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

                                   648

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced by M. of A. KAVANAGH -- read once and referred to the Commit-
  tee on Health

AN ACT to amend the public health law and the insurance law, in relation
  to  enacting the New York toxic mold safety and protection act of 2009
  and making an appropriation therefor

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Short  title. This act shall be known and may be cited as
"the New York toxic mold safety and protection act of 2009".
  S 2. The public health law is amended by adding a new article 48-A  to
read as follows:
                              ARTICLE 48-A
                               TOXIC MOLD
         TITLE I. RESEARCH AND PUBLIC EDUCATION (SS 4850-4853).
              II. HOUSING PROVISIONS FOR INDOOR
                  MOLD HAZARD PREVENTION AND DETECTION
                             (SS 4855-4860).
                                  TITLE I
                      RESEARCH AND PUBLIC EDUCATION
SECTION 4850. DEFINITIONS.
        4851. RESEARCH AND REPORTING.
        4852. STANDARDS   FOR  PREVENTING,  DETECTING,  AND  REMEDIATING
                INDOOR MOLD GROWTH.
        4853. PUBLIC EDUCATION.
  S 4850. DEFINITIONS. WHEN USED IN THIS ARTICLE:
  1. "MOLD" MEANS ANY FURRY GROWTH OF MINUTE FUNGI  OCCURRING  IN  MOIST
CONDITIONS.
  2.  "TOXIC  MOLD"  MEANS  ANY  INDOOR  MOLD GROWTH CAPABLE OF CREATING
TOXINS THAT CAN CAUSE  PULMONARY,  RESPIRATORY,  NEUROLOGICAL  OR  OTHER
MAJOR  ILLNESSES  AFTER MINIMAL EXPOSURE, AS SUCH EXPOSURE IS DEFINED BY

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

                                                           LBD01200-01-9

A. 648                              2

THE  ENVIRONMENTAL  PROTECTION  AGENCY,  CENTER  FOR  DISEASE   CONTROL,
NATIONAL  INSTITUTE  OF  HEALTH  OR OTHER FEDERAL, STATE OR LOCAL AGENCY
ORGANIZED IN PART TO STUDY AND/OR PROTECT HUMAN HEALTH.
  3. "TOXIC MOLD RISK ASSESSOR" MEANS A PERSON WHO ESTABLISHES THE LEVEL
OF RISK TO PUBLIC HEALTH ASSOCIATED WITH TOXIC MOLD.
  4.  "MOLD  INSPECTION"  MEANS  AN  INSPECTION OF REAL PROPERTY THAT IS
DESIGNED TO DISCOVER INDOOR MOLD GROWTH, TOXIC MOLD  GROWTH,  CONDITIONS
THAT FACILITATE INDOOR MOLD GROWTH AND/OR INDICIA OF CONDITIONS THAT ARE
LIKELY TO FACILITATE INDOOR MOLD GROWTH.
  S  4851.  RESEARCH  AND  REPORTING. 1. THE DEPARTMENT OF ENVIRONMENTAL
CONSERVATION AND THE DEPARTMENT SHALL JOINTLY UNDERTAKE A  COMPREHENSIVE
STUDY  OF  THE  HEALTH EFFECTS OF INDOOR MOLD GROWTH AND TOXIC MOLD. THE
RESULTS OF THE AFOREMENTIONED STUDY SHALL BE SUBMITTED TO THE  GOVERNOR,
THE  TEMPORARY  PRESIDENT  OF  THE  SENATE,  THE  MINORITY LEADER OF THE
SENATE, THE SPEAKER OF THE ASSEMBLY, THE MINORITY LEADER OF THE ASSEMBLY
AND THE GENERAL PUBLIC. THE STUDY SHOULD ASCERTAIN AMONG  OTHER  THINGS:
DETAILED INFORMATION ABOUT HARMFUL AND/OR TOXIC STRAINS OF MOLD; METHODS
OF  DETECTING  HARMFUL AND/OR TOXIC MOLD; POTENTIAL DANGERS OF PROLONGED
EXPOSURE TO INDOOR MOLD GROWTH; MINIMUM  LEVELS  OF  EXPOSURE  AT  WHICH
INDOOR  MOLD GROWTH IS HARMFUL TO HUMAN HEALTH; AND THE HAZARDS INVOLVED
IN MOLD REMEDIATION.
  2. THE DIVISION OF HOUSING  AND  COMMUNITY  RENEWAL  SHALL  STUDY  AND
REPORT THE IMPACT OF CONSTRUCTION STANDARDS ON INDOOR MOLD GROWTH.  SUCH
STUDY SHALL BE SUBMITTED TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE
SENATE,  THE  MINORITY LEADER OF THE SENATE, THE SPEAKER OF THE ASSEMBLY
AND THE MINORITY LEADER OF THE ASSEMBLY.
  3. ALL RESEARCH AND STUDY CONDUCTED PURSUANT TO THIS ARTICLE SHALL  BE
ONGOING  WITH  UPDATED  REPORTS PUBLISHED AS NEEDED TO ADEQUATELY INFORM
THE PUBLIC AND PROTECT HUMAN HEALTH.
  S 4852. STANDARDS FOR PREVENTING, DETECTING,  AND  REMEDIATING  INDOOR
MOLD  GROWTH.    1.  AFTER APPROPRIATE RESEARCH AND STUDY AS REQUIRED BY
THIS ARTICLE, BUT NOT LATER THAN ONE YEAR AFTER THE  EFFECTIVE  DATE  OF
THIS  ARTICLE, THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, IN CONJUNC-
TION WITH APPROPRIATE AGENCIES, SHALL PROMULGATE RULES  AND  REGULATIONS
THAT  INCLUDE  AMONG  OTHER  THINGS: STANDARDS FOR MOLD INSPECTION, MOLD
REMEDIATION, TESTING THE TOXICITY OF MOLD, AND THE PROBLEM OF MOLD REME-
DIATION; STANDARDS FOR CERTIFICATION OF MOLD INSPECTORS,  MOLD  REMEDIA-
TORS,  MOLD  TESTING LABS, MOLD RISK ASSESSORS AND INDUSTRIAL HYGIENISTS
INVOLVED WITH MOLD REMEDIATION PLANNING; AND STANDARDS FOR  THE  DESIGN,
INSTALLATION, AND MAINTENANCE OF AIR VENTILATION AND/OR AIR-CONDITIONING
SYSTEMS  TO  PREVENT  MOLD  GROWTH OR CREATION OF CONDITIONS THAT FOSTER
MOLD GROWTH.
  2. AFTER APPROPRIATE RESEARCH AND STUDY AS REQUIRED BY  THIS  ARTICLE,
BUT  NOT  LATER  THAN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS ARTICLE,
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL  SHALL  PROMULGATE  GUIDE-
LINES  IDENTIFYING  CONDITIONS  CREATED PRIOR TO AND DURING CONSTRUCTION
THAT FACILITATE THE GROWTH OF INDOOR MOLD AND  RECOMMENDING  APPROPRIATE
MEANS OF ELIMINATING THOSE CONDITIONS.
  3.  TO  THE  MAXIMUM  EXTENT  POSSIBLE,  THE STANDARDS, GUIDELINES AND
RECOMMENDATIONS ESTABLISHED UNDER THIS SECTION SHALL BE  DEVELOPED  WITH
THE ASSISTANCE OF ORGANIZATIONS INVOLVED IN ESTABLISHING NATIONAL BUILD-
ING CONSTRUCTION STANDARDS AND REPRESENTATIVES OF STATE OR LOCAL AUTHOR-
ITIES  RESPONSIBLE FOR BUILDING INSPECTIONS AND ISSUANCE OF CERTIFICATES
OF OCCUPANCY.
  4. THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION AND  THE  DIVISION  OF
HOUSING  AND  COMMUNITY  RENEWAL  SHALL  MAKE DRAFTS OF THEIR RESPECTIVE

A. 648                              3

DOCUMENTS AVAILABLE FOR PUBLIC REVIEW AND COMMENT THIRTY DAYS  PRIOR  TO
PUBLICATION.  THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION AND THE DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL SHALL MAKE FINAL  MODEL  STANDARDS
AND  TECHNIQUES AVAILABLE TO THE PUBLIC NO LATER THAN ONE YEAR AFTER THE
EFFECTIVE DATE OF THIS ARTICLE.
  5. THE  DEPARTMENT  OF  ENVIRONMENTAL  CONSERVATION  SHALL  TAKE  SUCH
ACTIONS AS MAY BE NECESSARY TO INFORM APPROPRIATE LOCAL GOVERNMENT AGEN-
CIES AND AUTHORITIES OF THE MODEL STANDARDS AND TECHNIQUES WITH THE GOAL
OF  ENSURING THAT SUCH AGENCIES AND AUTHORITIES ADOPT SUCH STANDARDS AND
TECHNIQUES BY JUNE FIRST, TWO THOUSAND TEN.
  6. ALL STANDARDS AND GUIDELINES PROMULGATED PURSUANT TO  THIS  ARTICLE
SHALL BE UPDATED AND PUBLISHED AS NEEDED TO ADEQUATELY INFORM THE PUBLIC
AND PROTECT HUMAN HEALTH.
  S  4853. PUBLIC EDUCATION.  1. THE DEPARTMENT OF ENVIRONMENTAL CONSER-
VATION, THE DEPARTMENT AND THE DIVISION OF HOUSING AND COMMUNITY RENEWAL
AND OTHER RELEVANT AGENCIES SHALL SPONSOR PUBLIC EDUCATION  PROGRAMS  TO
PROMOTE  AND  INCREASE  PUBLIC  AWARENESS  OF THE DANGERS OF INDOOR MOLD
GROWTH OR TOXIC MOLD.
  2. THE PUBLIC EDUCATION PROGRAMS SHOULD INCLUDE, AMONG  OTHER  THINGS,
INFORMATION REGARDING THE CONDITIONS THAT FACILITATE INDOOR MOLD GROWTH;
GUIDELINES  FOR  REMEDIATING  INDOOR MOLD GROWTH; DANGERS OF EXPOSURE TO
INDOOR MOLD GROWTH IN PUBLIC BUILDINGS; RISK ASSESSMENT  AND  INSPECTION
METHODS FOR TOXIC MOLD; AND OTHER NECESSARY INFORMATION.
  A.  THE PUBLIC EDUCATION PROGRAMS SHALL PROVIDE EDUCATION AND INFORMA-
TION THROUGH MODES OF COMMUNICATION THAT ARE COMMONLY UTILIZED AND  ABLE
TO BE EASILY CONSUMED BY RELEVANT INDIVIDUALS OR ORGANIZATIONS;
  B.  PUBLIC  EDUCATION  PROGRAMS  SHOULD  BE  DESIGNED  TO REACH HEALTH
PROFESSIONALS; THE GENERAL PUBLIC; HOMEOWNERS,  PROSPECTIVE  HOMEOWNERS,
LANDLORDS, AND TENANTS; CONSUMERS OF HOME IMPROVEMENT PRODUCTS; THE REAL
ESTATE  INDUSTRY; THE HOME CONSTRUCTION AND RENOVATION INDUSTRY, INCLUD-
ING THE HEATING AND AIR CONDITIONING INDUSTRY; AND OTHER INDIVIDUALS AND
ORGANIZATIONS WITH AN INTEREST IN THE USE AND/OR OCCUPANCY OF REAL PROP-
ERTY.
  3. NOTWITHSTANDING THE  FOREGOING,  THE  DEPARTMENT  OF  ENVIRONMENTAL
CONSERVATION,  IN CONSULTATION WITH APPROPRIATE AGENCIES, SHALL PUBLISH,
AND PERIODICALLY REVISE, A PAMPHLET REGARDING INDOOR MOLD HAZARDS. AMONG
OTHER THINGS THIS PAMPHLET SHOULD:  CONTAIN  INFORMATION  REGARDING  THE
HEALTH  RISKS  ASSOCIATED  WITH  EXPOSURE TO INDOOR MOLD GROWTH; PROVIDE
INFORMATION ON THE HAZARDS OF INDOOR  MOLD  GROWTH  IN  PUBLIC  HOUSING;
DESCRIBE  THE  RISKS OF MOLD EXPOSURE FOR PERSONS RESIDING IN A DWELLING
WITH TOXIC MOLD; PROVIDE INFORMATION ON APPROVED METHODS FOR  EVALUATING
AND  REDUCING MOLD GROWTH AND THEIR EFFECTIVENESS IN IDENTIFYING, REDUC-
ING, ELIMINATING, OR PREVENTING  MOLD  GROWTH;  ADVISE  PERSONS  HOW  TO
OBTAIN  A  LIST OF PERSONS CERTIFIED TO INSPECT OR REMEDIATE MOLD GROWTH
IN THE AREA IN WHICH THE PAMPHLET IS TO  BE  USED;  STATE  THAT  A  RISK
ASSESSMENT  OR  INSPECTION  FOR  MOLD GROWTH IS RECOMMENDED PRIOR TO THE
PURCHASE, LEASE, OR RENOVATION OF TARGET  HOUSING;  STATE  THAT  CERTAIN
STATE  AND  LOCAL  LAWS  IMPOSE  ADDITIONAL REQUIREMENTS RELATED TO MOLD
GROWTH IN HOUSING AND PROVIDE A LISTING OF  FEDERAL,  STATE,  AND  LOCAL
AGENCIES,  INCLUDING  ADDRESS  AND  TELEPHONE  NUMBER,  THAT CAN PROVIDE
INFORMATION ABOUT APPLICABLE LAWS AND AVAILABLE GOVERNMENTAL AND PRIVATE
ASSISTANCE AND FINANCING; AND  PROVIDE  INFORMATION  DEEMED  APPROPRIATE
AND/OR  NECESSARY  TO  PROMOTE  AWARENESS OF THE HAZARDS POSED BY INDOOR
MOLD.

A. 648                              4

                                TITLE II
          HOUSING PROVISIONS FOR INDOOR MOLD HAZARD PREVENTION
                              AND DETECTION
SECTION 4855. INSPECTIONS OF RESIDENTIAL PROPERTY.
        4856. SALE OR LEASE OF RESIDENTIAL PROPERTY.
        4857. INSPECTION REQUIREMENTS FOR EXISTING PUBLIC HOUSING.
        4858. CONSTRUCTION REQUIREMENTS FOR NEW PUBLIC HOUSING.
        4859. BUILDING CODES.
        4860.  INSPECTION  REQUIREMENT  IN CONNECTION WITH STATE MADE OR
                INSURED MORTGAGES.
  S 4855. INSPECTIONS  OF  RESIDENTIAL  PROPERTY.    COMMENCING  JANUARY
FIRST,  TWO  THOUSAND ELEVEN, THE LESSOR OF EACH UNIT OF RENTAL PROPERTY
SHALL CONDUCT AN ANNUAL INSPECTION OF SUCH PROPERTY IN  ACCORDANCE  WITH
THE  MODEL  STANDARDS  AND  TECHNIQUES  SET FORTH IN SECTION FORTY-EIGHT
HUNDRED FIFTY-TWO OF THIS ARTICLE AND SHALL PROMPTLY  NOTIFY  THE  OCCU-
PANTS OF SUCH PROPERTY OF THE RESULTS OF SUCH INSPECTION.
  S 4856. SALE OR LEASE OF RESIDENTIAL PROPERTY. 1. NOT LATER THAN JANU-
ARY FIRST, TWO THOUSAND TWELVE, THE COMMISSIONER OF HOUSING AND COMMUNI-
TY  RENEWAL  AND  THE  COMMISSIONER  OF ENVIRONMENTAL CONSERVATION SHALL
PROMULGATE RULES AND REGULATIONS UNDER THIS SECTION FOR  THE  DISCLOSURE
OF MOLD HAZARDS IN HOUSING WHICH IS OFFERED FOR SALE OR LEASE.
  2.  THE  RULES  AND REGULATIONS SHALL REQUIRE THAT, BEFORE THE SALE OR
LEASE OF REAL PROPERTY A MOLD INSPECTION BE CONDUCTED BY A  STATE-CERTI-
FIED MOLD INSPECTOR AND, WITHIN A REASONABLE TIME PRIOR TO THE EFFECTIVE
DATE  OF  THE  PURCHASE OR LEASE, THE SELLER OR LESSOR SHALL CLEARLY AND
ACCURATELY DISCLOSE TO THE  PURCHASER  OR  LESSEE  THE  RESULTS  OF  THE
INSPECTION REQUIRED UNDER THIS SECTION.
  3.  RULES AND REGULATIONS PROMULGATED UNDER THIS SECTION SHALL PROVIDE
THAT EVERY CONTRACT FOR THE SALE OR LEASE OF  ANY  INTEREST  IN  HOUSING
SHALL CONTAIN A STATEMENT SIGNED BY BOTH THE SELLER OR LESSOR AND BY THE
PURCHASER  OR LESSEE THAT ACKNOWLEDGES THE RESULT OF THE MOLD INSPECTION
REQUIRED BY SUBDIVISION TWO OF THIS SECTION.
  4. ANY PERSON WHO  KNOWINGLY  MISREPRESENTS  THE  RESULTS  OF  A  MOLD
INSPECTION  OR  CAUSES THE RESULTS OF A MOLD INSPECTION TO BE INACCURATE
SHALL BE SUBJECT TO A CIVIL MONEY PENALTY OF ONE THOUSAND DOLLARS.
  5. ANY PERSON WHO KNOWINGLY VIOLATES THE PROVISIONS  OF  THIS  SECTION
SHALL  BE  JOINTLY AND SEVERALLY LIABLE TO THE PURCHASER OR LESSEE IN AN
AMOUNT EQUAL TO THREE TIMES THE AMOUNT OF DAMAGES INCURRED BY SUCH INDI-
VIDUAL.
  6. IN ANY CIVIL ACTION BROUGHT FOR DAMAGES, THE APPROPRIATE COURT  MAY
AWARD  COURT  COSTS  TO  THE PARTY COMMENCING SUCH ACTION, TOGETHER WITH
REASONABLE ATTORNEY FEES AND ANY EXPERT  WITNESS  FEES,  IF  THAT  PARTY
PREVAILS.
  S  4857.  INSPECTION  REQUIREMENTS FOR EXISTING PUBLIC HOUSING. 1. THE
COMMISSIONER OF HOUSING AND COMMUNITY RENEWAL SHALL ESTABLISH PROCEDURES
TO ELIMINATE, AS FAR AS PRACTICABLE, THE HAZARDS  OF  INDOOR  MOLD  WITH
RESPECT  TO  ANY EXISTING PUBLIC HOUSING WHICH MAY PRESENT SUCH HAZARDS,
IN ACCORDANCE WITH THIS  SECTION.  SUCH  PROCEDURES  SHALL  PROVIDE  FOR
APPROPRIATE  MEASURES  TO CONDUCT RISK ASSESSMENTS, INSPECTIONS, INTERIM
CONTROLS, AND ABATEMENT OF INDOOR MOLD HAZARDS.
  2. AT A MINIMUM, SUCH  PROCEDURES  SHALL  REQUIRE:  THE  PROVISION  OF
INDOOR  MOLD  HAZARD  INFORMATION  PAMPHLETS  TO  TENANTS; PERIODIC RISK
ASSESSMENTS AND INTERIM CONTROLS IN ACCORDANCE WITH  A  SCHEDULE  DETER-
MINED  BY  THE  COMMISSIONER  OF  HOUSING  AND  COMMUNITY  RENEWAL; MOLD
INSPECTIONS; ABATEMENT OF INDOOR MOLD  HAZARDS  IDENTIFIED;  WHERE  RISK
ASSESSMENT,  INSPECTION,  OR  REDUCTION ACTIVITIES HAVE BEEN UNDERTAKEN,

A. 648                              5

THE PROVISION OF NOTICE TO OCCUPANTS DESCRIBING THE NATURE AND SCOPE  OF
SUCH  ACTIVITIES  AND  THE ACTUAL RISK ASSESSMENT OR INSPECTION REPORTS;
AND SUCH OTHER MEASURES AS THE COMMISSIONER  OF  HOUSING  AND  COMMUNITY
RENEWAL DEEMS APPROPRIATE.
  S 4858. CONSTRUCTION REQUIREMENTS FOR NEW PUBLIC HOUSING.  THE COMMIS-
SIONER  OF  HOUSING  AND  COMMUNITY  RENEWAL SHALL TAKE SUCH ACTIONS AND
IMPOSE SUCH STANDARDS AND CONDITIONS AS MAY BE NECESSARY OR  APPROPRIATE
TO ENSURE THAT PUBLIC HOUSING CONSTRUCTED AFTER THE DATE OF THE ISSUANCE
OF  THE  MODEL  CONSTRUCTION  STANDARDS AND TECHNIQUES ESTABLISHED UNDER
SECTION FORTY-EIGHT HUNDRED FIFTY-TWO OF THIS ARTICLE, IS CONSTRUCTED IN
ACCORDANCE WITH SUCH MODEL STANDARDS AND TECHNIQUES.
  S 4859. BUILDING CODES. 1. THE COMMISSIONER OF HOUSING  AND  COMMUNITY
RENEWAL  SHALL  DEVELOP  MODEL CONSTRUCTION STANDARDS AND TECHNIQUES FOR
PREVENTING AND CONTROLLING MOLD WITHIN NEW BUILDINGS.
  2. THE MODEL STANDARDS AND TECHNIQUES  SHALL  PROVIDE  FOR  GEOGRAPHIC
DIFFERENCES  IN  CONSTRUCTION TYPES AND MATERIALS, GEOLOGY, WEATHER, AND
OTHER VARIABLES THAT MAY AFFECT MOLD LEVELS IN NEW BUILDINGS.
  3. TO THE MAXIMUM EXTENT  POSSIBLE,  THESE  STANDARDS  AND  TECHNIQUES
SHOULD  BE  DEVELOPED  WITH  THE ASSISTANCE OF ORGANIZATIONS INVOLVED IN
ESTABLISHING NATIONAL BUILDING CONSTRUCTION  STANDARDS  AND  TECHNIQUES.
THE  COMMISSIONER OF HOUSING AND COMMUNITY RENEWAL SHALL MAKE A DRAFT OF
THE DOCUMENT CONTAINING THE MODEL STANDARDS AND TECHNIQUES AVAILABLE FOR
PUBLIC REVIEW AND COMMENT. THE COMMISSIONER  OF  HOUSING  AND  COMMUNITY
RENEWAL SHALL MAKE FINAL MODEL STANDARDS AND TECHNIQUES AVAILABLE TO THE
PUBLIC NO LATER THAN JANUARY FIRST, TWO THOUSAND TEN.
  S  4860.  INSPECTION  REQUIREMENT  IN  CONNECTION  WITH  STATE MADE OR
INSURED MORTGAGES. 1. AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND TEN,  NO
STATE  AGENCY  MAY  MAKE,  INSURE,  OR  GUARANTEE A MORTGAGE OR LOAN FOR
PURCHASE OR LEASE OF RESIDENTIAL REAL PROPERTY UNLESS: THERE HAS BEEN AN
INSPECTION OF THE PROPERTY FOR THE PRESENCE OF INDOOR MOLD GROWTH, TOXIC
MOLD AND/OR THE CONDITIONS THAT FACILITATE INDOOR MOLD GROWTH HAZARDS BY
A MOLD INSPECTOR CERTIFIED  IN  ACCORDANCE  WITH  STANDARDS  PROMULGATED
PURSUANT  TO  THIS ARTICLE WITHIN A REASONABLE TIME PRIOR TO THE MAKING,
INSURING, OR GUARANTEEING OF THE MORTGAGE OR LOAN AND THE RESULTS OF THE
INSPECTION ARE CLEARLY AND ACCURATELY DISCLOSED TO THE PURCHASER, SELLER
AND MORTGAGOR; AND THE CONTRACT FOR PURCHASE AND SALE OF AN INTEREST  IN
RESIDENTIAL  REAL  PROPERTY  FOR  WHICH  SUCH  MORTGAGE OR LOAN WAS MADE
CONTAINS A STATEMENT SIGNED BY THE SELLER OR LESSOR AND BY THE PURCHASER
OR LESSEE THAT THESE CONDITIONS HAVE BEEN COMPLIED WITH.
  2. THE HEADS OF EACH OF THE AGENCIES OR AUTHORITIES THAT MAKE, INSURE,
OR GUARANTEE MORTGAGES OR LOANS FOR PURCHASE  OR  LEASE  OF  RESIDENTIAL
REAL  PROPERTY  SHALL,  NOT LATER THAN SEPTEMBER THIRTIETH, TWO THOUSAND
NINE, ISSUE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO CARRY  OUT
THIS SECTION.
  S  3.  The insurance law is amended by adding a new article 57 to read
as follows:
                                ARTICLE 57
                   TOXIC MOLD HAZARD INSURANCE PROGRAM
SECTION 5700. PROGRAM AUTHORITY.
        5701. SCOPE OF PROGRAM AND PRIORITIES.
        5702. NATURE AND LIMITATION OF INSURANCE COVERAGE.
        5703. ESTIMATES OF PREMIUM RATES.
        5704. ESTABLISHMENT OF CHARGEABLE PREMIUM RATES.
        5705. TOXIC MOLD HAZARD INSURANCE FUND.
        5706. OPERATING COSTS AND ALLOWANCES.
        5707. PAYMENT OF CLAIMS.

A. 648                              6

        5708. DISSEMINATION OF INSURANCE INFORMATION.
        5709. COORDINATION WITH OTHER PROGRAMS.
        5710. REPORTS.
        5711. IMPLEMENTATION.
        5712. INDUSTRY INSURANCE POOL.
        5713. AGREEMENTS WITH INSURANCE POOL.
        5714. ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW.
        5715. PREMIUM EQUALIZATION PAYMENTS.
        5716. EMERGENCY IMPLEMENTATION OF PROGRAM.
        5717. ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW.
        5718. SERVICES BY THE INSURANCE INDUSTRY.
        5719. USE  OF  INSURANCE POOL, COMPANIES OR OTHER PRIVATE ORGAN-
                IZATIONS FOR CERTAIN PAYMENTS.
        5720. SETTLEMENT AND ARBITRATION.
        5721. RECORDS AND AUDITS.
        5722. PAYMENTS.
  S 5700. PROGRAM AUTHORITY.  (A) THE SUPERINTENDENT SHALL ESTABLISH AND
CARRY OUT A STATE TOXIC MOLD  INSURANCE  PROGRAM  TO  ENABLE  INTERESTED
PERSONS TO PURCHASE INSURANCE AGAINST LOSSES RESULTING FROM MOLD HAZARDS
IN REAL PROPERTIES LOCATED IN THE STATE.
  (B) IN CARRYING OUT THE TOXIC MOLD HAZARD INSURANCE PROGRAM UNDER THIS
ARTICLE,  THE  SUPERINTENDENT  SHALL, TO THE MAXIMUM EXTENT PRACTICABLE,
ENCOURAGE AND ARRANGE FOR APPROPRIATE FINANCIAL PARTICIPATION  AND  RISK
SHARING  IN  THE  PROGRAM BY INSURANCE COMPANIES AND OTHER INSURERS; AND
OTHER APPROPRIATE PARTICIPATION ON OTHER THAN A RISK-SHARING  BASIS,  BY
INSURANCE  COMPANIES  AND  OTHER INSURERS, INSURANCE AGENTS AND BROKERS,
AND INSURANCE ADJUSTMENT ORGANIZATIONS.
  S 5701. SCOPE OF PROGRAM AND PRIORITIES.   (A)  IN  CARRYING  OUT  THE
TOXIC  MOLD  HAZARD INSURANCE PROGRAM, THE SUPERINTENDENT SHALL AFFORD A
PRIORITY TO MAKING TOXIC MOLD HAZARD INSURANCE AVAILABLE TO COVER  RESI-
DENTIAL  PROPERTIES  WHICH ARE DESIGNED FOR THE OCCUPANCY OF FROM ONE TO
FOUR FAMILIES.
  (B) IF, PURSUANT TO STUDIES AND  INVESTIGATIONS  PURSUANT  TO  SECTION
FIVE THOUSAND SEVEN HUNDRED THREE OF THIS ARTICLE OR SUCH OTHER INFORMA-
TION  AS  THE  SUPERINTENDENT  CONSIDERS APPROPRIATE, THE SUPERINTENDENT
DETERMINES THAT IT WOULD BE FEASIBLE TO  EXTEND  THE  INSURANCE  PROGRAM
UNDER  THIS  ARTICLE  TO  COVER OTHER PROPERTIES, THE SUPERINTENDENT MAY
TAKE SUCH ACTION UNDER THIS ARTICLE AS MAY BE NECESSARY TO  MAKE  INSUR-
ANCE AVAILABLE TO COVER, ON SUCH BASIS AS MAY BE FEASIBLE, ANY TYPES AND
CLASSES  OF:  OTHER RESIDENTIAL PROPERTIES; CHURCH PROPERTIES, AND BUSI-
NESS PROPERTIES WHICH ARE OWNED OR LEASED AND OPERATED BY SMALL BUSINESS
CONCERNS; OTHER BUSINESS  PROPERTIES;  PROPERTIES  OCCUPIED  BY  PRIVATE
NONPROFIT ORGANIZATIONS; AND PROPERTIES OWNED BY STATE AND LOCAL GOVERN-
MENTS  AND  AGENCIES  THEREOF; AND ANY SUCH EXTENSIONS OF THE PROGRAM TO
ANY TYPES AND CLASSES OF THESE PROPERTIES SHALL FROM  TIME  TO  TIME  BE
PRESCRIBED IN RULES AND REGULATIONS.
  S  5702.  NATURE AND LIMITATION OF INSURANCE COVERAGE. THE SUPERINTEN-
DENT SHALL  FROM  TIME  TO  TIME,  AFTER  CONSULTATION  WITH  INTERESTED
PARTIES, PROVIDE BY RULE AND REGULATION FOR GENERAL TERMS AND CONDITIONS
OF  INSURABILITY  WHICH  SHALL  BE APPLICABLE TO PROPERTIES ELIGIBLE FOR
TOXIC MOLD HAZARD INSURANCE COVERAGE UNDER SECTION FIVE  THOUSAND  SEVEN
HUNDRED  ONE  OF  THIS  ARTICLE,  INCLUDING:    THE  TYPES, CLASSES, AND
LOCATIONS OF ANY SUCH PROPERTIES WHICH SHALL BE ELIGIBLE FOR SUCH INSUR-
ANCE; THE NATURE AND LIMITS OF LOSS OR DAMAGE THAT  MAY  BE  COVERED  BY
SUCH  INSURANCE,  WHICH SHALL INCLUDE COSTS OF PROPERTY DAMAGE AND LOSS,
REMEDIATION, RELOCATION (DURING REMEDIATION OR PERMANENTLY), AND  RENTAL

A. 648                              7

OF AN ALTERNATIVE DWELLING DURING REMEDIATION; THE CLASSIFICATION, LIMI-
TATION,  AND REJECTION OF ANY RISKS THAT MAY BE APPROPRIATE; APPROPRIATE
MINIMUM PREMIUMS; APPROPRIATE LOSS-DEDUCTIBLES;  APPROPRIATE  LIMITS  ON
AGGREGATE  LIABILITY  UNDER SUCH COVERAGE, BASED ON THE TYPE OF PROPERTY
INSURED; AND ANY OTHER TERMS AND CONDITIONS RELATING TO INSURANCE COVER-
AGE OR EXCLUSION WHICH MAY BE NECESSARY TO CARRY  OUT  THE  PURPOSES  OF
THIS ARTICLE.
  S 5703. ESTIMATES OF PREMIUM RATES. THE SUPERINTENDENT SHALL UNDERTAKE
AND  CARRY  OUT SUCH STUDIES AND INVESTIGATIONS AND  RECEIVE OR EXCHANGE
SUCH INFORMATION AS MAY BE NECESSARY TO ESTIMATE, AND SHALL FROM TIME TO
TIME ESTIMATE THE FOLLOWING PREMIUM RATES FOR TOXIC MOLD  HAZARD  INSUR-
ANCE COVERAGE UNDER THIS ARTICLE:
  (A)  ACTUARIAL RATES. THE RISK PREMIUM RATES THAT WOULD BE REQUIRED TO
MAKE SUCH INSURANCE AVAILABLE ON AN ACTUARIAL BASIS FOR  ANY  TYPES  AND
CLASSES  OF  PROPERTIES  FOR WHICH INSURANCE COVERAGE IS AVAILABLE UNDER
SECTION FIVE THOUSAND SEVEN HUNDRED ONE OF THIS ARTICLE AND  WHICH:  ARE
BASED ON CONSIDERATION OF THE RISK INVOLVED AND ACCEPTED ACTUARIAL PRIN-
CIPLES;  INCLUDE THE APPLICABLE OPERATING COSTS AND ALLOWANCES SET FORTH
IN THE SCHEDULES PRESCRIBED UNDER SECTION FIVE  THOUSAND  SEVEN  HUNDRED
SIX  OF THIS ARTICLE AND REFLECTED IN SUCH RATES; AND INCLUDE ANY ADMIN-
ISTRATIVE EXPENSES OF CARRYING OUT  THE  INSURANCE  PROGRAM  UNDER  THIS
ARTICLE.
  (B)  SUBSIDIZED  RATES. THE RISK PREMIUM RATES THAT: ARE LESS THAN THE
RATES ESTIMATED UNDER SUBSECTION (A) OF THIS SECTION; WOULD  BE  REASON-
ABLE; WOULD ENCOURAGE PROSPECTIVE INSUREDS TO PURCHASE TOXIC MOLD HAZARD
INSURANCE  COVERAGE; WOULD BE CONSISTENT WITH THE PURPOSES OF THIS ARTI-
CLE; AND INCLUDE ANY ADMINISTRATIVE EXPENSES INCURRED  IN  CARRYING  OUT
THE INSURANCE PROGRAM UNDER THIS ARTICLE.
  S 5704. ESTABLISHMENT OF CHARGEABLE PREMIUM RATES. (A) ON THE BASIS OF
ESTIMATES  MADE  UNDER SECTION FIVE THOUSAND SEVEN HUNDRED THREE OF THIS
ARTICLE AND SUCH OTHER INFORMATION AS MAY BE NECESSARY, THE  SUPERINTEN-
DENT  SHALL  FROM  TIME  TO TIME, AFTER CONSULTATION WITH THE INTERESTED
PARTIES, PRESCRIBE BY RULES AND REGULATIONS:  CHARGEABLE  PREMIUM  RATES
FOR  ANY  TYPES  AND  CLASSES OF PROPERTIES FOR WHICH INSURANCE COVERAGE
SHALL BE AVAILABLE UNDER SECTION FIVE THOUSAND SEVEN HUNDRED ONE OF THIS
ARTICLE (AT LESS THAN THE ESTIMATED RISK  PREMIUM  RATES  UNDER  SECTION
FIVE THOUSAND SEVEN HUNDRED THREE OF THIS ARTICLE, WHERE NECESSARY), AND
THE  TERMS  AND CONDITIONS UNDER WHICH, AND THE AREAS WITHIN WHICH, SUCH
RATES SHALL APPLY.
  (B) SUCH RATES SHALL, INSOFAR AS PRACTICABLE, BE:
  (1) BASED ON A CONSIDERATION OF THE RESPECTIVE RISKS INVOLVED, INCLUD-
ING DIFFERENCES IN RISKS DUE TO CONSTRUCTION TYPES AND MATERIALS, BUILD-
ING SYSTEMS, GEOLOGY, CLIMATE, AND OTHER FACTORS THAT  MAY  AFFECT  MOLD
LEVELS IN BUILDINGS;
  (2)  ADEQUATE,  ON  THE  BASIS  OF  ACCEPTED  ACTUARIAL PRINCIPLES, TO
PROVIDE RESERVES FOR ANTICIPATED LOSSES; OR IF  LESS  THAN  SUCH  AMOUNT
CONSISTENT  WITH  THE  OBJECTIVE  OF  MAKING TOXIC MOLD HAZARD INSURANCE
COVERAGE AVAILABLE WHERE NECESSARY AT REASONABLE RATES SO AS TO  ENCOUR-
AGE  PROSPECTIVE  INSUREDS  TO  PURCHASE  SUCH  INSURANCE  AND  WITH THE
PURPOSES OF THIS ARTICLE;
  (3) ADEQUATE TO PROVIDE FOR ANY ADMINISTRATIVE EXPENSES OF THE  INSUR-
ANCE PROGRAMS UNDER THIS ARTICLE; AND
  (4)  STATED  SO  AS TO REFLECT THE BASIS FOR SUCH RATES, INCLUDING THE
DIFFERENCES (IF ANY) BETWEEN THE ESTIMATED ACTUARIAL RISK PREMIUM  RATES
UNDER  SUBSECTION  (A)  OF  SECTION FIVE THOUSAND SEVEN HUNDRED THREE OF
THIS ARTICLE AND THE  ESTIMATED  SUBSIDIZED  RISK  PREMIUM  RATES  UNDER

A. 648                              8

SUBSECTION  (B)  OF  SECTION  FIVE  THOUSAND SEVEN HUNDRED THREE OF THIS
ARTICLE.
  (C)  SUBJECT  ONLY  TO  THE  LIMITATION UNDER SUBDIVISION FOUR OF THIS
SECTION, THE CHARGEABLE RATE  WITH  RESPECT  TO  ANY  PROPERTY  THAT  IS
LOCATED WITHIN A JURISDICTION THAT THE SUPERINTENDENT DETERMINES HAS NOT
ADOPTED ADEQUATE TOXIC MOLD CONTROL MEASURES, WITH EFFECTIVE ENFORCEMENT
PROVISIONS,  THAT  THE SUPERINTENDENT DETERMINES ARE CONSISTENT WITH THE
MODEL STANDARDS AND TECHNIQUES FOR INSPECTION AND CERTIFICATION OF OCCU-
PANCY ISSUED UNDER SECTION FORTY-EIGHT HUNDRED FIFTY-FIVE OF THE  PUBLIC
HEALTH  LAW  AND  WITH  THE MODEL STANDARDS FOR PUBLIC DISCLOSURE ISSUED
UNDER SECTION FORTY-EIGHT HUNDRED FIFTY-SIX OF THE  PUBLIC  HEALTH  LAW,
SHALL  NOT  BE  LESS THAN THE APPLICABLE ESTIMATED RISK PREMIUM RATE FOR
SUCH AREA (OR SUBDIVISION THEREOF) UNDER SUBSECTION (A) OF SECTION  FIVE
THOUSAND  SEVEN  HUNDRED THREE OF THIS ARTICLE, EXCEPT THAT SUCH PREMIUM
RATE FOR SUCH PROPERTIES SHALL BE AFFORDABLE AND REASONABLY PRICED.
  (D) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE, THE  CHARGEA-
BLE  RISK PREMIUM RATES FOR TOXIC MOLD HAZARD INSURANCE UNDER THIS ARTI-
CLE FOR ANY PROPERTIES WITHIN ANY SINGLE RISK CLASSIFICATION MAY NOT  BE
INCREASED  BY  AN  AMOUNT  THAT WOULD RESULT IN THE AVERAGE OF SUCH RATE
INCREASES FOR PROPERTIES  WITHIN  THE  RISK  CLASSIFICATION  DURING  ANY
TWELVE-MONTH  PERIOD  EXCEEDING  TEN  PERCENT OF THE AVERAGE OF THE RISK
PREMIUM RATES FOR PROPERTIES WITHIN THE  RISK  CLASSIFICATION  UPON  THE
COMMENCEMENT OF SUCH TWELVE-MONTH PERIOD.
  (E)  THE  CHARGEABLE RISK PREMIUM RATE FOR TOXIC MOLD HAZARD INSURANCE
UNDER THIS ARTICLE FOR A SINGLE FAMILY DWELLING SHALL BE AFFORDABLE  AND
REASONABLY PRICED.
  S  5705.  TOXIC MOLD HAZARD INSURANCE FUND. (A) TO CARRY OUT THE TOXIC
MOLD HAZARD INSURANCE PROGRAM UNDER  THIS  ARTICLE,  THE  SUPERINTENDENT
SHALL  ESTABLISH  A  TOXIC MOLD HAZARD INSURANCE FUND, WHICH SHALL BE AN
ACCOUNT SEPARATE FROM ANY OTHER  ACCOUNTS  OR  FUNDS  AVAILABLE  TO  THE
SUPERINTENDENT  AND  SHALL BE AVAILABLE FOR MAKING SUCH PAYMENTS AS MAY,
FROM TIME TO TIME, BE REQUIRED UNDER SECTION FIVE THOUSAND SEVEN HUNDRED
FIFTEEN OF THIS ARTICLE; AND FOR THE PURPOSES SPECIFIED IN THIS  SECTION
UNDER THE CONDITIONS PROVIDED THEREIN.
  (B) THE FUND SHALL BE CREDITED WITH ANY AMOUNTS AS MAY BE APPROPRIATED
FOR  THE  FUND;  INTEREST WHICH MAY BE EARNED ON INVESTMENTS OF THE FUND
PURSUANT TO SUBSECTION (C) OF THIS  SECTION;  RECEIPTS  FROM  ANY  OTHER
OPERATIONS  UNDER  THIS ARTICLE (INCLUDING PREMIUMS UNDER THE CONDITIONS
SPECIFIED IN THIS SECTION); AND SUCH OTHER AMOUNTS AS MAY BE CREDITED TO
THE FUND.
  (C) IF THE SUPERINTENDENT DETERMINES THAT THE AMOUNTS IN THE FUND  ARE
IN  EXCESS  OF CURRENT NEEDS, THE SUPERINTENDENT MAY INVEST SUCH AMOUNTS
AS THE SUPERINTENDENT DEEMS ADVISABLE.
  S 5706. OPERATING COSTS AND ALLOWANCES. (A) THE  SUPERINTENDENT  SHALL
FROM  TIME  TO  TIME  NEGOTIATE  WITH APPROPRIATE REPRESENTATIVES OF THE
INSURANCE INDUSTRY FOR THE PURPOSE OF ESTABLISHING A CURRENT SCHEDULE OF
OPERATING COSTS APPLICABLE BOTH TO RISK-SHARING INSURANCE COMPANIES  AND
OTHER  INSURERS AND TO INSURANCE COMPANIES AND OTHER INSURERS, INSURANCE
AGENTS AND BROKERS, AND INSURANCE ADJUSTMENT ORGANIZATIONS PARTICIPATING
ON OTHER THAN A RISK-SHARING BASIS, AND A CURRENT SCHEDULE OF  OPERATING
ALLOWANCES  APPLICABLE  TO  RISK-SHARING  INSURANCE  COMPANIES AND OTHER
INSURERS.
  (B) FOR PURPOSES OF SUBSECTION (A)  OF  THIS  SECTION,  THE  FOLLOWING
DEFINITIONS SHALL APPLY:

A. 648                              9

  (1)  "OPERATING  ALLOWANCES" SHALL MEAN AMOUNTS FOR PROFIT AND CONTIN-
GENCIES THAT THE SUPERINTENDENT DETERMINES ARE REASONABLE AND  NECESSARY
TO CARRY OUT THE PURPOSES OF THIS ARTICLE.
  (2)"OPERATING  COSTS"  SHALL  MEAN EXPENSE REIMBURSEMENTS COVERING THE
DIRECT, ACTUAL, AND NECESSARY EXPENSES INCURRED IN CONNECTION WITH SELL-
ING AND SERVICING  TOXIC  MOLD  HAZARD  INSURANCE  COVERAGE;  REASONABLE
COMPENSATION PAYABLE FOR SELLING AND SERVICING SUCH COVERAGE, OR COMMIS-
SIONS  OR  SERVICE FEES PAID TO PRODUCERS; LOSS ADJUSTMENT EXPENSES; AND
OTHER DIRECT, ACTUAL, AND NECESSARY EXPENSES  WHICH  THE  SUPERINTENDENT
FINDS  ARE  INCURRED IN CONNECTION WITH SELLING OR SERVICING SUCH INSUR-
ANCE COVERAGE.
  S 5707. PAYMENT OF CLAIMS. THE SUPERINTENDENT  SHALL  PRESCRIBE  RULES
AND  REGULATIONS  ESTABLISHING  THE  GENERAL  METHOD OR METHODS BY WHICH
PROVED AND APPROVED CLAIMS FOR LOSSES MAY BE ADJUSTED AND PAID  FOR  ANY
LOSSES  OR DAMAGES COVERED BY TOXIC MOLD HAZARD INSURANCE MADE AVAILABLE
UNDER THIS ARTICLE.
  S 5708. DISSEMINATION OF  INSURANCE  INFORMATION.  THE  SUPERINTENDENT
SHALL FROM TIME TO TIME TAKE SUCH ACTION AS MAY BE NECESSARY IN ORDER TO
MAKE  INFORMATION  AVAILABLE  TO  THE  PUBLIC, AND TO ANY STATE OR LOCAL
AGENCY OR OFFICIAL, WITH REGARD  TO  THE  TOXIC  MOLD  HAZARD  INSURANCE
PROGRAM,  ITS  COVERAGE,  AND  OBJECTIVES;  AND ESTIMATED AND CHARGEABLE
INSURANCE PREMIUM RATES UNDER THE PROGRAM, INCLUDING THE BASIS  FOR  AND
DIFFERENCES BETWEEN SUCH RATES IN ACCORDANCE WITH THE PROVISIONS OF THIS
ARTICLE.
  S  5709.  COORDINATION  WITH  OTHER  PROGRAMS.  IN  CARRYING  OUT  THE
PROVISIONS OF THIS ARTICLE, THE SUPERINTENDENT SHALL CONSULT WITH  OTHER
DEPARTMENTS  AND  AGENCIES  OF  THE STATE, AND WITH INTERSTATE AND LOCAL
AGENCIES  HAVING  RESPONSIBILITIES  FOR  TOXIC   MOLD   INSPECTION   AND
PREVENTION,  IN  ORDER  TO ENSURE THAT THE PROGRAMS OF SUCH AGENCIES AND
THE PROGRAM UNDER THIS ARTICLE ARE MUTUALLY CONSISTENT.
  S 5710. REPORTS. THE SUPERINTENDENT SHALL ANNUALLY SUBMIT A REPORT  OF
OPERATIONS  UNDER  THIS ARTICLE TO THE GOVERNOR, THE TEMPORARY PRESIDENT
OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY.
  S 5711. IMPLEMENTATION. FOLLOWING  SUCH  CONSULTATION  WITH  REPRESEN-
TATIVES  OF  THE INSURANCE INDUSTRY AS MAY BE NECESSARY, THE SUPERINTEN-
DENT SHALL IMPLEMENT THE TOXIC MOLD HAZARD INSURANCE PROGRAM UNDER  THIS
ARTICLE.
  S  5712. INDUSTRY INSURANCE POOL. (A) THE SUPERINTENDENT MAY ENCOURAGE
AND OTHERWISE ASSIST ANY INSURANCE COMPANIES  AND  OTHER  INSURERS  THAT
MEET THE REQUIREMENTS PRESCRIBED UNDER SUBSECTION (B) OF THIS SECTION TO
FORM,  ASSOCIATE,  OR  OTHERWISE  JOIN  TOGETHER  IN  A POOL IN ORDER TO
PROVIDE THE INSURANCE COVERAGE AUTHORIZED UNDER THIS  ARTICLE,  AND  FOR
THE  PURPOSE  OF ASSUMING, ON SUCH TERMS AND CONDITIONS AS MAY BE AGREED
UPON, SUCH FINANCIAL RESPONSIBILITY AS WILL ENABLE  SUCH  COMPANIES  AND
OTHER  INSURERS, WITH THE FINANCIAL AND OTHER ASSISTANCE AVAILABLE UNDER
THIS ARTICLE, TO ASSURE A REASONABLE PROPORTION  OF  RESPONSIBILITY  FOR
THE  ADJUSTMENT  AND  PAYMENT  OF CLAIMS FOR LOSSES UNDER THE TOXIC MOLD
HAZARD INSURANCE PROGRAM.
  (B) TO PROMOTE THE EFFECTIVE ADMINISTRATION OF THE TOXIC  MOLD  HAZARD
INSURANCE  PROGRAM UNDER THIS ARTICLE, AND TO ENSURE THAT THE OBJECTIVES
OF THIS ARTICLE ARE FURTHERED, THE SUPERINTENDENT MAY  PRESCRIBE  APPRO-
PRIATE  REQUIREMENTS  FOR INSURANCE COMPANIES AND OTHER INSURERS PARTIC-
IPATING IN  SUCH  POOL,  INCLUDING  MINIMUM  REQUIREMENTS  FOR  CAPITAL,
SURPLUS OR ASSETS.
  S  5713.  AGREEMENTS  WITH  INSURANCE POOL. (A) THE SUPERINTENDENT MAY
ENTER INTO SUCH AGREEMENTS WITH THE POOL  FORMED  OR  OTHERWISE  CREATED

A. 648                             10

UNDER  THIS  ARTICLE  AS THE SUPERINTENDENT DEEMS NECESSARY TO CARRY OUT
THE PURPOSES OF THIS ARTICLE.
  (B)  SUCH  AGREEMENTS  SHALL  SPECIFY:  THE TERMS AND CONDITIONS UNDER
WHICH RISK CAPITAL WILL BE AVAILABLE FOR THE ADJUSTMENT AND PAYMENTS  OF
CLAIMS; THE TERMS AND CONDITIONS UNDER WHICH THE POOL (AND THE COMPANIES
AND  OTHER INSURERS PARTICIPATING THEREIN) SHALL PARTICIPATE IN PREMIUMS
RECEIVED AND PROFITS OR LOSSES REALIZED OR SUSTAINED; THE MAXIMUM AMOUNT
OF PROFIT, ESTABLISHED BY THE SUPERINTENDENT AND SET FORTH IN THE SCHED-
ULES PRESCRIBED UNDER SECTION FIVE THOUSAND SEVEN HUNDRED  SIX  OF  THIS
ARTICLE, WHICH MAY BE REALIZED BY SUCH POOL (AND THE COMPANIES AND OTHER
INSURERS  PARTICIPATING  THEREIN);  THE TERMS AND CONDITIONS UNDER WHICH
OPERATING COSTS AND ALLOWANCES SET FORTH  IN  THE  SCHEDULES  PRESCRIBED
UNDER  SECTION  FIVE  THOUSAND  SEVEN HUNDRED SIX OF THIS ARTICLE MAY BE
PAID; AND THE TERMS AND  CONDITIONS  UNDER  WHICH  PREMIUM  EQUALIZATION
PAYMENTS UNDER SECTION FIVE THOUSAND SEVEN HUNDRED FIFTEEN OF THIS ARTI-
CLE WILL BE MADE.
  (C)  IN ADDITION, SUCH AGREEMENTS SHALL CONTAIN SUCH PROVISIONS AS THE
SUPERINTENDENT FINDS NECESSARY TO ENSURE THAT: NO INSURANCE  COMPANY  OR
OTHER  INSURER  THAT  MEETS THE REQUIREMENTS PRESCRIBED UNDER SUBSECTION
(B) OF SECTION FIVE THOUSAND SEVEN HUNDRED TWELVE OF  THIS  ARTICLE  AND
HAS  INDICATED  AN  INTENTION  TO  PARTICIPATE  IN THE TOXIC MOLD HAZARD
INSURANCE PROGRAM ON A RISK-SHARING BASIS, WILL BE EXCLUDED FROM PARTIC-
IPATING IN THE POOL; THE INSURANCE COMPANIES AND OTHER INSURERS  PARTIC-
IPATING  IN  THE  POOL  WILL  TAKE  WHATEVER  ACTION MAY BE NECESSARY TO
PROVIDE CONTINUITY OF TOXIC MOLD HAZARD INSURANCE COVERAGE BY THE  POOL;
AND  ANY  INSURANCE  COMPANIES AND OTHER INSURERS, INSURANCE AGENTS, AND
BROKERS AND INSURANCE ADJUSTMENT  ORGANIZATIONS  WILL  BE  PERMITTED  TO
COOPERATE  WITH  THE POOL AS FISCAL AGENTS OR OTHERWISE, ON OTHER THAN A
RISK-SHARING BASIS, TO THE MAXIMUM EXTENT PRACTICABLE.
  S 5714. ADJUSTMENT AND PAYMENT OF  CLAIMS  AND  JUDICIAL  REVIEW.  THE
INSURANCE  COMPANIES  AND OTHER INSURERS THAT FORM, ASSOCIATE, OR OTHER-
WISE JOIN TOGETHER IN THE POOL UNDER THIS PART MAY ADJUST  AND  PAY  ALL
CLAIMS  FOR  PROVED  AND  APPROVED  LOSSES  COVERED BY TOXIC MOLD HAZARD
INSURANCE IN ACCORDANCE WITH THE PROVISIONS OF THIS  ARTICLE  AND,  UPON
THE DISALLOWANCE BY ANY SUCH COMPANY OR OTHER INSURER OF ANY SUCH CLAIM,
OR  UPON  THE  REFUSAL OF THE CLAIMANT TO ACCEPT THE AMOUNT ALLOWED UPON
ANY SUCH CLAIM, THE CLAIMANT, WITHIN ONE YEAR AFTER THE DATE OF  MAILING
OF  NOTICE  OF  DISALLOWANCE  OR  PARTIAL DISALLOWANCE OF THE CLAIM, MAY
INSTITUTE AN ACTION ON SUCH CLAIM AGAINST SUCH COMPANY OR OTHER INSURER.
  S 5715. PREMIUM EQUALIZATION PAYMENTS. (A) THE SUPERINTENDENT, ON SUCH
TERMS AND CONDITIONS  AS  THE  SUPERINTENDENT  MAY  FROM  TIME  TO  TIME
PRESCRIBE,  SHALL MAKE PERIODIC PAYMENTS TO THE POOL FORMED OR OTHERWISE
CREATED UNDER SECTION FIVE THOUSAND SEVEN HUNDRED TWELVE OF  THIS  ARTI-
CLE, IN RECOGNITION OF SUCH REDUCTIONS IN CHARGEABLE PREMIUM RATES UNDER
SECTION FIVE THOUSAND SEVEN HUNDRED FOURTEEN OF THIS ARTICLE BELOW ESTI-
MATED  PREMIUM  RATES UNDER SECTION FIVE THOUSAND SEVEN HUNDRED THREE OF
THIS ARTICLE AS ARE REQUIRED IN ORDER TO MAKE TOXIC MOLD  HAZARD  INSUR-
ANCE AVAILABLE ON REASONABLE TERMS AND CONDITIONS.
  (B)  DESIGNATED  PERIODS UNDER THIS SECTION AND THE METHODS FOR DETER-
MINING THE SUM OF PREMIUMS PAID OR PAYABLE DURING SUCH PERIODS SHALL  BE
ESTABLISHED BY THE SUPERINTENDENT.
  S  5716.  EMERGENCY IMPLEMENTATION OF PROGRAM. (A) NOTWITHSTANDING ANY
OTHER PROVISIONS OF THIS ARTICLE, FOR THE  PURPOSE  OF  PROVIDING  TOXIC
MOLD HAZARD INSURANCE COVERAGE AT THE EARLIEST POSSIBLE TIME, THE SUPER-
INTENDENT  MAY CARRY OUT THE INSURANCE PROGRAM UNDER THIS ARTICLE DURING
THE PERIOD ENDING SEPTEMBER THIRTIETH, TWO THOUSAND TEN,  IN  ACCORDANCE

A. 648                             11

WITH THE PROVISIONS OF THIS ARTICLE INSOFAR AS THEY RELATE TO THIS ARTI-
CLE, BUT SUBJECT TO THE MODIFICATIONS MADE BY OR UNDER SUBSECTION (B) OF
THIS SECTION.
  (B)  IN  CARRYING OUT THE TOXIC MOLD HAZARD INSURANCE PROGRAM PURSUANT
TO SUBSECTION (A) OF THIS  SECTION,  THE  SUPERINTENDENT  SHALL  PROVIDE
INSURANCE  COVERAGE  WITHOUT  REGARD TO ANY ESTIMATED RISK PREMIUM RATES
WHICH WOULD OTHERWISE BE DETERMINED UNDER SECTION  FIVE  THOUSAND  SEVEN
HUNDRED  THREE  OF  THIS  ARTICLE;  AND SHALL UTILIZE THE PROVISIONS AND
PROCEDURES CONTAINED IN OR PRESCRIBED BY THIS ARTICLE TO SUCH EXTENT AND
IN SUCH MANNER AS THE SUPERINTENDENT MAY CONSIDER NECESSARY OR APPROPRI-
ATE TO CARRY OUT THE PURPOSE OF THIS SECTION.
  S 5717. ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW.  IF  THE
PROGRAM  IS  CARRIED OUT AS PROVIDED IN THIS ARTICLE, THE SUPERINTENDENT
MAY ADJUST AND MAKE PAYMENT OF ANY CLAIMS FOR PROVED AND APPROVED LOSSES
COVERED BY TOXIC MOLD HAZARD INSURANCE, AND UPON THE DISALLOWANCE BY THE
SUPERINTENDENT OF ANY SUCH CLAIMS, OR UPON THE REFUSAL OF  THE  CLAIMANT
TO  ACCEPT  THE AMOUNT ALLOWED UPON ANY SUCH CLAIM, THE CLAIMANT, WITHIN
ONE YEAR AFTER THE DATE OF MAILING OF NOTICE OF DISALLOWANCE OR  PARTIAL
DISALLOWANCE  BY THE SUPERINTENDENT, MAY INSTITUTE AN ACTION AGAINST THE
SUPERINTENDENT ON SUCH CLAIM.
  S 5718. SERVICES BY THE INSURANCE INDUSTRY. IN ADMINISTERING THE TOXIC
MOLD HAZARD INSURANCE PROGRAM UNDER THIS ARTICLE, THE SUPERINTENDENT MAY
ENTER INTO ANY CONTRACTS, AGREEMENTS, OR OTHER APPROPRIATE  ARRANGEMENTS
WHICH MAY, FROM TIME TO TIME, BE NECESSARY FOR THE PURPOSE OF UTILIZING,
ON  SUCH  TERMS AND CONDITIONS AS MAY BE AGREED UPON, THE FACILITIES AND
SERVICES OF ANY INSURANCE COMPANIES OR OTHER INSURERS, INSURANCE  AGENTS
AND  BROKERS, OR INSURANCE ADJUSTMENT ORGANIZATIONS; AND SUCH CONTRACTS,
AGREEMENTS, OR ARRANGEMENTS MAY INCLUDE PROVISION FOR PAYMENT OF  APPLI-
CABLE OPERATING COSTS AND ALLOWANCES FOR SUCH FACILITIES AND SERVICES AS
SET  FORTH IN THE SCHEDULES PRESCRIBED UNDER SECTION FIVE THOUSAND SEVEN
HUNDRED SIX OF THIS ARTICLE.
  S 5719. USE OF INSURANCE POOL, COMPANIES OR  OTHER  PRIVATE  ORGANIZA-
TIONS FOR CERTAIN PAYMENTS. (A) TO PROVIDE FOR MAXIMUM EFFICIENCY IN THE
ADMINISTRATION OF THE TOXIC MOLD HAZARD INSURANCE PROGRAM AND TO FACILI-
TATE THE EXPEDITIOUS PAYMENT OF ANY FUNDS UNDER SUCH PROGRAM, THE SUPER-
INTENDENT  MAY  ENTER  INTO  CONTRACTS  WITH  A POOL FORMED OR OTHERWISE
CREATED UNDER SECTION FIVE THOUSAND SEVEN HUNDRED TWELVE OF  THIS  ARTI-
CLE,  OR  ANY  INSURANCE  COMPANY OR OTHER PRIVATE ORGANIZATION, FOR THE
PURPOSE OF SECURING PERFORMANCE BY SUCH POOL, COMPANY,  OR  ORGANIZATION
OR  ANY  OR  ALL OF THE FOLLOWING RESPONSIBILITIES: ESTIMATING AND LATER
DETERMINING ANY AMOUNTS OF PAYMENTS  TO  BE  MADE;  RECEIVING  FROM  THE
SUPERINTENDENT,  DISBURSING,  AND  ACCOUNTING  FOR  FUNDS IN MAKING SUCH
PAYMENTS; MAKING SUCH AUDITS OF THE RECORDS OF ANY INSURANCE COMPANY  OR
OTHER INSURER, INSURANCE AGENT OR BROKER, OR INSURANCE ADJUSTMENT ORGAN-
IZATION  AS  MAY  BE  NECESSARY TO ASSURE THAT PROPER PAYMENTS ARE MADE;
OTHERWISE ASSISTING IN SUCH  MANNER  AS  THE  CONTRACT  MAY  PROVIDE  TO
FURTHER THE PURPOSES OF THIS ARTICLE.
  (B)  ANY  CONTRACT  WITH  THE  POOL  OR  AN INSURANCE COMPANY OR OTHER
PRIVATE ORGANIZATION UNDER THIS  SECTION  MAY  CONTAIN  SUCH  TERMS  AND
CONDITIONS  AS  THE  SUPERINTENDENT  FINDS  NECESSARY OR APPROPRIATE FOR
CARRYING OUT RESPONSIBILITIES UNDER SUBSECTION (A) OF THIS SECTION,  AND
MAY PROVIDE FOR PAYMENT OF ANY COSTS WHICH THE SUPERINTENDENT DETERMINES
ARE  INCIDENTAL  TO CARRYING OUT SUCH RESPONSIBILITIES WHICH ARE COVERED
BY THE CONTRACT.
  (C) NO CONTRACT MAY BE ENTERED INTO  UNDER  THIS  SECTION  UNLESS  THE
SUPERINTENDENT  FINDS  THAT  THE  POOL,  COMPANY,  OR  ORGANIZATION WILL

A. 648                             12

PERFORM ITS OBLIGATIONS UNDER THE CONTRACT EFFICIENTLY AND  EFFECTIVELY,
AND  WILL  MEET  SUCH REQUIREMENTS AS TO FINANCIAL RESPONSIBILITY, LEGAL
AUTHORITY, AND OTHER MATTERS AS THE SUPERINTENDENT FINDS APPROPRIATE.
  (D)(1)  ANY  SUCH CONTRACT MAY REQUIRE THE POOL, COMPANY, OR ORGANIZA-
TION OR ANY OF ITS OFFICERS OR EMPLOYEES CERTIFYING PAYMENTS OR DISBURS-
ING FUNDS PURSUANT TO THE CONTRACT, OR OTHERWISE PARTICIPATING IN CARRY-
ING OUT THE CONTRACT,  TO  GIVE  SURETY  BOND  IN  SUCH  AMOUNT  AS  THE
SUPERINTENDENT MAY DEEM APPROPRIATE.
  (2)(A)  NO  INDIVIDUAL  DESIGNATED  PURSUANT  TO A CONTRACT UNDER THIS
SECTION TO CERTIFY PAYMENTS SHALL, IN THE ABSENCE OF GROSS NEGLIGENCE OR
INTENT TO DEFRAUD, BE LIABLE WITH RESPECT TO ANY  PAYMENT  CERTIFIED  BY
SUCH INDIVIDUAL UNDER THIS SECTION.
  (B)  NO  OFFICER DISBURSING FUNDS SHALL IN THE ABSENCE OF GROSS NEGLI-
GENCE OR INTENT TO DEFRAUD, BE LIABLE WITH RESPECT  TO  ANY  PAYMENT  BY
SUCH OFFICER UNDER THIS SECTION IF IT WAS BASED UPON A VOUCHER SIGNED BY
AN INDIVIDUAL DESIGNATED TO CERTIFY PAYMENTS.
  (E)  ANY  CONTRACT ENTERED INTO UNDER THIS SECTION SHALL BE FOR A TERM
OF ONE YEAR, AND MAY BE MADE AUTOMATICALLY RENEWABLE FROM TERM  TO  TERM
IN THE ABSENCE OF NOTICE BY EITHER PARTY OF AN INTENTION TO TERMINATE AT
THE  END  OF THE CURRENT TERM; EXCEPT THAT THE SUPERINTENDENT MAY TERMI-
NATE ANY SUCH CONTRACT AT ANY TIME (AFTER REASONABLE NOTICE TO THE POOL,
COMPANY, OR ORGANIZATION INVOLVED) IF THE SUPERINTENDENT FINDS THAT  THE
POOL, COMPANY, OR ORGANIZATION HAS FAILED SUBSTANTIALLY TO CARRY OUT THE
CONTRACT,  OR IS CARRYING OUT THE CONTRACT IN A MANNER INCONSISTENT WITH
THE EFFICIENT AND EFFECTIVE ADMINISTRATION  OF  THE  TOXIC  MOLD  HAZARD
INSURANCE PROGRAM UNDER THIS ARTICLE.
  S  5720.  SETTLEMENT  AND ARBITRATION. (A) THE SUPERINTENDENT MAY MAKE
FINAL SETTLEMENT OF ANY CLAIMS OR DEMANDS WHICH MAY ARISE AS A RESULT OF
ANY FINANCIAL TRANSACTIONS THAT  THE  SUPERINTENDENT  IS  AUTHORIZED  TO
CARRY  OUT  UNDER  THIS ARTICLE AND MAY, TO ASSIST THE SUPERINTENDENT IN
MAKING ANY SUCH SETTLEMENT, REFER ANY DISPUTES RELATING TO  SUCH  CLAIMS
OR DEMANDS TO ARBITRATION, WITH THE CONSENT OF THE PARTIES CONCERNED.
  (B) SUCH ARBITRATION SHALL BE ADVISORY IN NATURE, AND ANY AWARD, DECI-
SION,  OR  RECOMMENDATION WHICH MAY BE MADE SHALL BECOME FINAL ONLY UPON
THE APPROVAL OF THE SUPERINTENDENT.
  S 5721. RECORDS AND AUDITS. (A) THE INSURANCE POOL FORMED OR OTHERWISE
CREATED UNDER THIS ARTICLE, AND ANY INSURANCE COMPANY OR  OTHER  PRIVATE
ORGANIZATION  EXECUTING  ANY  CONTRACT,  AGREEMENT, OR OTHER APPROPRIATE
ARRANGEMENT WITH THE SUPERINTENDENT UNDER THIS ARTICLE, SHALL KEEP  SUCH
RECORDS  AS  THE SUPERINTENDENT SHALL PRESCRIBE, INCLUDING RECORDS WHICH
FULLY DISCLOSE THE TOTAL COSTS OF THE PROGRAM UNDERTAKEN OR THE SERVICES
BEING RENDERED, AND SUCH OTHER RECORDS AS WILL FACILITATE  AN  EFFECTIVE
AUDIT.
  (B)  THE  SUPERINTENDENT  AND  THE  COMPTROLLER,  OR ANY OF THEIR DULY
AUTHORIZED REPRESENTATIVES, SHALL HAVE ACCESS FOR THE PURPOSE  OF  AUDIT
AND  EXAMINATION  TO ANY BOOKS, DOCUMENTS, PAPERS AND ANY SUCH INSURANCE
COMPANY OR OTHER PRIVATE ORGANIZATION THAT ARE PERTINENT TO THE COSTS OF
THE PROGRAM UNDERTAKEN OR THE SERVICES BEING RENDERED.
  S 5722. PAYMENTS. ANY PAYMENTS UNDER THIS ARTICLE MAY BE  MADE  (AFTER
NECESSARY  ADJUSTMENT  ON  ACCOUNT  OF  PREVIOUSLY MADE UNDERPAYMENTS OR
OVERPAYMENTS) IN ADVANCE  OR  BY  WAY  OF  REIMBURSEMENT,  AND  IN  SUCH
INSTALLMENTS  AND  ON  SUCH CONDITIONS, AS THE SUPERINTENDENT MAY DETER-
MINE.
  S 4. The sum of two hundred fifty thousand dollars ($250,000),  or  so
much  thereof  as  may  be  necessary, is hereby appropriated to pay the
expenses incurred, including  personal  service,  in  carrying  out  the

A. 648                             13

provisions  of  this  act. Such moneys shall be payable out of the state
treasury in the general fund to the credit of the state purposes account
after audit by and on the warrant of the comptroller upon voucher certi-
fied  or  approved  by  the  superintendent  of  insurance in the manner
prescribed by law.
  S 5. This act shall take effect on the sixtieth  day  after  it  shall
have become a law.