N.Y. Legislature passes owner-controlled insurance bill

June 12, 2024

Recently, the New York state Senate passed A.10362B/S.9327 which, if signed into law, would amend the Insurance Law concerning the authorization and regulation of owner-controlled and contractor-controlled insurance programs. This bill, introduced by Sen. Sean Ryan, D-61, focuses on public construction projects and expands upon the stipulations set forth in the laws of 2023.  For insurance agents, this legislative change would represent challenges and opportunities in public-sector construction projects. 

Key provisions of the bill 

The primary focus of S.9327 would be to amend the Insurance Law, specifically targeting the use of owner-controlled insurance programs and contractor-controlled insurance programs in public construction projects. Here are some notable elements of the bill: 

Expanded authorization. The bill would broaden the entities eligible to use OCIPs and CCIPs, including public corporations, municipalities and public authorities engaged in significant construction projects (e.g., electrical generating facilities and transportation infrastructure). 

Contractual requirements. For contracts exceeding $5 million, the bill would mandate the use of project labor agreements. This inclusion would standardize labor practices and ensure safety and efficiency in large-scale projects. 

Annual reporting. A comprehensive annual report would be required to be submitted. This report would detail project descriptions, procurement processes, savings from insurance programs, dispute resolutions and the participation of minority- and women-owned businesses. 

Implications for insurance agents 

The passage of S.9327 would bring several implications for insurance agents operating in New York state. With the expansion of OCIPs and CCIPs, insurance agents would likely see a rise in demand for specialized services tailored to these programs. Agents would need to understand complex coverage needs. Projects under OCIPs and CCIPs have unique risk profiles and coverage requirements. Agents must be well-versed in these nuances to offer relevant insurance products.  

The bill’s emphasis on large public construction projects opens new opportunities for insurance agents to tap into the public-sector market. Key opportunities include creating customized insurance solutions that cater specifically to the needs of public construction projects would set agents apart in this competitive market. 

Agents able to build relationships with municipalities, public authorities and other eligible entities may find long-term contracts and steady business growth. 

The passage of S.9327 would mark a pivotal development in New York state’’ insurance landscape—particularly for those individuals involved in public construction projects.  

If this bill is signed into law, insurance agents would have to adapt to the new regulatory environment, to develop specialized expertise and to seize the growth opportunities presented by the expanding use of OCIPs and CCIPs.  If they do so, they could effectively navigate the challenges and capitalize on the potential for increased business in the public sector.  

The bill now will go to Gov. Kathy Hochul for her consideration. If signed, the bill will go into effect immediately. The state Assembly version of this bill can be read here

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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