Assemblymember Kevin Cahill (D-Kingston) announced signature by the Governor of three bills relating to the insurance industry. These new laws address protections on neonatal coverage, modernizing mortgage insurance for homebuyers and extending the State’s reporting requirement regarding the renewal of auto-insurance policies in New York. “As Chair of the Assembly’s Insurance Committee, I am pleased to see each of these measures go into effect. Every one of these new laws means improvements for different aspects of New York’s strong insurance marketplace,” stated Assemblymember Cahill.
The first change seeks to correct billing issues surrounding admitting newborns into the Neonatal Intensive Care Unit. It was brought to the Legislature’s attention that a number of health insurers have been denying payments to providers for neonatal services, based solely on an administrative processing practices. These rejections were often declared without any determination made on the clinical validity of the care provided. A.8051 (Gottfried)/S.6053 (Hannon) will correct these current practices, by preventing denial on an administrative basis.
When asked about this positive action Mr. Cahill stated, “This law strikes an important balance by protecting a doctor’s ability to make a medical determination based on a newborn’s condition while still allowing an insurance company the leeway to review a claim and refute it if there is actual evidence that treatment was not medically necessary. This provision will help bring stability and peace of mind for parents so that they will be able to access the insurance coverage needed to help their child.”
“Parents with a newborn in intensive care have enough on their minds. They shouldn’t have to go through hassles with their insurance company to get it covered. It is shocking that some insurance plans do that,” said Assembly Health Committee Chair and bill sponsor Richard N. Gottfried. “I commend Governor Cuomo for signing this bill and Insurance Committee Chair Kevin Cahill for his work on the issue.”
The second bill, A.1953 (Moya) is aimed at alleviating significant restraints on mortgage insurers. With many first-time homebuyers unable to pay the 20 percent down payment traditionally required by banks to secure a mortgage, insurance is often the only way they are able to close the deal. However, a change to the law in 1994 resulted in the creation of no longer relevant administrative restrictions on companies. The attempt to reduce the exposure of mortgage guaranty insurance required the insurer to obtain reinsurance for any coverage exceeding twenty-five percent of the borrower’s total indebtedness.
What followed was the market’s failure to respond to this need. Insurance companies could comply only through forming affiliated reinsurers on their own. “Today’s change in law, thanks to Assemblymember Moya, will simplify the process and alleviate unnecessary administrative and financial burdens on the marketplace. The Legislature expects the modification to allow insurers to focus on their customers’ needs,” said Assemblymember Cahill.
“My bill, by lifting unnecessary costs and complexities for the industry, will help reduce financial burdens borne by first-time and low- to moderate-income homebuyers who do not have a 20% down payment to purchase a house. I want to thank Chairman Cahill and my legislative colleagues in both houses and the Governor for partnering with me on this important initiative,” stated Assemblyman Francisco P. Moya.
Another important measure comes in the form of A.8306 (Pellegrino), which extends the requirement that the New York State Department of Financial Services (DFS) release a bi-annual report on the operation of the 2 percent rule in auto insurance non-renewals. New York has a longstanding law in place regarding an insurer’s ability to non-renew or conditionally renew individual automobile insurance policies. It limits the insurer’s ability to effect this change of status up to a maximum of 2 percent of the total number of such policies in force at the end of the previous year, in each of an insurer’s rating territories.
The information collected by DFS helps to keep track of developments in the NY auto insurance market. This report is a useful tool for DFS and the Legislature to monitor statewide activities when looking for possible red flags relating to unfair practices. “I am pleased that DFS will continue to produce this valuable report for the public. The information provided has been helpful in the past and will continue to allow the Legislature to have the transparency needed to keep a real eye on the auto insurance market,” concluded Mr. Cahill.
“I am extremely committed to protecting consumers from rising automobile insurance rates. The bill passed by the State Assembly, A.8306 and signed by Governor Cuomo, helps protect consumers by requiring a bi-annual report that monitors insurance companies’ decisions to renew or discontinue company policies,” said Assemblymember Pellegrino.
These bills were part of a package signed into law and marshaled by Assemblymember Cahill aimed at easing access to insurance for New York consumers.