Report on Budget Article VII Legislation by the Insurance Law Committee (A.10008-A / S.9008-A)

SUMMARY

The Insurance Law Committee issued comments on insurance-related issues in the Governor’s budget legislation on Transportation, Economic Development and Environmental Conservation. Specifically, the Committee highlighted several inconsistencies and technical issues which they believe merit reexamination to ensure that the purposes and goals of the legislation are met. Recommendations include clarifying certain ambiguous terms and eliminating redundancies where reporting required under the bill would duplicate reporting requirements already in place.

OUTCOME

Recap of the FY 2027 NYS Budget

REPORT

REPORT ON LEGISLATION BY THE INSURANCE LAW COMMITTEE

A.10008-A / S.9008-A (Budget Article VII Legislation, Transportation, Economic Development and Environmental Conservation) – Parts BB, DD and EE

RECOMMENDATIONS

On behalf of the Insurance Law Committee of the New York City Bar Association, we write regarding several items in the Governor’s proposed FY 2027 NYS Executive Budget Transportation, Economic Development and Environmental Conservation Article VII Legislation. Specifically, we note the following inconsistencies and other technical issues which we respectfully submit should be re-examined to ensure that the purpose and goals of the legislation are met:

Part BB (Requiring explanation of premium increases)

• The reference in proposed New York Insurance Law (NYIL) § 2356(b)(1) to:

“a policy covering a motor vehicle or a policy covering loss of or damage to real property used predominantly for residential purposes”

is inconsistent with the reference to the same types of policies mentioned in new subsection (a) of NYIL § 2356, namely

“a covered policy as defined in paragraph one and in subparagraph (A) of paragraph two of subsection (a) of section three thousand four hundred twenty-five of this chapter”.

The intent here seems to be that these references would be the same and pick up the more specific language in NYIL § 3425 (which limits the scope to policies covering property containing “not more than four dwelling units, other than hotels and motels”), rather than more general language “covering . . . real property used predominantly for residential purposes.”

Part DD (Discounts for various risk mitigants)

• Proposed § 2354(b) added by the bill would require an insurer to report certain information about rate reductions to the Superintendent of Financial Services. This seems redundant insofar as the insurer will already have submitted relevant information about the rate reductions as part of its rate-and-form filings with the Department of Financial Services in order to get the rate reduction approved. Moreover, the Superintendent may always require the insurer to provide additional or more specific information as needed.

Part EE (No-fault reform / limiting non-economic damages)

• In proposed NYIL § 5104(d) added by the bill, the reference to a “covered person” “using or operating an uninsured motor vehicle” is a misnomer insofar as a covered person by definition is (in pertinent part) “. . . any owner, operator or occupant of, a motor vehicle which has in effect [required liability insurance] . . .” (NYIL § 5102(j)). This should be revised so that the reference in new § 5104(d) to “covered person” just reads “person”.
• The bill would limit non-economic damages for any covered person using or operating a motor vehicle while impaired at the time of the accident and convicted of such or using or operating a motor vehicle in the commission of a felony, or immediate flight therefrom, at the time of the accident and has been convicted of such felony. Use or operation of a motor vehicle is far broader than simply referring to what the driver does, and a passenger sitting in the vehicle is “using” the vehicle, as is someone changing a tire or unloading the car trunk. Indeed, a driver may not even be aware of the status of the vehicle’s insurance.  The intent of the bill appears to be to apply only to a driver, elsewhere in the law referred to as the operator, and presumably only when he or she has knowledge of the wrongful conduct.
• Section § 5103(b)(2) provides for a permissible exclusion from no-fault for a person impaired or intoxicated, whereas new § 5104(d) only applies to someone impaired.
• Proposed new language added to NYIL § 5104(a) requires that, in any action to determine non-economic loss, the trier of fact shall not determine whether an injury is a “serious injury” until the trier of fact has determined the party at fault. Requiring a court to determine fault first seems inefficient. In cases where there is no “serious injury”, an effort to determine fault would be a waste of time since there would be no cause of action regardless of fault. It would be a better use of judicial resources to determine “serious injury” first and then move on to fault.

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We appreciate the opportunity to comment on the Executive Budget and are available to discuss these comments further if that would be helpful.

Insurance Law Committee
Legislative & Regulatory Watch Subcommittee
Dan Rabinowitz, Chair
Paul Zuckerman, Member

March 2026