N.Y.: How the photo inspection bill in the state budget differs from the vetoed bill

William Shakespeare once wrote “What’s in a name? That which we call a rose by any other name would smell as sweet …”.

I can only assume that when Shakespeare wrote those words in the 1590s that he was thinking about the future, and specifically about a measure included Gov. Kathy Hochul’s budget that would reform New York state’s outdated photo inspection system by making it optional.

But wait! You may be thinking, “Didn’t the governor veto a photo inspection bill last session? Why would she include photo inspection in her budget?”

Yes, the governor did veto the bill last session. However, following that disappointing result, PIA, as well as others in the industry, worked tirelessly to convince the governor of the merits of the issue. The governor listened and included a photo inspection proposal in the Transportation, Economic Development and Environmental Conservation section of the Executive Budget.

But, the photo inspection legislation in the TED is not exactly like the legislation that was vetoed last year.

So, how does this year’s version of photo inspection differ from the bill PIA supported during the 2021-22 legislative session. Let’s discuss. Don’t worry I won’t use iambic pentameter. [EDITOR’S NOTE: Such the pity, it’s a lost art.]

The bills

Last year’s bill (aka A.6877/S.6028 2021-2022 legislation session). The bill would have amended New York Insurance Law Section 3411, which is the original law that created the photo inspection system. Specially, it would have made changes to section 3411(m)(1), which—as everyone knows—provides for circumstances in which photo inspections can be dispensed with by insurance companies.

These circumstances include: when insuring a new automobile or if the inspection would create a hardship, among others circumstances. Last year’s bill would have ditched the list of circumstances for a more straightforward exclusion that would have allowed insurance companies to dispense or defer inspections for any reason.

The TED (A.3008/S.4008) bill. The TED bill also amends Section 3411, which makes sense. However, it impacts a different subsection, specifically 3411(d). That section of the law states that a newly issued policy cannot provide physical damage coverage until a photo inspection of the vehicle has been performed. The TED bill would add additional language to that section stating that photo inspections would not be required if the insurer waived the right to such an inspection by the filing of a statement of operation with the New York State Department of Financial Services.

What’s the same?

Last year’s bill and the TED bill are spiritually the same. Both would reform the current photo inspection system by allowing a mechanism for insurance companies to make the requirement optional.

So, what’s different between the two?

The difference between the two bills is how insurance companies would about go effectuating the waiver.

Last year’s bill is vague on the particulars of how an insurance company would have waived photo inspections, stating only that insurers can waive or defer an inspection. There is no clear indication how that waiver is completed though. Presumably if that bill would have become law, the DFS would have issued regulations regarding the waiver process.

The TED bill provides a much clearer process by which insurers can defer inspections. As mentioned above, the TED bill would require insurance companies to file a statement of operation waiving the inspections.  It also states explicitly that the statements would be effective upon filing and that insurers would be permitted to specify, which vehicles they are waiving the inspection requirement.

Perhaps a more important difference between the two is that the TED bill contains a sunset clause. A sunset clause is a provision in a bill that states the law will terminate automatically at a certain date in the future. In the case of the TED bill, insurers would be able waive or defer inspections until Oct. 1, 2027. At that time, the law would be repealed unless the Legislature was to act before to extend the effective date of the law.

There you have it. The two photo inspections bill are not exact copies. Instead, they take different paths but to the same end. What’s in a bill number?

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.