What's happening
The bill allows insurers, with state approval, to offer schedule rating plans for employers based on individual risk characteristics, with specific limits.
Why it matters
Encourages tailored insurance premiums. By allowing insurers to offer schedule rating plans based on an employer’s unique risk characteristics, the bill incentivizes businesses to adopt safer or more efficient practices, as their individual efforts can directly impact their insurance costs.
Limits insurer discretion to protect fairness. The maximum modification (increase or decrease) to premiums is capped at 25%, preventing excessive swings in pricing and ensuring employers are not subject to extreme rate changes solely based on insurer judgment.
Separates from other pricing mechanisms. These schedule rating adjustments are kept distinct from existing credits, debits, and other rating methods like experience or merit rating, preventing employers from being doubly penalized or rewarded, and ensuring transparency in what factors affect premiums.
Requires regulatory oversight. All plans must receive approval from the state insurance department, adding a layer of consumer protection and ensuring that insurers’ rating practices remain fair, consistent, and in line with public policy.
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Who cares
Headline styles
Cap Employer Insurance Discounts
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1377
2019-2020 Regular Sessions
IN SENATE
January 14, 2019
Introduced by Sen. FUNKE -- 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.
LBD07174-01-9
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 reduc- ing 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 allow- able 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.