BILL NUMBER: S8583C
SPONSOR: KAVANAGH
 
PURPOSE OR GENERAL IDEA OF BILL:
To require property and casualty insurance companies to submit certain
zip code-level data to the department of financial services, to author-
ize premium discounts for policyholders who demonstrate certain miti-
gation actions, to amend cancellation and nonrenewal notice require-
ments, and to increase membership and reporting requirements of the
board governing the New York Property Insurance Underwriting Associ-
ation.
 
SUMMARY OF PROVISIONS:
Section one of the bill amends the insurance law by adding new section
4122 which requires every property/casualty insurer to submit zip code-
level information to the department of financial services, including
nonrenewal rates, cancellation rates, claim frequency and amounts, loss
ratios and premium rates.
Section two of the bill amends the insurance law by adding a new section
to 2346-b.
Subdivision (a) of section two establishes definitions for "community-
level mitigation action" and "property-specific mitigation action."
Subdivision (b) of section two 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. Insurers must spec-
ify the nature and total percentage amount of each discount applied on
the policy declarations page, and annually report to the superintendent
a list of all discounts offered, the discount percentages, and the
number of insureds receiving a discount.
Subdivision (c) of section two authorizes policyholders and applicants
to appeal inaccurate mitigation discounts directly to the insurer.
Section three of the bill amends section 2346 of the insurance law to
require insurers to offer discounted premium rates to homeowners and
commercial property owners who make improvements to their property that
contribute to the safety and security of the insured structures.
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 nine-
ty 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 ninety 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.
This bill requires comprehensive zip-code-level reporting on key market
metrics including non-renewal rates, claim frequencies, and average
premiums. By codifying these requirements into state law, this enables
DFS to monitor market health, identify emerging risk, and provide
consumers with information on their local insurance landscape.
This bill recognizes that mitigation is crucial, as disaster prepared-
ness not only safeguards lives and property but also supports the finan-
cial solvency of New York's property and casualty insurers. In 2024,
DFS encouraged insurers to offer loss mitigation tools and actuarially
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 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 ninety 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
S8583B: 3426 insurance law, 3426(c) insurance law, 5402 insurance law, 5402(b) insurance law, 5402(g) insurance law
S8583C: 3426 insurance law, 3426(c) insurance law, 5402 insurance law, 5402(b) insurance law, 5402(g) insurance law