Senate Bill S8174A

2025-2026 Legislative Session

Relates to authorizing the New York Liquidation Bureau to establish a reimbursement program for eligible local educational agencies

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Current Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 10, 2026	print number 8174a
Feb 10, 2026	amend (t) and recommit to insurance
Jan 07, 2026	referred to insurance
May 19, 2025	referred to insurance

Bill Amendments

Original

A (Active)

2025-S8174 - Details

See Assembly Version of this Bill:: A10065
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §7438, Ins L

2025-S8174 - Summary

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.

2025-S8174 - Sponsor Memo

                                 
BILL NUMBER: S8174

SPONSOR: MARTINEZ
 
TITLE OF BILL:

An act to amend the insurance law, in relation to direct reimbursement
of certain local educational agencies for claims of violations of the
child victims act

 
PURPOSE:

Allow for local educational agencies who had insurance policies which
are now insolvent to access the liquidation bureau funds for the purpose
of paying liabilities and/or settlements related to the child victims
act.

 
SUMMARY OF PROVISIONS:

Section 1. Adds new section 7438 to the insurance law to allow local
educational agencies found liable or who have enter into a settlement
agreements as a result of the child victims act set forth in chapter
eleven of the laws of two thousand nineteen and can prove they had

insurance policies at the time of incident which are now insolvent, can
make an application to the liquidation bureau who shall cover the cost
in full, and gives the commissioner the power to promulgate policies and
procedures to implement the provisions of this section.

Section 2. Is the effective date

 
JUSTIFICATION:

The Child Victims Act (CVA) has helped many New Yorkers get compensation
for atrocious crimes they have had to suffer as children. While the CVA
was enacted in good faith and has helped many, some local educational
agencies have been saddled with substantial settlements and verdicts
they cannot pay without raising taxes substantially or cutting services.
What is troubling is most local educational agencies carried insurance
to protect them against these kinds of claims at the time these inci-
dents occurred, but cannot submit a claim because the insurance they
used are now insolvent. The liquidation bureau receives no funds from
taxpayers and its statutorily defined duty is to protect the interests
of the policyholders and creditors of insurance companies that have been
declared impaired or insolvent; unfortunately, many CVA cases fall out
of the bureau's current window to file a claim. This bill seeks to reme-
dy the burden some schools face by allowing them to submit applications
to the states liquidation bureau to cover the cost of liabilities
incurred as a result of CVA cases, as long as they can provide proof
they had insurance at the time the incidents took place. Children should
not have their education impacted by the crimes of bad actors and CVA
victims deserve full compensation for the traumatic crimes they experi-
enced.

 
FISCAL IMPLICATIONS:

TBD

 
EFFECTIVE DATE:
This bill shall take effect on the one hundred eightieth day after it
has become law.

2025-S8174 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8174
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 19, 2025
                                ___________
 
 Introduced  by Sen. MARTINEZ -- 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  direct  reimbursement
   of  certain local educational agencies for claims of violations of the
   child victims act

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The insurance law is amended by adding a new section 7438
 to read as follows:
   § 7438. DIRECT REIMBURSEMENT OF  LOCAL  EDUCATIONAL  AGENCIES  BY  THE
 LIQUIDATION  BUREAU  FOR  CERTAIN  MONETARY  LIABILITIES.  (A) ANY LOCAL
 EDUCATIONAL AGENCY THAT IS FOUND SUBJECT TO LIABILITY OR ENTERS  INTO  A
 SETTLEMENT  AGREEMENT  FOR  MONETARY PENALTIES AS A RESULT OF A CLAIM OR
 CLAIMS BROUGHT AGAINST THEM PURSUANT TO  THE  PROVISIONS  OF  THE  CHILD
 VICTIMS  ACT  SET  FORTH  IN  CHAPTER ELEVEN OF THE LAWS OF TWO THOUSAND
 NINETEEN WHICH EXTENDED CERTAIN STATUTES OF LIMITATIONS FOR  VICTIMS  OF
 CHILD  ABUSE,  AND THAT: (1) PROVIDES EVIDENCE THAT SUCH SCHOOL DISTRICT
 HAD INSURANCE COVERAGE AT THE TIME THE INCIDENT OCCURRED FOR WHICH  SUCH
 CLAIM  IS BASED THAT WOULD COVER LIABILITY FOR SUCH CLAIM; AND (2) SHOWS
 THAT SUCH INSURANCE COMPANY THAT PROVIDED SUCH COVERAGE AT SUCH TIME  IS
 NOW  INSOLVENT,  SHALL  BE  AUTHORIZED TO MAKE APPLICATION TO THE LIQUI-
 DATION BUREAU TO COVER THE COST OF  SUCH  MONETARY  LIABILITY  RESULTING
 FROM SUCH CLAIMS.
   (B)  UPON  A  SATISFACTORY SHOWING BY A SCHOOL DISTRICT OF MEETING THE
 REQUIREMENTS SET FORTH IN SUBSECTION (A) OF  THIS  SECTION,  THE  LIQUI-
 DATION BUREAU SHALL COVER THE COST OF SUCH MONETARY LIABILITY IN FULL.
   (C)  THE DEPARTMENT SHALL PROMULGATE POLICIES AND PROCEDURES TO IMPLE-
 MENT THE PROVISIONS OF THIS SECTION.
   § 2. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13170-01-5

co-Sponsors

2025-S8174A (ACTIVE) - Details

See Assembly Version of this Bill:: A10065
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §7438, Ins L

2025-S8174A (ACTIVE) - Summary

2025-S8174A (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8174A

SPONSOR: MARTINEZ
 
TITLE OF BILL:

An act to amend the insurance law, in relation to authorizing the New
York Liquidation Bureau to establish a reimbursement program for eligi-
ble local educational agencies

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to authorize the New York Liquidation Bureau
to establish a reimbursement program for local educational agencies
(LEAs) facing financial liabilities resulting from civil claims brought
under the Child Victims Act, in cases where the LEAs' liability insurers
have become insolvent. The bill aims to ensure that public schools
impacted by such claims are able to access relief through the estates of
these defunct insurers, or through alternative funding mechanisms, to
mitigate financial hardship and support victims' restitution.

 
SUMMARY OF PROVISIONS:

Section 1. States the Legislative Findings and intent.

Section 2. The Insurance law is amended by adding a new section 7438 to
authorize the Superintendent of Financial Services to create and admin-
ister a reimbursement program for school districts facing civil liabil-
ity under the Child Victims Act. Eligible districts must have held
insurance policies with insurers that are now insolvent and unable to
cover claims related to past abuse. The Superintendent may use funds
from the estates of insolvent insurers, or other funds under the Liqui-
dation Bureau's management where legally permissible, to provide
reimbursement. The section further authorizes the Superintendent to
promulgate rules and regulations necessary for the implementation and
oversight of the program.

Section 3. Establishes the enacting clause.

 
JUSTIFICATION:

This legislation supports the continued implementation of the Child
Victims Act (CVA) by providing a pathway for school districts to resolve
outstanding claims in situations where their former insurance carriers
have since entered liquidation. When the CVA lookback window was
enacted, it was designed to provide long-overdue justice for survivors
of childhood sexual abuse. However, some school districts are facing
significant challenges in meeting their obligations under the law due to
the insolvency of the insurers that covered them at the time the abuse
occurred. As a result, these districts are left without access to the
coverage they once held, even as survivors have received valid legal
judgments or entered into good faith settlements.

In these cases, the lack of available insurance has shifted the finan-
cial responsibility onto school districts that may not have the
resources to pay claims without making serious budgetary tradeoffs.
Districts have been forced to consider using reserve funds, bonding to
cover settlement costs, delaying capital projects, reducing programs, or
limiting staff hires. These choices can have a direct and lasting impact
on students, faculty, and the broader school community. While there is
technically a path to restitution, it is not readily accessible and
comes at the significant cost of weakening the core services school
districts provide today.

To address this issue, this legislation authorizes eligible school
districts to apply for funds held by the New York Liquidation Bureau in
scenarios where their insurer has been declared insolvent and that
insolvency has directly blocked the payment of a CVA judgment or settle-
ment. This measure does not create a new appropriation or entitlement.
Instead, it allows the Bureau, which already manages and distributes
assets from failed insurers, to evaluate and process applications from
impacted school districts under its existing structure and authority.

By establishing a clear process to access the appropriate liquidation
funds, this legislation helps close a gap in the CVA framework that has
left some survivors without a viable path to resolution. It also ensures
that school districts are not forced to choose between honoring legal
judgments and maintaining the educational services they provide to
current students. This approach offers a balanced and practical solution
that respects the rights of survivors while supporting the long-term
strength and stability of school communities.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date upon which it shall have become a law.

2025-S8174A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8174--A
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 19, 2025
                                ___________
 
 Introduced  by Sen. MARTINEZ -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance  --  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 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13170-03-6

 S. 8174--A                          2
 
 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.
   § 2. The insurance law is amended by adding a new section 7438 to read
 as follows:
   § 7438. REIMBURSEMENT PROGRAM FOR LOCAL EDUCATIONAL AGENCIES  IMPACTED
 BY  INSOLVENT INSURERS. (A) AS USED IN THIS SECTION, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (1) "LOCAL EDUCATIONAL  AGENCY"  OR  "LEA"  MEANS  ANY  PUBLIC  SCHOOL
 DISTRICT  OR APPROVED BOARD OF COOPERATIVE EDUCATIONAL SERVICES, EXCLUD-
 ING THOSE LOCATED WITHIN A CITY HAVING A POPULATION OF  ONE  MILLION  OR
 MORE.
   (2) "BUREAU" MEANS THE NEW YORK LIQUIDATION BUREAU.
   (3)  "INSOLVENT  INSURER"  MEANS ANY INSURER THAT HAS BEEN ADJUDICATED
 INSOLVENT PURSUANT TO AN ORDER OF LIQUIDATION BY A  COURT  OF  COMPETENT
 JURISDICTION  OF  THIS  STATE UNDER THIS ARTICLE, AND WHOSE ESTATE IS OR
 HAS BEEN ADMINISTERED BY THE BUREAU.
   (4) "CHILD VICTIMS ACT" MEANS CHAPTER ELEVEN OF THE LAWS OF TWO  THOU-
 SAND  NINETEEN  AND ANY SUBSEQUENT LAWS EXTENDING THE STATUTE OF LIMITA-
 TIONS FOR CIVIL CLAIMS BASED ON CHILD SEXUAL ABUSE.
   (B) NOTWITHSTANDING ANY OTHER PROVISION OF  LAW,  THE  SUPERINTENDENT,
 THROUGH THE BUREAU, IS AUTHORIZED TO ESTABLISH A PROGRAM TO EVALUATE AND
 REIMBURSE  ELIGIBLE  LEAS  FOR  MONETARY  LIABILITIES ARISING FROM CIVIL
 CLAIMS OR SETTLEMENT AGREEMENTS RELATED TO ACTS THAT OCCURRED  DURING  A
 PERIOD  COVERED  BY  A LIABILITY INSURANCE POLICY ISSUED BY AN INSOLVENT
 INSURER, PROVIDED THAT SUCH CLAIMS ARE BROUGHT  PURSUANT  TO  THE  CHILD
 VICTIMS ACT.
   (C)  A  LEA  SHALL BE ELIGIBLE FOR REIMBURSEMENT UNDER THIS SECTION IF
 IT:
   (1) DEMONSTRATES THAT THE INSURER WHICH  ISSUED  THE  POLICY,  OR  ANY
 SUCCESSOR  INSURER  THAT  HAS ASSUMED THE ISSUING INSURER'S OBLIGATIONS,
 HAS BEEN ADJUDICATED INSOLVENT PURSUANT TO AN ORDER OF LIQUIDATION BY  A
 COURT OF COMPETENT JURISDICTION OF THIS STATE UNDER THIS ARTICLE;
   (2)  PROVIDES DOCUMENTATION THAT THE INCIDENT GIVING RISE TO THE CLAIM
 OCCURRED DURING THE PERIOD THE POLICY WAS IN EFFECT;
   (3) PROVIDES EVIDENCE OF FINANCIAL LIABILITY, WHETHER BY COURT  ORDER,
 SETTLEMENT AGREEMENT, OR PAYMENT TO A CLAIMANT; AND
   (4)  CERTIFIES  THAT  NO  OTHER INSURANCE OR INDEMNIFICATION SOURCE IS
 AVAILABLE TO SATISFY THE CLAIM.
   (D) REIMBURSEMENTS UNDER THIS SECTION SHALL  BE  MADE  FROM  AVAILABLE
 ASSETS  OF  THE  INSOLVENT  INSURER'S  ESTATE.  THE SUPERINTENDENT SHALL
 PROMULGATE A FIXED AMOUNT TO BE PAID TO LEAS FROM THESE ASSETS. APPLICA-
 TIONS MAY BE SUBMITTED PRIOR TO A FINAL JUDGMENT AND SHALL  INCLUDE  ALL
 SUPPORTING DOCUMENTATION REQUIRED BY THE BUREAU.
   (E)  IN  THE  EVENT THAT ASSETS FROM THE INSOLVENT ESTATE ARE INSUFFI-
 CIENT, THE SUPERINTENDENT SHALL  PROMULGATE  A  SECONDARY  REIMBURSEMENT
 MECHANISM, WHICH MAY INCLUDE BUT NOT BE LIMITED TO:
   (1) RECOVERIES FROM REINSURERS OF THE INSOLVENT INSURER;
   (2) SUBROGATION OR THIRD-PARTY RECOVERIES;
   (3) ANY INTEREST THE BUREAU MAY GENERATE FROM EXISTING FUNDS;
   (4) RESIDUAL BALANCES FROM CLOSED ESTATES; AND
 S. 8174--A                          3
 
   (5)  VOLUNTARY  CONTRIBUTIONS FROM OTHER INSURERS OR INDUSTRY SOURCES,
 TO THE EXTENT PERMITTED BY LAW.
   (F) IN CASES WHERE REIMBURSEMENTS ARE LIMITED, THE BUREAU SHALL PRIOR-
 ITIZE LEAS DEMONSTRATING SIGNIFICANT FINANCIAL HARDSHIP, BASED ON CRITE-
 RIA ESTABLISHED BY THE BUREAU IN CONSULTATION WITH THE EDUCATION DEPART-
 MENT.
   § 3. This act shall take effect on the one hundred twentieth day after
 it shall have become a law.

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Senate Bill S8174A

Sponsored By

Current Bill Status - In Senate Committee Insurance Committee

Actions

Bill Amendments

2025-S8174 - Details

2025-S8174 - Summary

2025-S8174 - Sponsor Memo

2025-S8174 - Bill Text download pdf

co-Sponsors

2025-S8174A (ACTIVE) - Details

2025-S8174A (ACTIVE) - Summary

2025-S8174A (ACTIVE) - Sponsor Memo

2025-S8174A (ACTIVE) - Bill Text download pdf

Comments

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Sponsored By

Monica R. Martinez

Current Bill Status - In Senate Committee Insurance Committee

Actions

Bill Amendments

2025-S8174 - Details

2025-S8174 - Summary

2025-S8174 - Sponsor Memo

2025-S8174 - Bill Text download pdf

co-Sponsors

Mario R. Mattera

Dean Murray

2025-S8174A (ACTIVE) - Details

2025-S8174A (ACTIVE) - Summary

2025-S8174A (ACTIVE) - Sponsor Memo

2025-S8174A (ACTIVE) - Bill Text download pdf

Comments