N.Y.: DFS issues guidance on cannabis-related criminal convictions and underwriting

November 30, 2022

The New York State Department of Financial Services issued a circular letter last week to provide guidance to the insurance industry on cannabis-related criminal convictions and insurance underwriting.

Under New York state law, it is illegal for any person or entity to take any adverse action against individuals who may have been arrested or convicted of crimes in the past but had those crimes expunged from their record. In the circular letter, the department addresses how that existing law against discrimination applies to cannabis-related convictions considering the legalization of cannabis in the state in 2021.

An unlawful discriminatory practice

The guidance provided in the circular letter is clear: The department considers it to be an unlawful discriminatory practice to inquire about or act adversely based upon any arrest or conviction related to an expunged cannabis-related criminal conviction.

Under this guidance, insurers will be prohibited from denying an application for insurance, making a distinction in premiums or rates, making a distinction in the terms and conditions of insurance, or otherwise taking adverse underwriting actions based on a cannabis arrest or conviction.

What this means to agents

While this guidance is most relevant to insurance companies, the law applies to insurance agents as well.

Agents are encouraged to review their internal procedures and controls to ensure that they do not inquire about or act adversely based upon expunged cannabis-related convictions.

Bradford J. Lachut, Esq.
PIA Northeast

Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.

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