Relates to statewide municipal reciprocal program agreements and the issuance of program bonds

◆ The sponsor's argument

Why Leroy Comrie says this is needed

The public interest arises from the fact that the New York Schools Insurance Reciprocal ("NYSIR") is the vehicle through which New York's public school districts and BOCES insure one another against property and casualty losses. The state's Education Law and good government prin- ciples require that public school districts and BOCES maintain property and casualty insurance. The New York Schools Insurance Reciprocal was created at a time when property and casualty insurance was either unavailable or unaffordable for New York's public school districts and BOCES. The need for NYSIR continues, as the problems of unaffordability and unavailability continue. NYSIR is critical to the support of public schools and BOCES across New York State. Access to affordable capital will enhance NYSIR's ability to fulfill its essential governmental purpose. Industry standards require insurance reciprocals to maintain a surplus for the purposes of managing risk and protecting against unexpected losses. In recent years it has become untenable to maintain the required surplus due to the rising costs of claims, in particular claims arising from sexual abuse. Since the enactment of the Child Victims' Act in 2019, NYSIR has suffered significant financial distress. In fact, NYSIR has paid more than $150 million in damages for sexual abuse claims since its inception in 1989, with over $100 million paid out in just the past five years. As a result of these unforeseen events, NYSIR's surplus has dropped significantly, and surplus is not something which can be easily rebuilt just through increases in premiums. The impact of these events, if left unremedied, is contrary to the public interest of the state and threatens a decline in the general welfare of the public school system and the municipalities in which they exist. It is in the public interest of the state to provide a financing vehicle to NYSIR to remedy the impacts of these unforeseen events.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.