N.Y.: Have you met TED: Part Deux

Back in January, I wrote about the release of the New York Gov. Kathy Hochul’s Executive Budget—in particular, the release of transportation, economic development and environmental conservation items, referred to as the TED.

Fast forward to the end of April and New York state has a signed and approved its budget—finally. Let’s revisit how the items highlighted in the original TED article fared in the finalized budget.

Online insurance verification system

Hochul’s TED proposals included the establishment of an online system for auto insurance verification. The system would enable the sending and receiving of insurance verification requests electronically. When the Senate and Assembly released their own respective budgets, referred to as “One-House” budgets, the Senate had included the measure, but the Assembly had omitted it.

The omission of the issue by the Assembly should not be read as condemnation of the issue itself. Instead, it is a continuation of a long-standing tradition of the Assembly to not include non-budgetary issues in the budget. The system was left out of the final budget, ultimately. 

However, the story doesn’t end there. Both the Assembly and the Senate have introduced legislation that mirrors the original proposal’s goals. Bills S.6534/A.7535 would establish an online system to verify motor vehicle insurance, which would be accessible to law enforcement and integrated with existing state systems. Both bills sit in the Insurance Committee in their respective chambers.

Supplemental spousal liability

Supplemental spousal liability met a fate like the online verification system. Contained in the governor’s budget was a proposal to undo some of the changes to supplemental spousal liability that went into effect in 2023. Under the proposal, SSL coverage would only be added to an individual’s auto insurance policy automatically when individuals indicate (on the insurance application) that they have spouses. For all other individuals, a notice of the availability of SSL coverage would have to be provided at least annually.

This measure was included in the Senate One-House, but not in the Assembly One-House.

Regardless of the fate of SSL in the budget, reforms should be expected this session. 

As PIANY previously reported, legislation virtually identical to the SSL budgetary proposals has been introduced in Assembly and Senate.

Affordable housing discrimination

The last proposal in Hochul’s TED concerned affordable housing discrimination in insurance underwriting and rating. It aimed to prevent insurers from inquiring about the income level or housing subsidies of residents during the insurance application process.

If you have been following along, you can probably guess what happened next. The proposal was included in the Senate One-House, omitted from the Assembly, and left off the final TED budget bill.

Interestingly, the fate of this proposal differed significantly from the previous two proposals. It was incorporated into a different section of the budget known as the Education, Labor, and Family Assistance bill—often less generously dubbed “The Big Ugly” for hosting controversial or non-budgetary proposals.

The proposal that made it into the final version of The Big Ugly is like the proposal in the governor’s TED package. Insurers in the state would be prohibited from using certain criteria related to affordable housing, such as:

• whether a residential building includes affordable dwelling units as mandated by any statute, regulation or agreement with governmental entities, or
• whether the property owners, tenants or shareholders receive rental assistance (e.g., federal housing vouchers).

Insurers also would be prohibited from considering:

• the tenants’ or shareholders’ income level or source of income, or
• the type of ownership (e.g., limited-equity cooperatives, public housing authorities or housing corporations).

This information would not be allowed to be used when:

• making inquiries on insurance applications, or
• deciding on policy issuance, renewal, cancellation or premium adjustments, or
• deciding on coverage exclusions, limitations or reductions.

The proposal was signed into law and went into effect immediately.

Looking ahead

As we review the outcomes of these proposals, it’s clear that the legislative process is both complex and ever changing. While some initiatives from the TED package didn’t make it into the final budget, their progression through separate legislative avenues highlights the ongoing efforts to address and refine state policies.

This underscores the importance of staying informed and engaged with state governance, as these laws and regulations impact both insurance agents and their clients throughout the state directly.

As further developments occur, PIANY will continue to monitor and report on these important issues to keep you updated on how they might affect you and your interests.