BILL NUMBER: S8200
SPONSOR: SCARCELLA-SPANTON
 
TITLE OF BILL:
An act to amend the insurance law, in relation to enacting the
"construction insurance transparency act of 2025" requiring all insurers
which issue policies of liability insurance insuring against claims made
in reliance upon the duty imposed by the "scaffold law" to file annual
financial statements and detailed claim data with the superintendent of
financial services
 
PURPOSE OR GENERAL IDEA OF BILL:
The bill expands upon current insurance reporting laws by providing for
more detailed reporting requirements of liability insurers' "financial
statements" and "closed claims" data, where those insurers provide
coverage against claims made under Labor Law 240. This data collection
will provide lawmakers with a source of reliable and accessible data
that will better enable them to evaluate liability insurance in this
area and assist in providing an optimal product to New York citizens.
 
SUMMARY OF PROVISIONS:
The proposed language provides for a publicly accessible and neutral
method for the systematic collection of financial and closed claims data
for liability insurance covering claims made under Labor Law 240.
The supplemental financial disclosure requirements stipulate that insur-
ers must provide detailed information concerning all sources of "income
including but not limited to, data on premiums attributable to coverage
for labor law 240 claims and investment income.
Detailed information regarding expenses must also be provided, includ-
ing, expenses actually incurred and paid, normal business expenses sala-
ries, commissions, consulting fees, legal expenses, risk management
program expenses and advertising costs. A synopsis of the total claims
or settlements paid in each financial statement and specific data on
claims that have been settled with or without payment (closed claims)
must also be provided.
Additionally, all submitted data must be signed by the insurer's chief
executive officer, attesting its' accuracy. Civil penalties will be
assessed against companies that fail to comply with any of the
provisions of the bill. Finally, the Department of Financial Services
must make all information publicly available on the department's
website.
 
JUSTIFICATION:
For participants in the construction industry liability insurance plays
a vital role providing financial security for all parties in the event
of an accident. Liability insurance is often required for contractors or
property owners to obtain necessary permits or to take on many projects,
without liability insurance, participation in this sector of the econo-
my. can be impeded. Given the critical role of the construction industry
in the State economy, the State has a vested interest in ensuring trans-
parency to ensure that the premiums paid for liability insurance are
established. Given perennial calls for reform that would weaken Labor
Law 240-a long-standing and successful worker safety law - based on
that. Laws alleged impact on insurance costs; it is particularly impor-
tant that insurance covering Labor Law 240 claims is given scrutiny.
The determination of premiums for such liability-insurance policies in
New York has gone on too long in obscurity. No independent and neutral
mechanism exists to determine why premium rates are set where they are.
And, because insurers routinely refuse requests to produce more detailed
data, lawmakers, workers, and the public must rely on industry reports
to make policy decisions.
As a matter of public trust, liability insurers should be required to
make policyholders and the public aware of the facts related to premium
determinations and financial solvency in this area. Furthermore, inde-
pendent, objective, and accurate data is needed so lawmakers and the
public can conduct sound analyses in reaching public policy decisions
that impact tens of thousands of New Yorkers working in the construction
industry. More detailed claim data would help in evaluating the insur-
ance industry claims that worker safety laws are responsible for driving
up insurance premiums paid by property owners and contractors, in the
absence of this basic data, it is impossible for lawmakers and consumers
to engage in rational decision-making about insurance industry proposals
that would severely limit workers' rights.
 
PRIOR LEGISLATIVE HISTORY:
2023-24: A332 Referred to Insurance.
2021-22: A1176 Referred to Insurance.
2019-20: A5980-Referred to Insurance.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None
 
EFFECTIVE DATE:
The first day of January next succeeding the date upon which the bill.
becomes law.