Senate Bill S9393

                                 
BILL NUMBER: S9393

SPONSOR: JACKSON
 
TITLE OF BILL:

An act to amend the insurance law, in relation to requiring insurance
carriers to provide access to underwriting models or granular claim data
to the department of financial services

 
PURPOSE:

To require insurers to disclose the actual mathematical formula, coeffi-
cients, and data inputs used to calculate a policyholder's renewal
premium, ensuring consumers can verify the accuracy and fairness of
their renewal pricing.

 
SUMMARY OF PROVISIONS:

Section 1 of this bill Establishes the short title: the "Insurance
Renewal Formula Transparency Act."

Section 2 of this bill sets forth legislative findings emphasizing the
              

need for transparency in insurance renewal pricing and the importance of
allowing policyholders to verify the accuracy of premium calculations.

Section 3 of this bill adds a new § 3114 to the Insurance Law requiring
insurers, at the time of issuing a renewal policy, to provide the actual
mathematical formula, expressed in equation form. All data points used
in calculating the renewal premium, with their numerical values, Coeffi-
cients, weightings, and adjustments applied to each data point.
Surcharges, discounts, and credits applied, with corresponding
values.This section also exempts disclosures where the renewal premium
is zero or decreases, requires disclosures to be in plain language and
in a format accessible to policyholders, directs the Superintendent of
Financial Services to promulgate regulations, including standardized
formats. This section also establishes administrative fines (up to
$10,000) and restitution for non-compliance and creates a private right
of action for policyholders, including attorney's fees.

Section 4 of this bill contains a severability clause.

Section 5 of this bill provides that the act takes effect on the first
January after becoming law and authorizes immediate rulemaking.

 
JUSTIFICATION:

Insurance renewal premiums are often the single largest recurring finan-
cial obligation for New York households after housing and utilities. Yet
policyholders have no meaningful ability to verify how their renewal
premium was calculated.  Insurers routinely rely on opaque, proprietary
formulas that incorporate numerous variables, weightings, and adjust-
ments.  Consumers are told only the final number, not the math behind
it.  This lack of transparency creates three systemic problems. Consum-
ers cannot verify accuracy. Even small data errors like incorrect mile-
age, garaging address, claims history, or credit-based factors can mate-
rially inflate premiums. Without disclosure of the formula and inputs,
policyholders cannot identify or correct these errors.  Insurers face
limited accountability. Renewal pricing can incorporate discretionary
adjustments, surcharges, or weightings that are invisible to the consum-
er and difficult for regulators to audit at scale. Market competition is
weakened. When consumers cannot understand why their premium changed,
they cannot meaningfully compare products or shop for alternatives.The
technology to provide real-time, itemized renewal calculations already
exists. Insurers use these formulas internally and apply them automat-
ically. This bill simply requires that the same information be shared
with the policyholder, except when the renewal premium is zero or
decreases. By requiring disclosure of the actual equation, data points,
coefficients, and adjustments, this bill restores basic financial trans-
parency and empowers consumers to verify the fairness of their renewal
pricing. It also strengthens regulatory oversight and promotes a more
competitive insurance marketplace.

 
LEGISLATIVE HISTORY:

New bill.

 
STATE AND LOCAL FISCAL IMPLICATIONS:

None to the State. Insurers already maintain the formulas and data
inputs required by this bill and use them in automated underwriting
systems. The bill imposes no new actuarial or computational burden.

 
EFFECTIVE DATE:
This act takes effect on the first of January next succeeding the date
on which it becomes law. DFS is authorized to promulgate rules and regu-
lations immediately.