Grieving Families Act: Impacts on the insurance industry in New York state

The Grieving Families Act passed both houses of the New York state Legislature in June 2023. It proposes sweeping changes to New York’s wrongful death statute, which has been on the books since 1847. Currently, under the law, compensable damages in wrongful death lawsuits are only limited to economic losses, not emotional losses. Among other things, this bill would permit the families of wrongful death victims to recover compensation for their emotional anguish. While the bill has garnered support for grieving families, the GFA also has faced opposition from Gov. Kathy Hochul, insurers, business groups, and the medical community who are all concerned about the bill’s potential impact on the state’s economy.  

One key concern raised by opponents of the GFA is the potential increase in insurance premiums for the insurance-buying public. According to a recent actuarial study prepared by the New York Civil Justice Institute, if enacted, the GFA could increase liability premiums by $2.2 billion. While auto, and general insurance premiums are estimated to increase by 11% and medical premiums between 40 to 45%. These increases would put a significant strain on businesses, individuals, and families. Another concern raised by GFA opponents is the potential for the bill to be applied retroactively. The 2022 version of the GFA included an unlimited retroactive clause, which would have allowed families to seek damages for accidents that occurred years or even decades ago. This further raised concerns among insurers and business groups that feared that they could be liable for damages related to accidents that occurred way before the GFA was enacted.  

The latest amendments 

To address these specific concerns, the 2023 version of the GFA contains several amendments. First, the bill limits the retroactivity clause to July 1, 2018, which ensures that families can only seek damages for accidents that occurred on or after that date. Second, the bill clarifies who can recover damages by clearly defining a “close family member” as a spouse, domestic partner, issue, foster-children, stepchildren, and step-grandchildren, parents, grandparents, stepparents, step-grandparents, siblings, or any person standing in loco parentis to the descendent. Finally, the bill changes the statute of limitations for when wrongful death lawsuits can be filed from two to three years. 

Despite these amendments, opponents of the GFA still contend that the bill, if enacted will have a costly impact on New York’s economy, as it would likely create a wide range of awards with subjective valuations premised on emotional appeals rather than rational facts and arguments. On the other hand, supporters of the GFA argue that this legislation is a necessary measure of justice for grieving families because emotional damages are an integral component of compensation for families who have experienced a devasting loss. At least 41 other states in the nation have wrongful death laws that compensate family members for emotional loss, and this version of the GFA will make sure that New York state is in lock step with those states to ensure that New York families are appropriately compensated for their losses.  

Implications for the insurance industry 

The Grieving Families Act of 2023 has significant implications for insurance companies operating in New York state. While the GFA’s intention is to provide support and justice for grieving families, insurers hold valid concerns that the GFA could lead to increased litigation and compensation payouts, which will inevitably result in increased insurance premiums for policyholders.  

While the true impact of the GFA remains to be seen, as the 2023 version still is under consideration by the governor, any legislation that affects insurance companies and policyholders must be weighed and carefully considered to ensure that the needs of all parties involved are accounted for.