NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7910A
SPONSOR: Weprin TITLE OF BILL:
An act to amend the insurance law, in relation to prohibiting discrimi-
nation because of the affordability of residential buildings
PURPOSE OF BILL:
The purpose of this bill is to ensure that affordable housing develop-
ments are not subject to discrimination when purchasing insurance.
SUMMARY OF PROVISIONS:
This bill would prohibit an insurer of residential property from inquir-
ing about on an application, cancelling, refusing to issue or renew or
increasing the premium of a policy, or excluding, limiting, restricting,
or reducing coverage under a policy based on the level or source of
income of the tenants or the real property owner; whether the building
contains units that must be affordable to residents at a specific income
level pursuant to a statue, regulation, regulatory agreement or restric-
tive declaration with a local, state, or federal government entity;
whether the property owner or tenants receive rental assistance provided
by a local, state, or federal government entity, wherein the tenant's
portion of the rent is limited to a percentage of their income; or on
whether the building is owned by a limited-equity cooperative, a public
housing authority or by a cooperative housing corporation.
JUSTIFICATION:
In 2021, the Legislature and the Governor enacted a statute (Chapter
790, S5231/A5574 Kavanagh/Cymbrowitz), which directed the Department of
Finance Services (DFS) and Homes and Community Renewal (HCR) to conduct
a study to examine the increasing costs of insurance premiums and
decreasing availability of insurance coverage for affordable housing
developments. The study, published in November 2022, collected stake-
holder feedback from affordable housing developers; analyzed the insur-
ance costs and coverage of affordable housing projects within HCR's
portfolio; and examined factors that may contribute to the underwriting,
rating, and price-setting of premiums of fire and casualty insurance
plans. The report states that although the "Insurance Law does not
explicitly prohibit consideration of whether a property is comprised of,
in part, affordable, subsidized, or Section 8 units when making under-
writing or rating determinations," "insurer inquiries about affordable
housing raise legitimate concerns from stakeholders about the potential
for unfairly discriminatory results."
In the study, affordable housing owners indicated that insurance compa-
nies and producers often ask whether buildings contain affordable,
subsidized, or Section 8 units, and what proportion of the buildings are
such units. Presumably insurers intend to use responses to these
inquiries to make decisions about which properties to insure and at what
price. According to the study, affordable housing owners indicated that
the "reasons that the insurers would not write the risks included an
inability to consider NYC Habitational and/or Affordable Housing risks
at this time,' to a lack of appetite for affordable housing developments
in New York City, to only being willing to consider housing with 'no
more than 20%' section 8 housing."
New York Insurance Law allows insurers to consider underwriting and
rating factors that are reasonably related to actual or anticipated.
losses to ensure that rates are adequate and that policyholder claims
will be paid. While the Insurance Law explicitly prohibits the use of
certain factors in underwriting or rating, such as race, color, creed,
national origin, disability, and status, it does not explicitly prohibit
consideration of whether a property is comprised of, in part, afforda-
ble, subsidized, or Section 8 units when making underwriting or rating
determinations. However, these insurer inquiries about affordable hous-
ing raise legitimate concerns from stakeholders about the potential for
unfairly discriminatory results. This legislation addresses these
concerns by prohibiting discrimination against affordable, subsidized,
or Section 8 housing in underwriting or insurance policies.
LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7910--A
2023-2024 Regular Sessions
IN ASSEMBLY
August 4, 2023
___________
Introduced by M. of A. WEPRIN, REYES, GALLAGHER, LEVENBERG, LEE, SHIM-
SKY, GUNTHER, DICKENS, GONZALEZ-ROJAS, BURDICK, HEVESI, LUCAS,
SEAWRIGHT, AUBRY, CRUZ, LUNSFORD, GLICK, ARDILA, SIMONE, WALLACE,
SEPTIMO -- read once and referred to the Committee on Insurance --
recommitted to the Committee on Insurance in accordance with Assembly
Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the insurance law, in relation to prohibiting discrimi-
nation because of the affordability of residential buildings
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 3462
2 to read as follows:
3 § 3462. Affordable housing underwriting and rating. (a) An insurer
4 that issues or delivers in this state a policy of insurance covering
5 loss of or damage to real property containing units for residential
6 purposes shall not inquire about on an application, nor shall an insurer
7 cancel, refuse to issue, refuse to renew or increase the premium of a
8 policy, or exclude, limit, restrict, or reduce coverage under a policy
9 based on, the following:
10 (1) The residential building contains dwelling units that shall be
11 affordable to residents at a specific income level pursuant to a statue,
12 regulation, regulatory agreement or restrictive declaration with a
13 local, state, or federal government entity;
14 (2) The real property owner or tenants of such residential building
15 receive rental assistance provided by a local, state, or federal govern-
16 ment entity wherein the tenant's portion of the rent is limited to a
17 percentage of such tenant's income;
18 (3) The level or source of income of the real property owner or the
19 tenants of the residential building; or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10702-06-4
A. 7910--A 2
1 (4) Whether such residential building is owned by a limited-equity
2 cooperative; owned by a public housing authority; or owned by a cooper-
3 ative housing corporation subject to the provisions of article two,
4 article four, article five or article eleven of the private housing
5 finance law.
6 (b) Nothing in this section shall prohibit an insurer from canceling,
7 refusing to issue, refusing to renew, increasing the premium of an
8 insurance policy or excluding, limiting, restricting, or reducing cover-
9 age under such policy due to other factors that are permitted by any
10 other section of this chapter.
11 § 2. This act shall take effect immediately.
