Requires prior approval of certain rates; requires insurers provide written explanations for certain premium increases; and authorizes the refiling of certain…

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◆ The sponsor's argument

Why James Skoufis says this is needed

In August 2025, the Senate Committees on Insurance, Housing, and Inves- tigations & Government Operations jointly initiated an investigation into the affordability and accessibility of residential property insur- ance. Among numerous other findings, the Committees uncovered a concern- ing pattern of sustained, excessive profitability among insurers in the New York market. Data provided within the National Assbciation of Insurance Commission- ers' (NAIC) 2023 'Profitability by Line by State' report illustrate that New York's insurers have been achieving a nearly 16% profit on under- writing for homeowners (HO) multi-peril coverage, and a nearly 18% return on net worth for this coverage. These levels have remained more or less consistent over the past ten years, and only six other states posted higher rates of profit/return for homeowners multi-peril in 2023. Nationally, carriers have fared far worse than in New. York, experienc- ing an 11% loss on underwriting for HO multi-peril, and a York is expe- riencing persistently high levels of profitability that could underscore inadequate attraction of competition or, worse, that New Yorkers are footing increasingly higher bills divorced from the actual risks they're facing here on the east coast. This bill tackles issues of insurance affordability and rate-setting in several ways: First, it eliminates the longstanding practice of 'file and use' for commercial and personal residential property insurances as well as commercial liability insurance, wherein insurers file their proposed rates with DFS but, by law, can put these rates in place immediately, without receiving. prior approval from DFS. This bill will require these types of insurance to receive `prior approval' before being implemented for consumers, just as personal vehicle insurance rates, title insurance rates, and more are currently required. By eliminating 'file and use,' consumers will be protected from overzealous rate-setting, while ensur- ing prompt evaluation of all rates by DFS. Second, it requires that insurers proactively justify any premium increases to consumers when their policy is up for renewal. Currently, consumers do not have a right to such an explanation, and are often left confused and angry when they see their annual premium skyrocketing with- out a single claim to their name. This bill will force insurers to take responsibility for premium increases and provide clarity and transparen- cy in the process. Third, it requires DFS to establish two separate benchmarks: one for actual loss ratio, one of the figures used most often to measure a company's profitability; and one for investment returns, another key measure of profitability. If an insurer's actual loss ratio falls below its corresponding benchmark, and their investment returns fall above the corresponding benchmark two years running, DFS must automatically require a rate reduction for the insurer, putting more money back in New York property owners' pockets. While regulators and lawmakers have a responsibility to ensure a thriv- ing and profitable statewide insurance industry, they must balance this with their responsibility to protect the financial interests of New Yorkers.

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.