PIANY is championing two key legislative initiatives—Bills S.5320 and S.5327, which would improve the way businesses and brokers interact with the New York State Insurance Fund. These bills would ensure fair compensation for insurance brokers and eliminate unnecessary withdrawal delays for policyholders, creating a more efficient and balanced workers’ compensation system in New York state.
S.5320: Ensuring fair compensation for brokers
For decades, insurance brokers in New York state have played a crucial role in helping businesses secure workers’ compensation coverage. However, when businesses choose the NYSIF for their policies, brokers receive no commission, despite providing the same services they would for private insurance carriers.
How NYSIF currently operates
Established in 1914, the NYSIF is a state-run, self-sustaining workers‘’compensation insurer that competes in the private market while maintaining a mandate to offer the lowest possible premiums. However, it does not currently compensate brokers for placing policies with the fund—unlike other state-backed insurance programs, such as the New York Property Insurance Underwriting Association and the New York Automobile Insurance Plan.
What S.5320 would change
Sponsored by Sen. Jamaal T. Bailey, D-36, S.5320 would authorize and direct the NYSIF to compensate licensed insurance brokers for their work, ensuring they receive commissions similar to what private carriers offer.
Why broker compensation matters
Brokers are trusted advisers who help businesses navigate their workers’ compensation options. They assess coverage needs and ensure compliance, compare NYSIF policies with private carrier options, and manage policy renewals, audits and claims.
Without commissions, brokers are disincentivized from recommending NYSIF policies, even when they may be the best option for businesses. By offering fair compensation, S.5320 would create parity between the NYSIF and private insurers, allowing brokers to continue to provide service to clients without financial disadvantage.
S.5327: Streamlining employer transitions from NYSIF
Currently, businesses that wish to leave the NYSIF for a private workers’ compensation insurer must provide 30 days’ written notice before their policy can be canceled. This requirement creates unnecessary delays—often resulting in overlapping coverage periods or potential gaps that leave businesses financially vulnerable.
How S.5327 would improve the process
Under S.5327, also sponsored by Sen. Bailey, the 30-day notice requirement would be waived as long as the employer provides proof of new workers’ compensation coverage. This means immediate cancellation of the NYSIF policy when the new policy takes effect. That should lead to a reduction in administrative delays that complicate transitions, as well as more flexibility for businesses to choose coverage that suits their needs.
With S.5327, businesses would enjoy a smoother, more efficient transition process, ensuring they remain compliant with workers’ compensation laws without unnecessary waiting periods.
A fairer and more competitive market
Together, S.5320 and S.5327 represent a step toward fairness and efficiency in New York state’s workers’ compensation market.
S.5320 would ensure that brokers are fairly compensated, while S.5327 would remove unnecessary withdrawal barriers to give businesses greater flexibility in choosing the best coverage.
By supporting these bills, PIANY is advocating for policies that benefit both insurance professionals and businesses, fostering a more competitive and balanced workers’ compensation system in New York state.
PIANY’s ongoing commitment to broker advocacy
For more than a decade, PIANY has engaged with the NYSIF through its Producer Advisory Council to address these critical issues affecting brokers. Despite persistent efforts, progress has been slow, and past attempts to secure broker compensation and streamline employer transitions have been unsuccessful.
However, PIANY remains undeterred. The association will continue advocating for these much-needed reforms to ensure that both insurance professionals and businesses benefit from a fairer and more efficient workers’ compensation system in New York state.
What’s next?
Both S.5320 and S.5327 are currently in the Senate Labor Committee, with strong backing from PIANY. Similar legislation has been introduced in past sessions, but it was not enacted.
With continued industry support, this could be the year that the NYSIF finally adopts these equitable reforms.
Get involved
If you want to get involved with PIANY’s legislative and advocacy work, there are many ways to engage with the association:
- Participate in PIANY’s District Office Visit Program;
- Become a member of Agents Advocacy Coalition; and
- Watch your PIA Northeast publications and PIA Northeast’s social-media channels for important New York updates and share them with your followers.
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.
