BILL NUMBER: S8583A
SPONSOR: KAVANAGH
 
TITLE OF BILL:
An act to amend the insurance law, in relation to requiring
property/casualty insurance companies to submit certain zip code-level
data, market share data, and information about models and scoring meth-
ods used for catastrophes to the department of financial services; to
amend the insurance law, in relation to requiring an annual report on
the housing insurance market for multifamily and nonprofit housing
providers; to amend the insurance law, in relation to authorizing a
premium discount to policyholders who demonstrate certain mitigation
actions; to amend the insurance law, in relation to the timing of
cancellation and nonrenewal notices for certain insurance policies;
and to amend the insurance law, in relation to increasing membership of
the board governing the New York property insurance underwriting associ-
ation and to requiring a quadrennial report on the activities of such
association
 
PURPOSE OR GENERAL IDEA OF BILL:
To require some property and casualty insurance companies to submit
specific information about their policyholder retention, catastrophe and
risk modeling, information regarding mitigation discounts.
 
SUMMARY OF PROVISIONS:
Section one of the bill amends the insurance law by adding new section
4122.
Subdivision (a) of section one establishes definitions for "catastrophe
model," "community-level mitigation action," "property-specific miti-
gation action," "natural disaster risk model," and "natural disaster."
Subdivision (b) of section one requires every property/casualty insurer
to submit: (1) zip code-level information to the department of financial
services, including nonrenewal rates, cancellation rates, claim frequen-
cy and amounts, loss ratios and premium rates; (2) market share data;
and (3) if utilized, information about natural disaster risk models,
catastrophe models, or scoring methods, including descriptions, rate
impacts, actuarial justifications for rating factors including miti-
gation discount, and explanations of their use in underwriting deci-
sions. Models and methods submitted are treated as trade secrets under
public officers law. Insurers using such models must ensure that proper-
ty-specific and community-level mitigation actions are either incorpo-
rated in their models or otherwise demonstrably included in underwriting
and pricing, and must include this information in rate filings.
Subdivision (c) of section one requires the department to create and
maintain a public-facing database where policyholders can access market
share data submitted by insurers.
Section two of the bill amends the insurance law by adding new section
3463.
Subdivision (a) of section two establishes definitions for "multifamily
residential building," "nonprofit housing provider," "affordable housing
development," "excess line insurance," and "insurer."
Subdivision (b) of section two requires the superintendent of the
department of financial services (DFS) and the commissioner of homes and
community renewal (HCR) to submit an annual joint report by October 1st
of each year to the Governor and the Legislature and post it online. The
report shall analyze availability, pricing, terms, and affordability of
property and liability insurance for multifamily residential buildings
owned or operated by nonprofit and mission-driven entities, including
affordable developments. The report must include statewide and regional
results, with New York City results reported separately.
Subdivision (c) of section two specifies required report contents,
including aggregated statistics on: premium levels and changes per unit
and square foot; coverage availability and market channel, including
nonrenewals, declinations, excess-line placements, and use of New York
Property Insurance Underwriting Association (NYPIUA) as the state's
provider of insurance of last resort; deductibles by peril; exclusions
and limitations; coverage limits relative to replacement cost; claims
frequency and severity; affordability impacts in HCR portfolios; risk-
mitigation credits and resiliency investments; and regional heat-map
summaries of market stress.
Subdivision (d) of section two authorizes the DFS superintendent to
require special reports under section 308 and consolidate data calls.
It protects trade secrets and sensitive commercial information as confi-
dential under public officers law, and directs the department to consult
with excess line and NYPIUA on reporting formats.
Subdivision (e) of section two grants authority to implement the
section, harmonize data standards, limit burdens on small insurers, and
ensure data quality.
Subdivision (f) of section two provides that no private right of action
is created.
Section three of the bill amends the insurance law by adding a new
section to 2346-b.
Subdivision (a) of section three establishes definitions for "communi-
ty-level mitigation action," "natural disaster," "natural disaster risk
model," and "property-specific mitigation action."
Subdivision (b) of section three requires the DFS superintendent to
provide actuarially appropriate premium reductions for policyholders who
demonstrate property-specific or community-level mitigation actions and
to establish by regulation a process for demonstrating such actions.
Insurers must post accessible information identifying mitigation actions
that could result in discounts and discount amounts.
Subdivision (c) of section three requires insurers that provide miti-
gation discounts or use natural disaster risk models must provide annual
written notices to policyholders and applicants containing: plain-lan-
guage explanations of risk scores and classifications; the range of
possible scores; the property's relative position within that range;
explanations of why the score was assigned, identifying primary property
features; and the impact that mitigation measures could have on the
score.
Subdivision (d) of section three authorizes policyholders and applicants
to appeal inaccurate risk scores, classifications, or mitigation
discounts directly to the insurer.
Section four of the bill amends section 2305(b) of the insurance law to
require prior approval of the DFS superintendent for rates that incorpo-
rate property-specific and community-level mitigation actions in their
calculation.
Section five of the bill amends paragraphs 1 and 2 of subsection (d) of
section 3425 of the insurance law for residential properties consisting
of one to four units to require insurance providers to give notice sixty
to one-hundred twenty days prior to the effective date when a policy is
being cancelled or not renewed. The notice must include a statutorily
stated reason for the cancellation or nonrenewal. It requires sixty day
notice to a policyholder when an insurance provider has reason to cancel
but is conditioning cancellation on changes to the plan.
Section six of the bill amends section 3426 of the insurance law for
residential properties with at least five units by requiring that
cancellation notices sent after the first sixty days of coverage must be
mailed or delivered to policyholders at least ninety days before cancel-
lation takes effect.
Section seven of the bill amends section 3462 by adding a new paragraph
5 to prohibit insurers from discriminating against buildings located in
a disadvantaged community as defined in the environmental conservation
law, and provides that an insurer who cancels, refuses to issue, or
refuses to renew a policy in a disadvantaged community provide actuarial
information to support such action.
Section eight of the bill amends section 5402 of the insurance law by
increasing the number of board appointees to the New York Property
Insurance Underwriting Association (NYPIUA), the entity charged with
providing insurance of last resort in New York state, from thirteen to
twenty-three, adding an additional six directors that shall be appointed
annually by the legislature and four members that shall be appointed by
the Governor.
Section nine of the bill requires NYPIUA to provide a report to the
legislature every four years on the policies that they are writing, on
information including but not limited to geographic location, types of
policies offered, coverage limits of the policies, and financial stand-
ing of the association.
Section ten of the bill sets forth the effective date.
 
JUSTIFICATION:
The proprietary nature of insurers' rate-setting models creates a
significant transparency gap for consumers and regulators alike. This
gap has produced particularly severe consequences for affordable and
nonprofit multifamily housing providers in New York, who face sharp
increases in insurance premiums, shrinking coverage, and rising deduct-
ibles that threaten long-term affordability. A New York Housing Confer-
ence survey covering more than 130,000 units found average annual premi-
ums reached $1,770 per unit in 2023, up 103% from $869 in 2017. Owners
also reported liability limits reduced while premiums doubled and
instances of coverage declinations tied to affordable housing status or
location. In 2024, the Department of Financial Services issued guidance
prohibiting discrimination against affordable housing in underwriting,
underscoring the need for transparent market data to monitor compliance.
This bill aims to address this gap through a three-part framework that
protects insurers' proprietary modeling while creating a more informed
and functional insurance marketplace.
First, this bill requires comprehensive zip-code-level reporting on key
market metrics including non-renewal rates, claim frequencies, average
premiums, market share data, and insurance modeling methodologies. By
codifying these requirements into state law and making market share data
public accessible, this enables DFS to monitor market health, identify
emerging risk, and provide consumers with information on their local
insurance landscape.
Second, this bill establishes annual reporting specifically focused on
the multifamily and nonprofit housing sector. The joint DFS-DHCR report
would provide aggregated statistics on premium levels, coverage avail-
ability, deductibles, exclusions, claims data, and affordability impacts
across the state, with separate reporting for New York City. It author-
izes DFS to require special reports and consolidate data cells, while
protecting sensitive commercial information under the public officers
law.
Third, this bill recognizes that mitigation is crucial, as disaster
preparedness not only safeguards lives and property but also supports
the financial solvency of New York's property and casualty insurers. In
2024, DFS encouraged insurers to offer loss mitigation tools and actuar-
ially sound premium reductions tied to protective measures. This bill
mandates that insurers publicly disclose detailed information about
available discounts for mitigation efforts, similar to the National
Flood Insurance Program's "mitigation tool" that provides personalized
discount information based on property characteristics. Beyond public
disclosure of available discounts, the bill requires insurers using
natural disaster risk models to provide annual notices to policyholders
and applicants in plain language, and ensures policyholders have access
to relevant data throughout their policy's lifecycle.
Beyond improving data transparency, this bill addresses procedural gaps
in the cancellation and nonrenewal process. Current notice requirements
can sometimes not leave property owners with sufficient time to under-
stand changes to their coverage or seek alternatives. This bill would
extend notice periods to sixty to one hundred and twenty days and
requires clear explanations for cancellations and nonrenewals, prevent-
ing coverage gaps and ensuring policyholders can make informed deci-
sions.
The bill also addresses geographic discrimination by prohibiting insur-
ers from discriminating against buildings located in disadvantaged
communities as defined in environmental conservation law. Insurers who
cancel, refuse to issue, or refuse to renew policies in these communi-
ties must provide actuarial justification for such decisions, creating
accountability and ensuring that those already facing environmental and
economic challenges are not further burdened by discriminatory insurance
practices.
As climate change and market pressures drive more New Yorkers toward the
state's insurer of last report, governance of the New York Property
Insurance Underwriting Association (NYPIUA) requires enhanced oversight.
The FAIR plan currently holds 20,669 residential policies and 1,556
commercial policies, representing $7.6 billion in exposure. As adverse
selection concentrates higher-risk properties onto the FAIR plan, the
potential for catastrophic losses grows. This bill strengthens gover-
nance by expanding the NYPIUA board from thirteen to twenty-three
members, with six appointed by the legislature and four by the Governor,
and requires reporting every four years on the policies written,
geographic distribution, coverage limits, and financial standing. While
FAIR board members are intended to represent public interests, ten of
thirteen current members come from the insurance industry. This bill
brings New York in line with neighboring states like New Jersey and
Massachusetts.
Together, these provisions create a comprehensive framework for trans-
parency, consumer protection, and market stability. By establishing
robust data collection, extending consumer notice periods, mandating
mitigation incentives, prohibiting geographic discrimination, and
strengthening FAIR plan governance, this legislation responds to current
market dysfunction while positioning New York to adapt to evolving
insurance challenges. The bill protects insurers' proprietary informa-
tion while ensuring regulators, policymakers, and consumers have the
information necessary to maintain a functional and equitable insurance
marketplace.
 
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law. Effective immediately, the addition, amendment
and/or repeal of any rule or regulation necessary for the implementation
of this act on its effective date are authorized to be made and
completed on or before such effective date.

Statutes affected:
S8583: 3426 insurance law, 3426(c) insurance law, 5402 insurance law, 5402(b) insurance law, 5402(g) insurance law
S8583A: 3426 insurance law, 3426(c) insurance law, 5402 insurance law, 5402(b) insurance law, 5402(g) insurance law