View this article online: https://www.insurancejournal.com/news/east/2016/05/24/409747.htm
The Independent Insurance Agents & Brokers of New York (IIABNY) applauded a New York Senate committee’s action to protect employers from surprise insurance premium increases in their workers’ compensation policies.
The Senate Labor Committee approved IIABNY’s bill during its meeting Tuesday at the State Capitol in Albany. The measure has now been placed on the calendar for the full state Senate to consider.
“Workers’ compensation insurance is a major expense for New York employers,” said IIABNY Chair of the Board John H. Smith, Jr.
“For decades, insurers have had to notify businesses in advance of large premium increases for other types of insurance. Not so for workers’ compensation,” Smith said. “This important bill will put Workers’ compensation under the same rules.”
New York Senate Bill 4399A, sponsored by Sen. Joseph E. Robach (R-56th District), would require insurers to give employers at least 30 days’ advance notice when their renewal policy premiums for workers’ comp will increase by more than 10 percent over the previous policies’ premium.
The requirement would apply when the premium increase is within the insurer’s control. It would not apply to factors required by state rules beyond the insurer’s control, such as a change in the state-approved loss costs (rates minus overhead costs and profit), discounts and surcharges driven by the employer’s past loss experience, and growth in the employer’s payroll. Workers’ comp premiums are based on the amount of payroll.
IIABNY said New York insurance law has required insurers to provide advance notice of premium increases for other types of business insurance since 1986. However, that law does not apply to workers’ comp insurance.
Employers often receive the bills for their workers’ comp renewal premiums shortly before payment is due. This leaves them little time to look for other coverage at a lower cost. IIABNY said it developed the language for Sen. Robach’s legislation to address this unfair situation.
“We commend the Senate Labor Committee for approving this measure to protect New York employers,” Smith said. “We now encourage the full Senate to pass it.”