Authorizes municipal reciprocal insurers to offer full faith and credit surety bonds for public officers.
Ayes (61): Adams, Addabbo, Alesi, Aubertine, Bonacic, Breslin, DeFrancisco, Diaz, Dilan, Duane, Farley, Flanagan, Foley, Fuschillo, Golden, Griffo, Hannon, Hassell-Thomps, Huntley, Johnson C, Johnson O, Klein, Krueger, Kruger, Lanza, Larkin, LaValle, Leibell, Libous, Little, Marcellino, Maziarz, McDonald, Montgomery, Morahan, Nozzolio, Onorato, Oppenheimer, Padavan, Parker, Peralta, Perkins, Ranzenhofer, Robach, Saland, Sampson, Savino, Schneiderman, Serrano, Seward, Skelos, Smith, Squadron, Stachowski, Stavisky, Stewart-Cousins, Thompson, Valesky, Volker, Winner, Young
Excused (1): Espada
TITLE OF BILL: An act to amend the insurance law, in relation to organization of domestic reciprocal insurers
PURPOSE OR GENERAL IDEA OF BILL: To authorize municipal reciprocal insurers to offer full faith and credit surety bonds for public officers.
SUMMARY OF PROVISIONS: Section 1. Subsection (a) of section 6102 of the insurance law, as amended by chapter 220 of the laws of 1986, amends the qualifications for organization of domestic reciprocal insurers.
JUSTIFICATION: One of the fundamental insurance coverages that all municipalities need is full faith and credit bonds for their public officers. This is a required coverage by virtue of Public Officers law, § 11 and 30, and parallel provisions of the Town, Village and General City laws. Failure to acquire such coverage for municipal officials who handle financial transactions of a municipality results in the office being vacated by operation of law.
New York Municipal Insurance Reciprocal (NYMIR) was licensed in September of 1993 by the NYS Insurance Department pursuant to Article 61 of the NYS Insurance Law and currently provides insurance to over 600 subscriber municipalities.
It is important that NYMIR be able to offer full faith and credit surety bonds. There is now a very limited market for these types of insurances. Current law puts NYMIR and the local brokers and agents in a very difficult position when trying to place these coverages. Elected officials need this coverage in order to qualify for office. They have only 30 days from the commencement of their term to acquire it, or they are deemed to have vacated the office to which they were just elected. Yet even markets that continue to offer this essential coverage are now requiring credit checks and in some cases declining to extend coverage if a satisfactory credit history is not forthcoming. As the largest underwriter of local government risk in the State, this is exactly the reason NYMIR was formed, to insure that New York's local governments will be able to acquire the insurance protections that their taxpayers require.
PRIOR LEGISLATIVE HISTORY: 2008 (S7174/A10829)
FISCAL IMPLICATIONS: None.