Relates to liability insurance for voluntary foster care agencies

◆ The sponsor's argument

Why Jamaal Bailey says this is needed

New York operates a state supervised, county administered, foster care system whereby many of the children and youth in care are placed with private nonprofit Voluntary Foster Care Agencies (VFCAs). VFCA's are required per their contracts with counties to carry certain levels of general liability insurance. However, due to social inflation and increasing pressures in the insurance market, specifically related to foster care, agencies in NYS and nationwide are experiencing significant challenges in accessing liability insurance coverage. There are very few insurance providers in this sector already, and we have very recent- ly begun to see the field get even smaller. This is becoming an increas- ingly dire issue. The state must intervene to ensure access to this mandated coverage. Failure to act could lead to nonprofits being forced out of the field, leaving government responsible for the provision of these services. We must learn from the experience in California, where 19 foster care service agencies now can't find coverage since the insurer of 90% of the foster family agencies (FFAs) in the state halted renewals of coverage for all FFAs in the state.(1) This has created a crisis in the sector in California - confusion for foster care parents and youth- and has left the counties struggling to either provide services directly or transfer youth and services other organizations who were able to obtain alternate means of insurance coverage. There is very limited infrastructure and capacity in NY for counties to directly provide foster care services - VFCAs currently provide more than 75% of foster care services statewide, and 100% in New York City. Without state action to ensure adequate coverage options, children and youth, ultimately in the care and custody of the state, and their fami- lies will experience significant disruptions in their care. Additionally, the current administrative rate set by the state for VFCA's (the Maximum State Aid Rate) must be modified to capture the full scope of the rapidly increasing liability insurance costs and reimburse VFCA's for related expenses in the same fiscal year as they occur. MSAR rates currently use data from two years prior which don't capture these increased costs when providers are experiencing them. Moreover, by including liability insurance costs in a capped general administrative parameter, many of our agencies are experiencing growth in costs that are excluded from rate calculations.

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.