New York City Insurance Proposals and State Regulatory Considerations

SUMMARY

The Insurance Law Committee (Dan Rabinowitz, Legislative and Regulatory Watch Subcommittee Chair) issued a report commenting on two pending New York City proposals involving insurance. The first is legislation pending in the New York City Council, Int. No. 0685-2026, which would establish an Office of Insurance Accountability (“OIA”) within the New York City Department of Consumer and Worker Protection. As the proposed activities for OIA overlap with ones already conducted by the New York State Department of Financial Services (“DFS”), the Committee suggests that the City Council consider amending the bill to (1) require that OIA coordinate any response to consumer complaints with DFS, and (2) ensure adherence by OIA with the requirements of Article 21 of the New York Insurance Law, which limits certain activities to licensed persons. The second relates to the Mamdani Administration’s proposal to establish a New York City program to reduce the cost of property and liability insurance for affordable housing and rent-stabilized housing. The Committee urges the Administration to examine the market factors that are raising the costs of insurance in the private market and consider factors that might bring down these costs, and also recommends drawing on the expertise and market knowledge available at DFS in constructing and implementing the insurance program.

REPORT

REPORT BY THE INSURANCE LAW COMMITTEE
ON NEW YORK CITY INSURANCE PROPOSALS AND
STATE REGULATORY CONSIDERATIONS

The Insurance Law Committee (the “Committee”) of the New York City Bar Association would like to take this opportunity to comment on two pending New York City proposals involving insurance to highlight some concerns regarding the intersection of the new proposals with the existing state legal framework, which is administered by the New York State Department of Financial Services (“DFS”).

The first is legislation pending in the New York City Council, Int. No. 0685-2026, which would establish an Office of Insurance Accountability (“OIA”) within the New York City Department of Consumer and Worker Protection.[1] The OIA would provide information on types of insurance and issue generalized guidance for consumers on selecting insurance plans; track legal actions alleging deceptive, fraudulent or other unfair practices by insurance companies and alert the public to relevant findings; conduct an annual study and issue reports on the cost of insurance and the factors that contribute to the cost of insurance; provide recommendations relating to stabilizing or lowering insurance costs; and create a unit to assist consumers in resolving insurance-related issues, headed by an insurance accountability advocate.

Many of the proposed activities for OIA are similar to ones already being conducted for the benefit of all residents of New York State by the DFS, the state-level body with statutory authority to regulate the insurance business.

The Committee suggests that the New York City Council consider amending the bill to

i. require that the OIA coordinate any response to any consumer complaint with the DFS and

ii. ensure adherence by OIA with the requirements of Article 21 of the New York Insurance Law, which limits certain activities to licensed persons.

The second concern relates to the Mamdani Administration’s proposal to establish a New York City program to reduce the cost of property and liability insurance for affordable housing and rent-stabilized housing.[2] The Committee notes that the New York City Housing Development Corporation has issued, as an initial step, an Insurance Risk Consultant Request for Proposals (“RFP”) for an actuary or risk consultant that will provide expertise to design the program.[3] At a later date, the New York City Economic Development Corporation is planning to issue a separate request for expression of interest (“RFEI”) for a firm “to help establish a property and liability insurance program that (i) cuts premiums by 20% or more, (ii) is self-supporting with a strong balance sheet, and (iii) can scale to serve a significant share of the affordable and rent-stabilized housing stock over time, but not serve as an insurer of last resort.”[4]

The Committee urges the Administration, in evaluating submissions made in response to the RFP and the RFEI, to examine the market factors that are raising the costs of insurance in the private market and consider factors that might bring down these costs. The Committee also suggests that the Administration should be mindful of activities, such as bearing insurable risks, that constitute “doing an insurance business” or otherwise would require proper state licensing from DFS under New York Insurance Law. Finally, the Committee urges the Administration, in developing this proposal, to draw on the considerable expertise and market knowledge available at DFS and to consult with DFS on the construction and implementation of the insurance program.

Insurance Law Committee
Dan Rabinowitz, Legislative and Regulatory Watch Subcommittee Chair

May 2026