STATE OF NEW YORK
________________________________________________________________________
648
2009-2010 Regular Sessions
IN ASSEMBLY(Prefiled)
January 7, 2009
___________
Introduced by M. of A. KAVANAGH -- read once and referred to the Commit-
tee on Health
AN ACT to amend the public health law and the insurance law, in relation
to enacting the New York toxic mold safety and protection act of 2009
and making an appropriation therefor
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 "the New York toxic mold safety and protection act of 2009".
3 § 2. The public health law is amended by adding a new article 48-A to
4 read as follows:
5 ARTICLE 48-A
6 TOXIC MOLD
7 TITLE I. RESEARCH AND PUBLIC EDUCATION (§§ 4850-4853).
8 II. HOUSING PROVISIONS FOR INDOOR
9 MOLD HAZARD PREVENTION AND DETECTION
10 (§§ 4855-4860).
11 TITLE I
12 RESEARCH AND PUBLIC EDUCATION
13 Section 4850. Definitions.
14 4851. Research and reporting.
15 4852. Standards for preventing, detecting, and remediating
16 indoor mold growth.
17 4853. Public education.
18 § 4850. Definitions. When used in this article:
19 1. "Mold" means any furry growth of minute fungi occurring in moist
20 conditions.
21 2. "Toxic mold" means any indoor mold growth capable of creating
22 toxins that can cause pulmonary, respiratory, neurological or other
23 major illnesses after minimal exposure, as such exposure is defined by
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01200-01-9
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1 the Environmental Protection Agency, Center for Disease Control,
2 National Institute of Health or other federal, state or local agency
3 organized in part to study and/or protect human health.
4 3. "Toxic mold risk assessor" means a person who establishes the level
5 of risk to public health associated with toxic mold.
6 4. "Mold inspection" means an inspection of real property that is
7 designed to discover indoor mold growth, toxic mold growth, conditions
8 that facilitate indoor mold growth and/or indicia of conditions that are
9 likely to facilitate indoor mold growth.
10 § 4851. Research and reporting. 1. The department of environmental
11 conservation and the department shall jointly undertake a comprehensive
12 study of the health effects of indoor mold growth and toxic mold. The
13 results of the aforementioned study shall be submitted to the governor,
14 the temporary president of the senate, the minority leader of the
15 senate, the speaker of the assembly, the minority leader of the assembly
16 and the general public. The study should ascertain among other things:
17 detailed information about harmful and/or toxic strains of mold; methods
18 of detecting harmful and/or toxic mold; potential dangers of prolonged
19 exposure to indoor mold growth; minimum levels of exposure at which
20 indoor mold growth is harmful to human health; and the hazards involved
21 in mold remediation.
22 2. The division of housing and community renewal shall study and
23 report the impact of construction standards on indoor mold growth. Such
24 study shall be submitted to the governor, the temporary president of the
25 senate, the minority leader of the senate, the speaker of the assembly
26 and the minority leader of the assembly.
27 3. All research and study conducted pursuant to this article shall be
28 ongoing with updated reports published as needed to adequately inform
29 the public and protect human health.
30 § 4852. Standards for preventing, detecting, and remediating indoor
31 mold growth. 1. After appropriate research and study as required by
32 this article, but not later than one year after the effective date of
33 this article, the department of environmental conservation, in conjunc-
34 tion with appropriate agencies, shall promulgate rules and regulations
35 that include among other things: standards for mold inspection, mold
36 remediation, testing the toxicity of mold, and the problem of mold reme-
37 diation; standards for certification of mold inspectors, mold remedia-
38 tors, mold testing labs, mold risk assessors and industrial hygienists
39 involved with mold remediation planning; and standards for the design,
40 installation, and maintenance of air ventilation and/or air-conditioning
41 systems to prevent mold growth or creation of conditions that foster
42 mold growth.
43 2. After appropriate research and study as required by this article,
44 but not later than one year after the effective date of this article,
45 the division of housing and community renewal shall promulgate guide-
46 lines identifying conditions created prior to and during construction
47 that facilitate the growth of indoor mold and recommending appropriate
48 means of eliminating those conditions.
49 3. To the maximum extent possible, the standards, guidelines and
50 recommendations established under this section shall be developed with
51 the assistance of organizations involved in establishing national build-
52 ing construction standards and representatives of state or local author-
53 ities responsible for building inspections and issuance of certificates
54 of occupancy.
55 4. The department of environmental conservation and the division of
56 housing and community renewal shall make drafts of their respective
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1 documents available for public review and comment thirty days prior to
2 publication. The department of environmental conservation and the divi-
3 sion of housing and community renewal shall make final model standards
4 and techniques available to the public no later than one year after the
5 effective date of this article.
6 5. The department of environmental conservation shall take such
7 actions as may be necessary to inform appropriate local government agen-
8 cies and authorities of the model standards and techniques with the goal
9 of ensuring that such agencies and authorities adopt such standards and
10 techniques by June first, two thousand ten.
11 6. All standards and guidelines promulgated pursuant to this article
12 shall be updated and published as needed to adequately inform the public
13 and protect human health.
14 § 4853. Public education. 1. The department of environmental conser-
15 vation, the department and the division of housing and community renewal
16 and other relevant agencies shall sponsor public education programs to
17 promote and increase public awareness of the dangers of indoor mold
18 growth or toxic mold.
19 2. The public education programs should include, among other things,
20 information regarding the conditions that facilitate indoor mold growth;
21 guidelines for remediating indoor mold growth; dangers of exposure to
22 indoor mold growth in public buildings; risk assessment and inspection
23 methods for toxic mold; and other necessary information.
24 a. The public education programs shall provide education and informa-
25 tion through modes of communication that are commonly utilized and able
26 to be easily consumed by relevant individuals or organizations;
27 b. Public education programs should be designed to reach health
28 professionals; the general public; homeowners, prospective homeowners,
29 landlords, and tenants; consumers of home improvement products; the real
30 estate industry; the home construction and renovation industry, includ-
31 ing the heating and air conditioning industry; and other individuals and
32 organizations with an interest in the use and/or occupancy of real prop-
33 erty.
34 3. Notwithstanding the foregoing, the department of environmental
35 conservation, in consultation with appropriate agencies, shall publish,
36 and periodically revise, a pamphlet regarding indoor mold hazards. Among
37 other things this pamphlet should: contain information regarding the
38 health risks associated with exposure to indoor mold growth; provide
39 information on the hazards of indoor mold growth in public housing;
40 describe the risks of mold exposure for persons residing in a dwelling
41 with toxic mold; provide information on approved methods for evaluating
42 and reducing mold growth and their effectiveness in identifying, reduc-
43 ing, eliminating, or preventing mold growth; advise persons how to
44 obtain a list of persons certified to inspect or remediate mold growth
45 in the area in which the pamphlet is to be used; state that a risk
46 assessment or inspection for mold growth is recommended prior to the
47 purchase, lease, or renovation of target housing; state that certain
48 state and local laws impose additional requirements related to mold
49 growth in housing and provide a listing of federal, state, and local
50 agencies, including address and telephone number, that can provide
51 information about applicable laws and available governmental and private
52 assistance and financing; and provide information deemed appropriate
53 and/or necessary to promote awareness of the hazards posed by indoor
54 mold.
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1 TITLE II
2 HOUSING PROVISIONS FOR INDOOR MOLD HAZARD PREVENTION
3 AND DETECTION
4 Section 4855. Inspections of residential property.
5 4856. Sale or lease of residential property.
6 4857. Inspection requirements for existing public housing.
7 4858. Construction requirements for new public housing.
8 4859. Building codes.
9 4860. Inspection requirement in connection with state made or
10 insured mortgages.
11 § 4855. Inspections of residential property. Commencing January
12 first, two thousand eleven, the lessor of each unit of rental property
13 shall conduct an annual inspection of such property in accordance with
14 the model standards and techniques set forth in section forty-eight
15 hundred fifty-two of this article and shall promptly notify the occu-
16 pants of such property of the results of such inspection.
17 § 4856. Sale or lease of residential property. 1. Not later than Janu-
18 ary first, two thousand twelve, the commissioner of housing and communi-
19 ty renewal and the commissioner of environmental conservation shall
20 promulgate rules and regulations under this section for the disclosure
21 of mold hazards in housing which is offered for sale or lease.
22 2. The rules and regulations shall require that, before the sale or
23 lease of real property a mold inspection be conducted by a state-certi-
24 fied mold inspector and, within a reasonable time prior to the effective
25 date of the purchase or lease, the seller or lessor shall clearly and
26 accurately disclose to the purchaser or lessee the results of the
27 inspection required under this section.
28 3. Rules and regulations promulgated under this section shall provide
29 that every contract for the sale or lease of any interest in housing
30 shall contain a statement signed by both the seller or lessor and by the
31 purchaser or lessee that acknowledges the result of the mold inspection
32 required by subdivision two of this section.
33 4. Any person who knowingly misrepresents the results of a mold
34 inspection or causes the results of a mold inspection to be inaccurate
35 shall be subject to a civil money penalty of one thousand dollars.
36 5. Any person who knowingly violates the provisions of this section
37 shall be jointly and severally liable to the purchaser or lessee in an
38 amount equal to three times the amount of damages incurred by such indi-
39 vidual.
40 6. In any civil action brought for damages, the appropriate court may
41 award court costs to the party commencing such action, together with
42 reasonable attorney fees and any expert witness fees, if that party
43 prevails.
44 § 4857. Inspection requirements for existing public housing. 1. The
45 commissioner of housing and community renewal shall establish procedures
46 to eliminate, as far as practicable, the hazards of indoor mold with
47 respect to any existing public housing which may present such hazards,
48 in accordance with this section. Such procedures shall provide for
49 appropriate measures to conduct risk assessments, inspections, interim
50 controls, and abatement of indoor mold hazards.
51 2. At a minimum, such procedures shall require: the provision of
52 indoor mold hazard information pamphlets to tenants; periodic risk
53 assessments and interim controls in accordance with a schedule deter-
54 mined by the commissioner of housing and community renewal; mold
55 inspections; abatement of indoor mold hazards identified; where risk
56 assessment, inspection, or reduction activities have been undertaken,
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1 the provision of notice to occupants describing the nature and scope of
2 such activities and the actual risk assessment or inspection reports;
3 and such other measures as the commissioner of housing and community
4 renewal deems appropriate.
5 § 4858. Construction requirements for new public housing. The commis-
6 sioner of housing and community renewal shall take such actions and
7 impose such standards and conditions as may be necessary or appropriate
8 to ensure that public housing constructed after the date of the issuance
9 of the model construction standards and techniques established under
10 section forty-eight hundred fifty-two of this article, is constructed in
11 accordance with such model standards and techniques.
12 § 4859. Building codes. 1. The commissioner of housing and community
13 renewal shall develop model construction standards and techniques for
14 preventing and controlling mold within new buildings.
15 2. The model standards and techniques shall provide for geographic
16 differences in construction types and materials, geology, weather, and
17 other variables that may affect mold levels in new buildings.
18 3. To the maximum extent possible, these standards and techniques
19 should be developed with the assistance of organizations involved in
20 establishing national building construction standards and techniques.
21 The commissioner of housing and community renewal shall make a draft of
22 the document containing the model standards and techniques available for
23 public review and comment. The commissioner of housing and community
24 renewal shall make final model standards and techniques available to the
25 public no later than January first, two thousand ten.
26 § 4860. Inspection requirement in connection with state made or
27 insured mortgages. 1. After December thirty-first, two thousand ten, no
28 state agency may make, insure, or guarantee a mortgage or loan for
29 purchase or lease of residential real property unless: there has been an
30 inspection of the property for the presence of indoor mold growth, toxic
31 mold and/or the conditions that facilitate indoor mold growth hazards by
32 a mold inspector certified in accordance with standards promulgated
33 pursuant to this article within a reasonable time prior to the making,
34 insuring, or guaranteeing of the mortgage or loan and the results of the
35 inspection are clearly and accurately disclosed to the purchaser, seller
36 and mortgagor; and the contract for purchase and sale of an interest in
37 residential real property for which such mortgage or loan was made
38 contains a statement signed by the seller or lessor and by the purchaser
39 or lessee that these conditions have been complied with.
40 2. The heads of each of the agencies or authorities that make, insure,
41 or guarantee mortgages or loans for purchase or lease of residential
42 real property shall, not later than September thirtieth, two thousand
43 nine, issue such rules and regulations as may be necessary to carry out
44 this section.
45 § 3. The insurance law is amended by adding a new article 57 to read
46 as follows:
47 ARTICLE 57
48 TOXIC MOLD HAZARD INSURANCE PROGRAM
49 Section 5700. Program authority.
50 5701. Scope of program and priorities.
51 5702. Nature and limitation of insurance coverage.
52 5703. Estimates of premium rates.
53 5704. Establishment of chargeable premium rates.
54 5705. Toxic mold hazard insurance fund.
55 5706. Operating costs and allowances.
56 5707. Payment of claims.
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1 5708. Dissemination of insurance information.
2 5709. Coordination with other programs.
3 5710. Reports.
4 5711. Implementation.
5 5712. Industry insurance pool.
6 5713. Agreements with insurance pool.
7 5714. Adjustment and payment of claims and judicial review.
8 5715. Premium equalization payments.
9 5716. Emergency implementation of program.
10 5717. Adjustment and payment of claims and judicial review.
11 5718. Services by the insurance industry.
12 5719. Use of insurance pool, companies or other private organ-
13 izations for certain payments.
14 5720. Settlement and arbitration.
15 5721. Records and audits.
16 5722. Payments.
17 § 5700. Program authority. (a) The superintendent shall establish and
18 carry out a state toxic mold insurance program to enable interested
19 persons to purchase insurance against losses resulting from mold hazards
20 in real properties located in the state.
21 (b) In carrying out the toxic mold hazard insurance program under this
22 article, the superintendent shall, to the maximum extent practicable,
23 encourage and arrange for appropriate financial participation and risk
24 sharing in the program by insurance companies and other insurers; and
25 other appropriate participation on other than a risk-sharing basis, by
26 insurance companies and other insurers, insurance agents and brokers,
27 and insurance adjustment organizations.
28 § 5701. Scope of program and priorities. (a) In carrying out the
29 toxic mold hazard insurance program, the superintendent shall afford a
30 priority to making toxic mold hazard insurance available to cover resi-
31 dential properties which are designed for the occupancy of from one to
32 four families.
33 (b) If, pursuant to studies and investigations pursuant to section
34 five thousand seven hundred three of this article or such other informa-
35 tion as the superintendent considers appropriate, the superintendent
36 determines that it would be feasible to extend the insurance program
37 under this article to cover other properties, the superintendent may
38 take such action under this article as may be necessary to make insur-
39 ance available to cover, on such basis as may be feasible, any types and
40 classes of: other residential properties; church properties, and busi-
41 ness properties which are owned or leased and operated by small business
42 concerns; other business properties; properties occupied by private
43 nonprofit organizations; and properties owned by state and local govern-
44 ments and agencies thereof; and any such extensions of the program to
45 any types and classes of these properties shall from time to time be
46 prescribed in rules and regulations.
47 § 5702. Nature and limitation of insurance coverage. The superinten-
48 dent shall from time to time, after consultation with interested
49 parties, provide by rule and regulation for general terms and conditions
50 of insurability which shall be applicable to properties eligible for
51 toxic mold hazard insurance coverage under section five thousand seven
52 hundred one of this article, including: the types, classes, and
53 locations of any such properties which shall be eligible for such insur-
54 ance; the nature and limits of loss or damage that may be covered by
55 such insurance, which shall include costs of property damage and loss,
56 remediation, relocation (during remediation or permanently), and rental
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1 of an alternative dwelling during remediation; the classification, limi-
2 tation, and rejection of any risks that may be appropriate; appropriate
3 minimum premiums; appropriate loss-deductibles; appropriate limits on
4 aggregate liability under such coverage, based on the type of property
5 insured; and any other terms and conditions relating to insurance cover-
6 age or exclusion which may be necessary to carry out the purposes of
7 this article.
8 § 5703. Estimates of premium rates. The superintendent shall undertake
9 and carry out such studies and investigations and receive or exchange
10 such information as may be necessary to estimate, and shall from time to
11 time estimate the following premium rates for toxic mold hazard insur-
12 ance coverage under this article:
13 (a) Actuarial rates. The risk premium rates that would be required to
14 make such insurance available on an actuarial basis for any types and
15 classes of properties for which insurance coverage is available under
16 section five thousand seven hundred one of this article and which: are
17 based on consideration of the risk involved and accepted actuarial prin-
18 ciples; include the applicable operating costs and allowances set forth
19 in the schedules prescribed under section five thousand seven hundred
20 six of this article and reflected in such rates; and include any admin-
21 istrative expenses of carrying out the insurance program under this
22 article.
23 (b) Subsidized rates. The risk premium rates that: are less than the
24 rates estimated under subsection (a) of this section; would be reason-
25 able; would encourage prospective insureds to purchase toxic mold hazard
26 insurance coverage; would be consistent with the purposes of this arti-
27 cle; and include any administrative expenses incurred in carrying out
28 the insurance program under this article.
29 § 5704. Establishment of chargeable premium rates. (a) On the basis of
30 estimates made under section five thousand seven hundred three of this
31 article and such other information as may be necessary, the superinten-
32 dent shall from time to time, after consultation with the interested
33 parties, prescribe by rules and regulations: chargeable premium rates
34 for any types and classes of properties for which insurance coverage
35 shall be available under section five thousand seven hundred one of this
36 article (at less than the estimated risk premium rates under section
37 five thousand seven hundred three of this article, where necessary), and
38 the terms and conditions under which, and the areas within which, such
39 rates shall apply.
40 (b) Such rates shall, insofar as practicable, be:
41 (1) based on a consideration of the respective risks involved, includ-
42 ing differences in risks due to construction types and materials, build-
43 ing systems, geology, climate, and other factors that may affect mold
44 levels in buildings;
45 (2) adequate, on the basis of accepted actuarial principles, to
46 provide reserves for anticipated losses; or if less than such amount
47 consistent with the objective of making toxic mold hazard insurance
48 coverage available where necessary at reasonable rates so as to encour-
49 age prospective insureds to purchase such insurance and with the
50 purposes of this article;
51 (3) adequate to provide for any administrative expenses of the insur-
52 ance programs under this article; and
53 (4) stated so as to reflect the basis for such rates, including the
54 differences (if any) between the estimated actuarial risk premium rates
55 under subsection (a) of section five thousand seven hundred three of
56 this article and the estimated subsidized risk premium rates under
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1 subsection (b) of section five thousand seven hundred three of this
2 article.
3 (c) Subject only to the limitation under subdivision four of this
4 section, the chargeable rate with respect to any property that is
5 located within a jurisdiction that the superintendent determines has not
6 adopted adequate toxic mold control measures, with effective enforcement
7 provisions, that the superintendent determines are consistent with the
8 model standards and techniques for inspection and certification of occu-
9 pancy issued under section forty-eight hundred fifty-five of the public
10 health law and with the model standards for public disclosure issued
11 under section forty-eight hundred fifty-six of the public health law,
12 shall not be less than the applicable estimated risk premium rate for
13 such area (or subdivision thereof) under subsection (a) of section five
14 thousand seven hundred three of this article, except that such premium
15 rate for such properties shall be affordable and reasonably priced.
16 (d) Notwithstanding any other provision of this article, the chargea-
17 ble risk premium rates for toxic mold hazard insurance under this arti-
18 cle for any properties within any single risk classification may not be
19 increased by an amount that would result in the average of such rate
20 increases for properties within the risk classification during any
21 twelve-month period exceeding ten percent of the average of the risk
22 premium rates for properties within the risk classification upon the
23 commencement of such twelve-month period.
24 (e) The chargeable risk premium rate for toxic mold hazard insurance
25 under this article for a single family dwelling shall be affordable and
26 reasonably priced.
27 § 5705. Toxic mold hazard insurance fund. (a) To carry out the toxic
28 mold hazard insurance program under this article, the superintendent
29 shall establish a toxic mold hazard insurance fund, which shall be an
30 account separate from any other accounts or funds available to the
31 superintendent and shall be available for making such payments as may,
32 from time to time, be required under section five thousand seven hundred
33 fifteen of this article; and for the purposes specified in this section
34 under the conditions provided therein.
35 (b) The fund shall be credited with any amounts as may be appropriated
36 for the fund; interest which may be earned on investments of the fund
37 pursuant to subsection (c) of this section; receipts from any other
38 operations under this article (including premiums under the conditions
39 specified in this section); and such other amounts as may be credited to
40 the fund.
41 (c) If the superintendent determines that the amounts in the fund are
42 in excess of current needs, the superintendent may invest such amounts
43 as the superintendent deems advisable.
44 § 5706. Operating costs and allowances. (a) The superintendent shall
45 from time to time negotiate with appropriate representatives of the
46 insurance industry for the purpose of establishing a current schedule of
47 operating costs applicable both to risk-sharing insurance companies and
48 other insurers and to insurance companies and other insurers, insurance
49 agents and brokers, and insurance adjustment organizations participating
50 on other than a risk-sharing basis, and a current schedule of operating
51 allowances applicable to risk-sharing insurance companies and other
52 insurers.
53 (b) For purposes of subsection (a) of this section, the following
54 definitions shall apply:
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1 (1) "Operating allowances" shall mean amounts for profit and contin-
2 gencies that the superintendent determines are reasonable and necessary
3 to carry out the purposes of this article.
4 (2)"Operating costs" shall mean expense reimbursements covering the
5 direct, actual, and necessary expenses incurred in connection with sell-
6 ing and servicing toxic mold hazard insurance coverage; reasonable
7 compensation payable for selling and servicing such coverage, or commis-
8 sions or service fees paid to producers; loss adjustment expenses; and
9 other direct, actual, and necessary expenses which the superintendent
10 finds are incurred in connection with selling or servicing such insur-
11 ance coverage.
12 § 5707. Payment of claims. The superintendent shall prescribe rules
13 and regulations establishing the general method or methods by which
14 proved and approved claims for losses may be adjusted and paid for any
15 losses or damages covered by toxic mold hazard insurance made available
16 under this article.
17 § 5708. Dissemination of insurance information. The superintendent
18 shall from time to time take such action as may be necessary in order to
19 make information available to the public, and to any state or local
20 agency or official, with regard to the toxic mold hazard insurance
21 program, its coverage, and objectives; and estimated and chargeable
22 insurance premium rates under the program, including the basis for and
23 differences between such rates in accordance with the provisions of this
24 article.
25 § 5709. Coordination with other programs. In carrying out the
26 provisions of this article, the superintendent shall consult with other
27 departments and agencies of the state, and with interstate and local
28 agencies having responsibilities for toxic mold inspection and
29 prevention, in order to ensure that the programs of such agencies and
30 the program under this article are mutually consistent.
31 § 5710. Reports. The superintendent shall annually submit a report of
32 operations under this article to the governor, the temporary president
33 of the senate and the speaker of the assembly.
34 § 5711. Implementation. Following such consultation with represen-
35 tatives of the insurance industry as may be necessary, the superinten-
36 dent shall implement the toxic mold hazard insurance program under this
37 article.
38 § 5712. Industry insurance pool. (a) The superintendent may encourage
39 and otherwise assist any insurance companies and other insurers that
40 meet the requirements prescribed under subsection (b) of this section to
41 form, associate, or otherwise join together in a pool in order to
42 provide the insurance coverage authorized under this article, and for
43 the purpose of assuming, on such terms and conditions as may be agreed
44 upon, such financial responsibility as will enable such companies and
45 other insurers, with the financial and other assistance available under
46 this article, to assure a reasonable proportion of responsibility for
47 the adjustment and payment of claims for losses under the toxic mold
48 hazard insurance program.
49 (b) To promote the effective administration of the toxic mold hazard
50 insurance program under this article, and to ensure that the objectives
51 of this article are furthered, the superintendent may prescribe appro-
52 priate requirements for insurance companies and other insurers partic-
53 ipating in such pool, including minimum requirements for capital,
54 surplus or assets.
55 § 5713. Agreements with insurance pool. (a) The superintendent may
56 enter into such agreements with the pool formed or otherwise created
A. 648 10
1 under this article as the superintendent deems necessary to carry out
2 the purposes of this article.
3 (b) Such agreements shall specify: the terms and conditions under
4 which risk capital will be available for the adjustment and payments of
5 claims; the terms and conditions under which the pool (and the companies
6 and other insurers participating therein) shall participate in premiums
7 received and profits or losses realized or sustained; the maximum amount
8 of profit, established by the superintendent and set forth in the sched-
9 ules prescribed under section five thousand seven hundred six of this
10 article, which may be realized by such pool (and the companies and other
11 insurers participating therein); the terms and conditions under which
12 operating costs and allowances set forth in the schedules prescribed
13 under section five thousand seven hundred six of this article may be
14 paid; and the terms and conditions under which premium equalization
15 payments under section five thousand seven hundred fifteen of this arti-
16 cle will be made.
17 (c) In addition, such agreements shall contain such provisions as the
18 superintendent finds necessary to ensure that: no insurance company or
19 other insurer that meets the requirements prescribed under subsection
20 (b) of section five thousand seven hundred twelve of this article and
21 has indicated an intention to participate in the toxic mold hazard
22 insurance program on a risk-sharing basis, will be excluded from partic-
23 ipating in the pool; the insurance companies and other insurers partic-
24 ipating in the pool will take whatever action may be necessary to
25 provide continuity of toxic mold hazard insurance coverage by the pool;
26 and any insurance companies and other insurers, insurance agents, and
27 brokers and insurance adjustment organizations will be permitted to
28 cooperate with the pool as fiscal agents or otherwise, on other than a
29 risk-sharing basis, to the maximum extent practicable.
30 § 5714. Adjustment and payment of claims and judicial review. The
31 insurance companies and other insurers that form, associate, or other-
32 wise join together in the pool under this part may adjust and pay all
33 claims for proved and approved losses covered by toxic mold hazard
34 insurance in accordance with the provisions of this article and, upon
35 the disallowance by any such company or other insurer of any such claim,
36 or upon the refusal of the claimant to accept the amount allowed upon
37 any such claim, the claimant, within one year after the date of mailing
38 of notice of disallowance or partial disallowance of the claim, may
39 institute an action on such claim against such company or other insurer.
40 § 5715. Premium equalization payments. (a) The superintendent, on such
41 terms and conditions as the superintendent may from time to time
42 prescribe, shall make periodic payments to the pool formed or otherwise
43 created under section five thousand seven hundred twelve of this arti-
44 cle, in recognition of such reductions in chargeable premium rates under
45 section five thousand seven hundred fourteen of this article below esti-
46 mated premium rates under section five thousand seven hundred three of
47 this article as are required in order to make toxic mold hazard insur-
48 ance available on reasonable terms and conditions.
49 (b) Designated periods under this section and the methods for deter-
50 mining the sum of premiums paid or payable during such periods shall be
51 established by the superintendent.
52 § 5716. Emergency implementation of program. (a) Notwithstanding any
53 other provisions of this article, for the purpose of providing toxic
54 mold hazard insurance coverage at the earliest possible time, the super-
55 intendent may carry out the insurance program under this article during
56 the period ending September thirtieth, two thousand ten, in accordance
A. 648 11
1 with the provisions of this article insofar as they relate to this arti-
2 cle, but subject to the modifications made by or under subsection (b) of
3 this section.
4 (b) In carrying out the toxic mold hazard insurance program pursuant
5 to subsection (a) of this section, the superintendent shall provide
6 insurance coverage without regard to any estimated risk premium rates
7 which would otherwise be determined under section five thousand seven
8 hundred three of this article; and shall utilize the provisions and
9 procedures contained in or prescribed by this article to such extent and
10 in such manner as the superintendent may consider necessary or appropri-
11 ate to carry out the purpose of this section.
12 § 5717. Adjustment and payment of claims and judicial review. If the
13 program is carried out as provided in this article, the superintendent
14 may adjust and make payment of any claims for proved and approved losses
15 covered by toxic mold hazard insurance, and upon the disallowance by the
16 superintendent of any such claims, or upon the refusal of the claimant
17 to accept the amount allowed upon any such claim, the claimant, within
18 one year after the date of mailing of notice of disallowance or partial
19 disallowance by the superintendent, may institute an action against the
20 superintendent on such claim.
21 § 5718. Services by the insurance industry. In administering the toxic
22 mold hazard insurance program under this article, the superintendent may
23 enter into any contracts, agreements, or other appropriate arrangements
24 which may, from time to time, be necessary for the purpose of utilizing,
25 on such terms and conditions as may be agreed upon, the facilities and
26 services of any insurance companies or other insurers, insurance agents
27 and brokers, or insurance adjustment organizations; and such contracts,
28 agreements, or arrangements may include provision for payment of appli-
29 cable operating costs and allowances for such facilities and services as
30 set forth in the schedules prescribed under section five thousand seven
31 hundred six of this article.
32 § 5719. Use of insurance pool, companies or other private organiza-
33 tions for certain payments. (a) To provide for maximum efficiency in the
34 administration of the toxic mold hazard insurance program and to facili-
35 tate the expeditious payment of any funds under such program, the super-
36 intendent may enter into contracts with a pool formed or otherwise
37 created under section five thousand seven hundred twelve of this arti-
38 cle, or any insurance company or other private organization, for the
39 purpose of securing performance by such pool, company, or organization
40 or any or all of the following responsibilities: estimating and later
41 determining any amounts of payments to be made; receiving from the
42 superintendent, disbursing, and accounting for funds in making such
43 payments; making such audits of the records of any insurance company or
44 other insurer, insurance agent or broker, or insurance adjustment organ-
45 ization as may be necessary to assure that proper payments are made;
46 otherwise assisting in such manner as the contract may provide to
47 further the purposes of this article.
48 (b) Any contract with the pool or an insurance company or other
49 private organization under this section may contain such terms and
50 conditions as the superintendent finds necessary or appropriate for
51 carrying out responsibilities under subsection (a) of this section, and
52 may provide for payment of any costs which the superintendent determines
53 are incidental to carrying out such responsibilities which are covered
54 by the contract.
55 (c) No contract may be entered into under this section unless the
56 superintendent finds that the pool, company, or organization will
A. 648 12
1 perform its obligations under the contract efficiently and effectively,
2 and will meet such requirements as to financial responsibility, legal
3 authority, and other matters as the superintendent finds appropriate.
4 (d)(1) Any such contract may require the pool, company, or organiza-
5 tion or any of its officers or employees certifying payments or disburs-
6 ing funds pursuant to the contract, or otherwise participating in carry-
7 ing out the contract, to give surety bond in such amount as the
8 superintendent may deem appropriate.
9 (2)(A) No individual designated pursuant to a contract under this
10 section to certify payments shall, in the absence of gross negligence or
11 intent to defraud, be liable with respect to any payment certified by
12 such individual under this section.
13 (B) No officer disbursing funds shall in the absence of gross negli-
14 gence or intent to defraud, be liable with respect to any payment by
15 such officer under this section if it was based upon a voucher signed by
16 an individual designated to certify payments.
17 (e) Any contract entered into under this section shall be for a term
18 of one year, and may be made automatically renewable from term to term
19 in the absence of notice by either party of an intention to terminate at
20 the end of the current term; except that the superintendent may termi-
21 nate any such contract at any time (after reasonable notice to the pool,
22 company, or organization involved) if the superintendent finds that the
23 pool, company, or organization has failed substantially to carry out the
24 contract, or is carrying out the contract in a manner inconsistent with
25 the efficient and effective administration of the toxic mold hazard
26 insurance program under this article.
27 § 5720. Settlement and arbitration. (a) The superintendent may make
28 final settlement of any claims or demands which may arise as a result of
29 any financial transactions that the superintendent is authorized to
30 carry out under this article and may, to assist the superintendent in
31 making any such settlement, refer any disputes relating to such claims
32 or demands to arbitration, with the consent of the parties concerned.
33 (b) Such arbitration shall be advisory in nature, and any award, deci-
34 sion, or recommendation which may be made shall become final only upon
35 the approval of the superintendent.
36 § 5721. Records and audits. (a) The insurance pool formed or otherwise
37 created under this article, and any insurance company or other private
38 organization executing any contract, agreement, or other appropriate
39 arrangement with the superintendent under this article, shall keep such
40 records as the superintendent shall prescribe, including records which
41 fully disclose the total costs of the program undertaken or the services
42 being rendered, and such other records as will facilitate an effective
43 audit.
44 (b) The superintendent and the comptroller, or any of their duly
45 authorized representatives, shall have access for the purpose of audit
46 and examination to any books, documents, papers and any such insurance
47 company or other private organization that are pertinent to the costs of
48 the program undertaken or the services being rendered.
49 § 5722. Payments. Any payments under this article may be made (after
50 necessary adjustment on account of previously made underpayments or
51 overpayments) in advance or by way of reimbursement, and in such
52 installments and on such conditions, as the superintendent may deter-
53 mine.
54 § 4. The sum of two hundred fifty thousand dollars ($250,000), or so
55 much thereof as may be necessary, is hereby appropriated to pay the
56 expenses incurred, including personal service, in carrying out the
A. 648 13
1 provisions of this act. Such moneys shall be payable out of the state
2 treasury in the general fund to the credit of the state purposes account
3 after audit by and on the warrant of the comptroller upon voucher certi-
4 fied or approved by the superintendent of insurance in the manner
5 prescribed by law.
6 § 5. This act shall take effect on the sixtieth day after it shall
7 have become a law.
