BILL NUMBER: S7488
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the public authorities law, in relation to statewide
municipal reciprocal program agreements and the issuance of program
bonds
 
PURPOSE:
This legislation authorizes the Municipal Bond Bank Agency to provide a
financing vehicle to a Statewide Municipal Reciprocal Program in an
amount up to seventy-five million dollars for the specific object and
purpose of restoring the Statewide Municipal Reciprocal Program's indus-
try-required surplus.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 2431 of the public authorities law.
Section 2 amends subdivisions 2, 3, and 10 of section 2432 of the public
authorities law.
Section 3 amends subdivisions 3, 11, 18, and 21 of section 2434 of the
public authorities law.
Section 4 adds a new section 2435-f to the public authorities law.
Section 5 amends section 2436 of the public authorities law. Section 6
adds a new section 2436-d to the public authorities law.
Section 7 amends subdivisions 1, 4, and 5 of section 2437 of the public
authorities law.
Section 8 amends section 2438 of the public authorities law.
Section 9 sets forth an immediate effective date.
 
JUSTIFICATION:
The public interest arises from the fact that the New York Schools
Insurance Reciprocal ("NYSIR") is the vehicle through which New York's
public school districts and BOCES insure one another against property
and casualty losses. The state's Education Law and good government prin-
ciples require that public school districts and BOCES maintain property
and casualty insurance. The New York Schools Insurance Reciprocal was
created at a time when property and casualty insurance was either
unavailable or unaffordable for New York's public school districts and
BOCES. The need for NYSIR continues, as the problems of unaffordability
and unavailability continue. NYSIR is critical to the support of public
schools and BOCES across New York State. Access to affordable capital
will enhance NYSIR's ability to fulfill its essential governmental
purpose.
Industry standards require insurance reciprocals to maintain a surplus
for the purposes of managing risk and protecting against unexpected
losses. In recent years it has become untenable to maintain the required
surplus due to the rising costs of claims, in particular claims arising
from sexual abuse. Since the enactment of the Child Victims' Act in
2019, NYSIR has suffered significant financial distress. In fact, NYSIR
has paid more than $150 million in damages for sexual abuse claims since
its inception in 1989, with over $100 million paid out in just the past
five years. As a result of these unforeseen events, NYSIR's surplus has
dropped significantly, and surplus is not something which can be easily
rebuilt just through increases in premiums. The impact of these events,
if left unremedied, is contrary to the public interest of the state and
threatens a decline in the general welfare of the public school system
and the municipalities in which they exist. It is in the public interest
of the state to provide a financing vehicle to NYSIR to remedy the
impacts of these unforeseen events.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S7488: 2431 public authorities law, 2436 public authorities law, 2438 public authorities law, 2438(1) public authorities law