Albany Update: “Bad Faith”, Lead Paint Exclusion Ban, Privacy Act Introduced

Given New York’s political climate, playing defense is one of the most important ways Big I NY stands up for you in Albany. New York’s legislative session concludes in four weeks, and as is typically the case, numerous harmful bills have popped up.

Last week, Assemblywoman Helene Weinstein (D, Brooklyn) introduced a bill to create a statutory “bad faith” cause of action, allowing policyholders to sue insurance companies for a wide range of alleged unfair conduct. The bill includes a raft of incentives for trial attorneys, including extra-contractual damages, double and treble damages, attorney fees, interest, and penalties for failing to settle claims in as little as six months. The impact of this legislation on New York’s insurance market would be enormous, and we expect many carriers would exit the market and premiums would spike. Notably, California adopted a similar scheme through a court decision in 1979, only to have the court later reverse its own ruling, citing “undesirable social and economic effects” after insurance premiums skyrocketed. The bill currently sits in the insurance committee.

On Tuesday, the effort to ban the use of lead paint exclusions picked up momentum when Assemblyman Jonathan Rivera (D, Buffalo) introduced a same-as bill to Senator Sean Ryan’s proposal. We are concerned that this bill, while well intentioned, would have major repercussions on the habitational coverage market, and make coverage unaffordable or unavailable all together.

On Wednesday, Senator Kevin Thomas (D, Nassau) introduced the NY Privacy Act, which would require companies to act as “information fiduciaries” and hold them liable for a wide range of possible harms that may occur from the misuse or transfer of that data, including indirect financial loss, psychological harm, anxiety, embarrassment, fear, or significant inconvenience or expenditure of time, to name a few. The legislation also creates a private right of action and allows for attorney’s fees for prevailing plaintiffs. This would expose businesses to enormous liability risk and associated cost increases for insurance coverage and compliance.

Big I NY has your back – we strongly oppose these bills, and will continue to lobby for their defeat. And keep an eye on your inbox for opportunities to fight back on these bills in the coming weeks. 

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