A09085 Summary:

BILL NO    A09085 

SAME AS    
SAME AS S06493

SPONSOR    Crespo

COSPNSR    Sepulveda, Rodriguez

MLTSPNSR   


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.
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A09085 Actions:

BILL NO    A09085 

01/25/2016 referred to insurance
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A09085 Votes:

There are no votes for this bill in this legislative session.
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A09085 Memo:

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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A09085 Text:



 
                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.
                                                                   LBD03953-03-6

        A. 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.
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