senate Bill S2338B

Directs the special advisory panel on homeowners' insurance/catastrophe coverage to study certain facets of insurance in coastal areas

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 16 / Jan / 2013
    • REFERRED TO INSURANCE
  • 16 / Apr / 2013
    • AMEND AND RECOMMIT TO INSURANCE
  • 16 / Apr / 2013
    • PRINT NUMBER 2338A
  • 17 / Jun / 2013
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 17 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1376
  • 17 / Jun / 2013
    • PASSED SENATE
  • 17 / Jun / 2013
    • DELIVERED TO ASSEMBLY
  • 17 / Jun / 2013
    • REFERRED TO INSURANCE
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO INSURANCE
  • 06 / Feb / 2014
    • AMEND AND RECOMMIT TO INSURANCE
  • 06 / Feb / 2014
    • PRINT NUMBER 2338B
  • 17 / Jun / 2014
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 17 / Jun / 2014
    • ORDERED TO THIRD READING CAL.1428
  • 17 / Jun / 2014
    • PASSED SENATE
  • 17 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 17 / Jun / 2014
    • REFERRED TO INSURANCE

Summary

Directs the special advisory panel on homeowners' insurance/catastrophe coverage to study certain facets of profitability of insurance in coastal areas.

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Bill Details

See Assembly Version of this Bill:
A5312B
Versions:
S2338
S2338A
S2338B
Legislative Cycle:
2013-2014
Current Committee:
Assembly Insurance
Law Section:
Insurance
Laws Affected:
Amd §12, Chap 42 of 1996; amd §23, Chap 136 of 2008
Versions Introduced in Previous Legislative Cycles:
2011-2012: S1027B, A5215B
2009-2010: S8110, A11486

Sponsor Memo

BILL NUMBER:S2338B

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 relat-
ing 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' insur-
ance 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' Insur-
ance coverage (the Panel) to devote particular attention to the market
dynamics in the coastal homeowners' insurance market and to review
federal legislation, in addition to state legislative activities regard-
ing catastrophe related insurance coverages. With the advent of Hurri-
cane 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' insur-
ance, particularly if such homeowner's policy is canceled by their
current insurance carrier.

SUMMARY OF SPECIFIC PROVISIONS: Section 1: Amends Chapter 136 of the
Laws of 2008 to expand the charge of the Panel to include: A) reviewing
federal legislative activities, in addition to state legislative activ-
ities, related to catastrophe related insurance coverages and the avail-
ability of federal stop loss funds, and federal reconstruction & infras-
tructure 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) evaluat-
ing 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, and D) looking into the estimated
cost of obtaining comparable homeowners' insurance if their previous
coverage has been cancelled.

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 home-
owners' 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 decade, some of New York's largest home-
owner 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 homeown-
ers 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 marked may very well change 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.

PRIOR LEGISLATIVE HISTORY: 2010: S.8110 - Passed Senate; A.11486
-Referred to insurance 2012: S. 1027 - Referred to Insurance Committee

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediate.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 2338--B

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 16, 2013
                               ___________

Introduced  by  Sens.  KLEIN,  BRESLIN, SAVINO -- read twice and ordered
  printed, and when printed to be committed to the Committee  on  Insur-
  ance  --  committee  discharged,  bill  amended,  ordered reprinted as
  amended and recommitted  to  said  committee  --  recommitted  to  the
  Committee  on  Insurance  in  accordance with Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN  ACT  to  amend chapter 42 of the laws of 1996 amending the insurance
  law relating to homeowners' insurance and a temporary panel  on  home-
  owners'  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 extend-
  ing the effectiveness of certain stand-by powers of the New York prop-
  erty  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 ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 1 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, is 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] 2015, and on  [an  annual]  A  BIENNIAL
basis thereafter:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06594-06-4

S. 2338--B                          2

  (a)  a  review  of  FEDERAL  LEGISLATION  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;
  (b) an evaluation of the effectiveness of any voluntary market assist-
ance  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  insur-
ance underwriting association issuing bonds or establishing other finan-
cial 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 insur-
ance 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 catas-
trophe;
  (g)  an evaluation of insurer AND GOVERNMENTAL capacity and effective-
ness in the event of a catastrophic weather occurrence, including  rein-
surance 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[.]; AND
  (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 COMPA-
RABLE 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.
  S 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'  insur-
ance  market  PARTICULARLY  WITH  RESPECT  TO THOSE COMMUNITIES THAT ARE
WITHIN ONE MILE OF A SALTWATER OCEAN, SOUND, INLET OR BAY IN  THE  COUN-
TIES  OF  THE  BRONX, KINGS, NASSAU, QUEENS, RICHMOND, SUFFOLK AND WEST-
CHESTER.  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

S. 2338--B                          3

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.
  S 3. This act shall take effect immediately.

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