May 3, 2016

Senate Labor Committee passes PIANY bill to eliminate SIF 30-day notice of cancellation rule

Currently, New York state law requires policyholders to provide 30 days’ advance written notice to the New York State Insurance Fund prior to canceling a policy—a requirement that is particularly onerous to New York’s small businesses.

PIANY strongly advocates for legislative action to remove NYSIF’s exemption from regulatory oversight. Legislation that was introduced at the request of PIANY to repeal the requirement for policyholders to provide 30 days’ notice to withdraw from the NYSIF has just been considered and reported by the Senate Labor committee to the full Senate. The bill (S.5250/A.7742), sponsored by Sen. James L. Seward, R-51, and Assemblyman Kenneth P. Zebrowski, D-96, would establish a more-even playing field between the NYSIF and the admitted marketplace for workers’ compensation insurance and to afford businesses the flexibility of being able to move their insurance policies to more competitive products without bearing excessive penalties.

NYSIF is the largest single carrier of workers’ compensation insurance in the state, with more than 40 percent of the market. Businesses with NYSIF policies face retaliatory actions when they want to move their business from the fund to another coverage provider. This legislation would place NYSIF on a more even footing with other insurers providing workers’ compensation insurance by removing the requirement to provide it with 30 days’ advance written notice to cancel their policy because they have found other coverage.