|SAME AS||SAME AS S06493|
|Amd §2346, Ins L|
|Provides for the reduction of property/casualty insurance premiums on residential real property when the insured occupant completes a homeowner natural disaster preparedness, home safety and loss prevention course.|
|01/25/2016||referred to insurance|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9085 SPONSOR: Crespo
TITLE OF BILL: An act to amend the insurance law, in relation to reduction in rates of property/casualty insurance on residential property for insureds who complete an approved homeowner natural disaster preparedness, home safe- ty and loss prevention course   PURPOSE OF BILL: The purpose of this bill is to provide for an actuarially appropriate reduction in homeowners insurance and insurance that covers property damage for condominiums, cooperative residential units and for renters caused by a catastrophic natural disaster or other insurable events. A residential property owner could obtain such an actuarially appropriate premium reduction upon completion of a natural disaster preparedness, home safety and loss prevention course that is approved by the Super- intendent of the Financial Services Department. The goal of the bill is to raise the awareness of natural disaster preparedness and losses by other insurable events by offering such a course for residential property owners. The ultimate goal being to help reduce the risk exposure faced by property owners from damage caused by a wide spread natural disaster such as a hurricane, ice storm, flood, tornado, or other catastrophic disasters caused by nature or by other insurable events such as fire, theft, burglary, personal injury or prop- erty damage.   SUMMARY OF SPECIFIC PROVISIONS: Section 1: Legislative intent. Section 2: Amends Insurance Law section 2346 to add a new subsection (5) that provides for this actuarially appropriate reduction in homeowners insurance and for others who live in condominiums, cooperates, or are renters. - Provides for a definition of "completion certificate", "natural disas- ter", "homeowner natural disaster preparedness, home safety and loss prevention course", and "applicant" who applies for permission and approval to conduct such a class from the Superintendent. - Authorizes the Superintendent of Financial Services to provide for an actuarially appropriate reduction on residential property insurance premiums for a period of 3 years upon the completion of a homeowner natural disaster preparedness, home safety and loss prevention course. The Superintendent may also provide for an actuarially appropriate reduction in premium rates for the installation of equipment, devices, or other capital improvements that can help to eliminate or mitigate natural disaster damage or losses from other insurable events. - Such coarse, after being submitted for approval to the Superintendent by an applicant, such as a property/casualty insurer or a private entity that conducts such risk management classes, shall provide useful infor- mation related to courses of action that can be taken by a homeowner before, during and after the occurrence of a natural disaster; strate- gies to reduce risk exposure to residential property owners, and infor- mation on the kinds of equipment, devices and other capital improvements made to real property to help reduce the risk of damage to real proper- ty, personal injury or loss of life. The emphasis of the course is to be on reducing the risk of damage from catastrophic events such as natural disasters, but it shall also include information about increasing home safety and other loss prevention techniques. - The insurer would provide for the reduction in insurance premiums upon completion of 'such a natural disaster preparedness, home safety and loss prevention course. A completion certificate would need to be issued by the approved natural disaster preparedness course sponsor, be it the insurer, agent of the insurer or an approved private company that conducts such class and submitted to the insurance carrier. - The Superintendent may establish standards and guidelines to guide course sponsor applicants on the kinds of homeowner natural disaster preparedness, home safety and loss prevention courses that will be approved.   JUSTIFICATION: Over the last decade or so, it seems that more and more catastrophic weather events have struck the Northeastern portions of the United States. The purpose of this bill is to encourage homeowners to take a natural disaster preparedness course to help reduce the risk of property damage, personal injury, and loss of life that can occur as the result of these increasingly catastrophic weather events. In addition, by encouraging residential property owners to take such a class, it is the sponsor's hope to help reduce the economic and personal injuries that occur due to these catastrophic weather events. In addition, such course, to increase the cost savings to consumers and insurance carriers can include items related to home safety and other loss prevention tech- niques. This bill will not adversely affect insurers, in that they would only need to give an actuarially appropriate premium reduction that is demon- strated to reflect real potential property/casualty losses that could be curbed. Further, this is not a mandate bill in that only those insurers that wish to offer the course or sanction such a course provided for by an approved private vendor to provide for such a premium reduction would need to participate in the program. New York State law already provides for an actuarially appropriate reduction on auto insurance rates to those that take a defensive driving course. This bill merely extends this concept of providing for a risk management class and risk aversion class to homeowners' insurance. Also, as is the case with the driver safety auto insurance premium reduction course that is already in state law, such premium reduction is for a three year period of time. Further, pursuant to Insurance Law section 2346, the law already provides for an actuarially appropriate reduction in homeowners insur- ance if such homeowner specifically installs stand alone equipment, including, but only exclusively, a sprinkler system, dead-bolts or hurricane storm shutters or hurricane resistant laminated glass windows or doors. This bill merely adds to this list of equipment that can help to reduce the risk exposure to a natural disaster with addition of a class to reduce potential damages, the same as is now the case for those who take the defensive driving class. In a somewhat similar bill S. 1529 / A. 6846, that passed both houses of the Legislature in 2015, but was vetoed, the sponsors maintain that this concept of a natural disaster preparedness course is not covered under the current law. However, this bill was altered to make it very clear that the bill is making it very clear that this kind of class and premium reduction can be put into effect.   LEGISLATIVE HISTORY: New Bill, but somewhat similar to S. 1529 / A. 6846 that was vetoed in 2015.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: January first, next succeeding when the law shall have gone into effect.
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STATE OF NEW YORK ________________________________________________________________________ 9085 IN ASSEMBLY January 25, 2016 ___________ Introduced by M. of A. CRESPO, SEPULVEDA, RODRIGUEZ -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law, in relation to reduction in rates of property/casualty insurance on residential property for insureds who complete an approved homeowner natural disaster preparedness, home safety and loss prevention course The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative intent. The legislature declares that the 2 purpose of this act is to clearly provide in statute for insurers to 3 offer and for homeowners, condominium owners, cooperative apartment 4 owners, and renters to obtain a financial incentive if they complete a 5 course of instruction on how to make their residence more resilient to a 6 natural disaster, reduce the potential loss of life or property damage 7 that could result from a natural disaster, reduce the risk of fire, 8 theft, burglary, personal injury or property damage, and raise their 9 awareness of natural disaster preparedness by offering property/casualty 10 insurance premium reductions. 11 § 2. The section heading of section 2346 of the insurance law, as 12 amended by chapter 637 of the laws of 1993, is amended and a new 13 subsection 5 is added to read as follows: 14 Reduction in rates of fire insurance [ or], homeowners insurance or 15 property/casualty premiums for residential property. 16 5. (a) Definitions. For the purposes of this subsection, the following 17 terms shall have the following meanings: 18 (1) "Completion certificate" means a document which cannot be altered 19 and which is provided to a person who successfully completes a homeowner 20 natural disaster preparedness, home safety and loss prevention course. 21 (2) "Natural disaster" means the occurrence or imminent threat of 22 widespread catastrophic or severe damage, injury, or loss of life or 23 property resulting from any natural cause including, but not limited to, 24 fire, flood, earthquake, hurricane, tornado, high water, landslide, 25 mudslide, wind, storm, wave action, ice storm, epidemic, air contam- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03953-03-6A. 9085 2 1 ination, blight, drought, infestation, explosion, water contamination, 2 bridge failure, or bridge collapse. 3 (3) "Homeowner natural disaster preparedness, home safety and loss 4 prevention course" means a natural disaster preparedness, home safety 5 and loss prevention course that has been submitted to the superintendent 6 for approval by an applicant, and which has been approved by the super- 7 intendent, pursuant to paragraph (d) of this subsection. Such course 8 shall provide useful information to participants on items including, but 9 not limited to: courses of action that can be taken before, during and 10 after the occurrence of a natural disaster, strategies to reduce risk 11 exposure to insured residential property owners and renters, and infor- 12 mation about the installation of equipment, devices or other capital 13 improvements to real property which can help to eliminate or mitigate 14 damage to real or personal property, personal injury or the loss of life 15 caused by a natural disaster or other insurable event or occurrence of a 16 fire, theft, burglary, personal injury or property damage. 17 (4) "Applicant" means an insurer, or any other person, agency or 18 organization which submits a proposed homeowner natural disaster 19 preparedness, home safety and loss prevention course to the superinten- 20 dent for approval pursuant to paragraph (d) of this subsection, and who 21 or which is prepared and able to offer such course to insureds upon the 22 approval thereof. 23 (b) The superintendent may provide for an actuarially appropriate 24 reduction for a period of three years in rates of homeowner's insurance 25 and property/casualty insurance premiums applicable to residential real 26 property for each triennial completion of a homeowner natural disaster 27 preparedness, home safety and loss prevention course by the insured 28 occupant of such residential real property. In addition, the super- 29 intendent may also provide for actuarially appropriate reductions in 30 such rates for the installation of equipment, devices or other capital 31 improvements to real property which can help to eliminate or mitigate 32 natural disaster damage, improve home safety or prevent other losses. 33 (c) An insurer, upon approval of the superintendent, may upon 34 submission of a completion certificate by an insured, provide an actuar- 35 ially appropriate reduction, for a period of three years, of the premium 36 for such insured's homeowner's insurance or property/casualty insurance 37 on the residential real property which is the insured's place of resi- 38 dence. 39 (d) The superintendent may establish, by rule or otherwise, standards 40 or guidelines to be used by the superintendent for approval of the 41 proposed homeowner natural disaster preparedness, home safety and loss 42 prevention courses. Every such course submitted by an applicant to the 43 superintendent for approval must be reviewed and shall be subject to 44 approval by the superintendent. 45 § 3. This act shall take effect on the first of January next succeed- 46 ing the date on which it shall have become a law; provided, however, 47 that effective immediately, any actions necessary to be taken for the 48 implementation of the provisions of this act on its effective date are 49 authorized and directed to be completed on or before such effective 50 date.