Last week, the New York state Senate passed legislation that would direct the New York State Department of Financial Services to—in part—study the possibility of supporting a private flood insurance market.
The bill (S.8167), sponsored by Sen. Neil Breslin, D-46, would tackle the increasing challenges faced by property owners in New York state concerning insurance premiums and flood loss coverage. The primary objective of this legislation would be to conduct a detailed study through the DFS, focusing on the reasons behind rising property insurance costs, the scarcity of insurance options for flood damage, and the potential establishment of a private flood insurance market to supplement the existing National Flood Insurance Program.
The study commissioned by the bill would be tasked with several key goals:
Identifying causes of premium increases: It would assess the factors contributing to the surge in property insurance premiums to understand the affordability crisis impacting property insurance.
Examining flood loss coverage gaps: The lack of available property insurance coverage for flood losses in the state is a significant concern—especially with the increasing prevalence of flooding events. The study would aim to uncover the reasons behind these coverage gaps.
Exploring a private flood insurance market: There’s an interest in evaluating the feasibility of a private market for flood insurance as a complement to the NFIP, potentially offering more flexible and affordable coverage options for New Yorkers.
The study’s specific objectives would include analyzing the reasons for increased property insurance costs due to flood losses, forecasting the impact of these trends over the next decade, and assessing the viability of a private flood insurance market in New York state.
Upon completion, the DFS would be required to prepare a report containing its findings from the study, to offer recommendations for legislative and regulatory actions to address the issues identified, and to outline considerations on the feasibility of supporting a private flood insurance market in the state.
The bill would take effect immediately upon its passage, underlining the urgency of addressing the issues of rising insurance costs, affordability, and the lack of flood coverage.
Bradford J. Lachut, Esq.
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.
