Authorizes the New York Liquidation Bureau to establish a program to evaluate and reimburse eligible local educational agencies for monetary liabilities arising from civil claims or settlement agreements related to certain acts that occurred during a period covered by a liability insurance policy issued by an insolvent insurer.
S T A T E O F N E W Y O R K
________________________________________________________________________
10065
I N A S S E M B L Y
January 30, 2026
___________
Introduced by M. of A. KASSAY, CONRAD, STERN, SCHIAVONI, K. BROWN --
read once and referred to the Committee on Insurance
AN ACT to amend the insurance law, in relation to authorizing the New
York Liquidation Bureau to establish a reimbursement program for
eligible local educational agencies
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings and intent. The legislature acknowl-
edges that local educational agencies (LEAs), including public school
districts and special education providers, are facing unanticipated and
significant financial liabilities resulting from settled civil claims
brought under the Child Victims Act. These settlements often arise from
misconduct occurring during periods when LEAs were insured by liability
carriers that have since become insolvent.
In many cases, the current LEAs are now required to satisfy settle-
ments or judgments without the avail of expected insurance coverage.
Under the Child Victims Act, the lookback window for civil claims was
originally set for one year and later extended by an additional year due
to the COVID-19 pandemic. However, the state has not yet accounted for
or addressed this extended period in relation to claims involving insol-
vent insurers. The New York Liquidation Bureau, under the Department of
Financial Services, administers the estates of insolvent insurers but is
not currently authorized to reimburse LEAs for such liabilities or
pursue reciprocal claims due to expired statutory limitations.
The legislature hereby finds that this legal gap creates an inequita-
ble burden on public educational institutions and threatens the fiscal
functionality of school systems throughout the state. Furthermore, the
legislature recognizes that the inability of LEAs to reach or fund
settlements due to insolvency risks directly undermines the ability of
victims to obtain timely restitution and resolution of their claims.
Accordingly, this act authorizes the Bureau to establish a reimbursement
program for eligible LEAs and empowers the Bureau and the State of New
York to supplement insolvent estates where necessary. This authorization
shall not apply to educational entities located within the City of New
York, which operates under separate and distinct educational funding
structures.
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