Issue Primer & Resources
Certificates of Insurance
Effective July 28, 2015 a new section of the NY Insurance Law prohibits a government agency or person in New York State from willfully requiring in a certificate of insurance the inclusion of terms, conditions or language of any kind, including warranties or guarantees unless the insurance policy expressly provides the terms, conditions or language. Any person or government agency that wants to use a certificate form other than a form promulgated by the insurer issuing the policy, must obtain the Superintendent's approval prior to using the form.
Certificate of Insurance Resources
Transportation Network Companies (TNCs)
Transportation network companies are organizations that arrange transportation for a fee using a technology platform such as a mobile app or website. The most widely used TNCs are Uber, Lyft and Sidecar. Regulation of TNCs is still in its infancy and varies from state to state and sometimes from city to city. The insurance issues that arise come from TNC drivers using their personal vehicle. Traditional ride-sharing, also known as carpooling, is covered by most personal auto policies (PAPs). But transporting passengers for a fee that exceeds the simple sharing of expenses is excluded in most PAPs.
In 2015 the insurance industry reached an agreement with Uber on compromise model legislation. Legislation was introduced in New York; however no action was taken before the end of session in June 2015. Also in June, Lyft agreed to a consent order with New York's Attorney General and the Department of Financial Services resolving an action filed against Lyft in July 2014 for alleged violations of state and municipal laws. TNCs will likely be a top priority when the Legislature reconvenes in January 2016.
TNC Resources
Insurance Impact on the New York Economy
The insurance industry in New York State has a significant impact on the state's economy that extends well beyond its responsibilities to collect premiums and settle claims. The industry employs licensed professionals, pays taxes, owns municipal bonds and serves people in their greatest time of need.
In 2012 NY First contracted with Goss & Associates and Ernest Goss, PhD to undertake a ground-breaking study that examines the contributions of the property-casualty industry to the state. The property-casualty industry creates jobs, investments, self-employment income and savings, among other benefits. Dr. Goss is a leading researcher using input-output modifiers to model economic impact. The 2012-16 study also looks at the impact on the state's economy by individual legislative district.
The report will be updated every two years and the 2014-18 report will be released in 2015. Check back soon for an update.
Insurance Impact on the New York Economy Resources
Cyber Security & Cyber Liability
The risks of cyber liability are growing rapidly. Frequent news reports about computer hacks against large companies highlight the vulnerability of businesses large and small. Insurance products to protect against identify theft, loss or corruption of data and business interruption are being introduced into the marketplace and will evolve as demand increases.
Cyber Liability Resources
Auto No Fault Reform
Auto insurance fraud costs New Yorkers hundreds of millions of dollars. Fraud and lawsuit abuse by medical providers are the main reasons for the higher costs consumers pay. This problem will not be solved without comprehensive no fault reform through legislative action.
Auto Fraud Resources
Insurance Fraud
Insurance fraud takes many forms. Inflating damages from a car accident to extending a legitimate workers' compensation claim are both insurance fraud. Companies who misrepresent the work hazards face by their employees are also committing insurance fraud as well as unscrupulous healthcare providers who excessively bill or bill for treatments not rendered. Insurance fraud costs Americans at least $80 billion a year, according to the Coalition Against Insurance Fraud. Insurance fraud inflates the cost all consumers pay for their insurance. That is just the beginning. Insurance fraud also pushes up the cost of everything you buy and use. For example, fraud in the workers' compensation system adds to the cost of coverage. According to a recent Business Council of NY survey of New York employers, more than a third of respondents said workers' compensation costs are encouraging them to consider relocating their businesses outside the state. When businesses move and new businesses cannot afford to take their place, people lose jobs, the tax base erodes, and neighborhoods and schools become run down. This makes insurance fraud everyone's business.
Insurance Fraud Resources
Producer Compensation Disclosure
Regulation 194 is an outgrowth of the 2004 investigations into the activities of mega-brokers Aon, Willis and March initiated by then-Attorney General Eliot Spitzer. As a result , the brokers named in the original investigation agreed as part of their settlement agreements to make their compensation transparent by disclosing to their customers the amount of commission and other compensation they receive. Once the settlement agreements were made the Insurance Department (now the Department of Financial Services or DFS) decided that this type of disclosure should be required for all insurance producers. The DFS held joint public hearings with the Attorney General's office in the summer of 2008 to solicit comments from the industry and then spent about a year drafting a regulation that went into effect January 1, 2011. The regulation was challenged by the producer community; however in 2012 the Court found in favor of the DFS and the regulation stands as written.
Producer Compensation Disclosure Resources
Coastal Markets
Coastal resident in New York State in close proximity to the water have been subjected to non-renewal of their homowners inurance coverage and large non-standard windstorm deductibles by insurers attempting to mitigate their exposure to hurricanes. The Department of Financial Services (DFS) proposed rules that would address both of these issues along with measures to alleviate market disruption. The DFS also maintains on its website a list of approved windstorm & hurricane deductibles in New York.
Coastal Markets Resources
Health Care Reform
The Patient Protection & Affordable Care Act and Education Reconciliation Act was signed into law in 2010. New York opted to create a state-based exchange. New York State of Health launched in 2013.
Health Care Reform Resources
Long Term Care Insurance
According to the Health Insurance Association of America, the average cost of a nursing home exceeds $50,000 a year nationwide. An extended stay can quickly eat up retirement income and a lifetime of savings. However, purchasing long term care insurance can protect an individual's investments and ensure that the individual will be taken care of in the event he or she needs extended care.
Long term care can mean many different things but any chronic or disabling condition that requires nursing care or constant supervision can bring on the need for long term care services. Long term care means not only care in a nursing home, it can also mean nursing care in your own home and help with the activities of daily living. There are many different services that fall under the definition of long term care, including institutional care such as a nursing facility or non-institutional care such as home health care.
Long Term Care Resources
Credit Scoring
The computerization of data has brought more accuracy, speed and efficiency to businesses of all kinds. In the insurance arena, credit information has been used for decades to help underwriters decide whether to accept or reject applications for insurance. New advances in technology have led to the development of insurance scores that enable insurers to better assess the risk of future claims.
Credit Scoring Resources
Tort Reform
The high cost of the U.S. tort system makes products more expensive for all Americans and inhibits investments that can create jobs. It is not just an insurance industry problem, it is a national economic problem.
Many in the insurance industry support the work of the Lawsuit Reform Alliance of New York (LRANY). LRANY is a nonpartisan non-profit coalition of New York business leaders, professionals, taxpayers and citizens committed to changing our burdensome and expensive legal system to help create more jobs and energize the state's economy.
Tort Reform Resources
Reinsurance
Described as the "insurance of insurance companies", reinsurance provides reimbursement to the ceding insurer for losses covered by the reinsurance agreement. The fundamental objective of insurance, to spread the risk so no single entity finds itself saddled with a financial burden beyond its ability to pay, is enhanced by reinsurance.
Insurers purchase reinsurance for essentially four reasons: 1) to limit liability on specific risks, 2) to stabilize loss experience, 3) to protect against catastrophes and 4) to increase capacity. Depending on the ceding company's goals, different types of reinsurance contracts are available to bring about the desired results.
Reinsurance Resources