be a small percentage of NYSIFs policies, NYSIF policies represent a large percentage of their business. A significant number of workers compensation policies independent agents write are in the SIR If the clients go direct to NYSIF, they miss certain advantages a broker can bring them, including periodically shopping that account to get a better rate. NYSIF effectively uses the producer to capture busi- ness without compensation, whereas the voluntary market recognizes that the producers' efforts are part of the package, and therefore pays a commission. Both the New York Property Insurance Underwriting Associ- ation (NYPIUA) and the state automobile insurance fund pay commissions to producers, this bill would create parity within the NYSIF.
Legislative history
New Bill.
Fiscal implications
Minimal.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.