Apr 20, 2018

New state law provides conditional renewal notices to WC policyholders

Under New York Insurance Law Section 3426(e), commercial policyholders are entitled to receive a conditional renewal notice 60 to 120 days in advance of the expiration date of their policy, if the premium for their renewal policy will increase by more than 10 percent. The law requiring such notices protects the customer by affording the opportunity to look for alternative coverage before their current policy expires. Unfortunately, workers’ compensation policies are not governed by this section of the Insurance Law.

To address this oversight in the Workers’ Compensation Law, bills A.8932/S.7283 were introduced earlier this year by Assemblyman Andrew D. Hevesi, D-28, and Sen. Joseph E. Robach, R-56, respectively. These bills were delivered to Gov. Andrew M. Cuomo on April 6, who signed the bills into law on April 18, 2018.

The new Workers’ Compensation Law, which is effective immediately, provides policyholders 30 days’ advance notice when their premium will increase by more than 10 percent (either upon renewal or when the policy is being renewed by another affiliated insurer that is under common control with the insurer that wrote the expiring policy). This change to the law will give policyholders the opportunity to look for alternative coverage that may be more affordable to them.

Under the law, the 10-percent premium threshold shall be exclusive of any premium increase generated as a result of increased loss costs filed by the New York Compensation Insurance Rating Board; increased exposure units; as a result of experience rating; the contractor credit adjustment program; merit rating; retrospective rating; audit; the removal or reduction of a drug-free credit; a managed-care credit; or a deductible. The NYCIRB has amended its New York Workers’ Compensation and Employers’ Liability Manual to reflect these changes. For more information, see the NYCIRB’s Bulletin 2462.