Celebrating a Workers Comp Increase Notification Law’s Impact on New York Businesses
Big I New York is celebrating the sustained impact of a law enacted six years ago safeguarding the state’s businesses. Former Governor Andrew M. Cuomo signed Assembly Bill No. 1620 into law in 2018. This law continues to require insurance companies to provide advance notice to employers regarding certain Workers’ Compensation insurance premium increases.
“For three decades, New York businesses have been entitled to advance notice of significant premium increases for many types of insurance,” said Big I New York Chair of the Board Richard E. MacDonald, CPCU, ARM, AIM. “However, Workers’ Compensation was notably exempted. Recognizing the significance of Workers’ Compensation as one of the most expensive coverages for businesses, the law we championed six years ago now ensures that businesses receive fair warning of premium increases within the insurer’s control, allowing them the necessary time to respond.”
The Predecessor Law
New York passed a law in 1986 requiring insurers to notify businesses in advance when premiums increased by more than ten percent. However, this law exempted Workers’ Compensation insurance from its provisions. Consequently, businesses often found themselves learning of substantial Workers’ Comp premium increases mere days before their policies were due for renewal. This leaves them with limited time to explore more affordable alternatives.
Big I New York proposed Assembly Bill 1620. This law mandates insurers to furnish businesses with written notices when their Workers’ Comp policy premiums rise by more than ten percent upon renewal by an affiliated insurer. They must dispatch notices at least 30 days before the expiration of existing policies. Importantly, this requirement solely pertains to premium components within the insurer’s control. Insurers do not have to issue notices when increases stem from factors such as changes in the business’s payroll or experience modification factors.
Impact and Future Prospects
The requirement for conditional renewal notices does not extend to the New York State Insurance Fund, which lacks affiliated insurers.
MacDonald expressed gratitude to Senator Joseph Robach and Assemblyman Andrew Hevesi, the sponsors of the bill, as well as Governor Cuomo. “This law,” he emphasized, “empowers agents to assist their business clientele in better managing their Workers’ Compensation expenses, while still allowing insurance companies to pursue necessary premium adjustments.”
Governor Cuomo, in his approval message, urged the State Legislature to enact certain technical amendments to the law. Meanwhile, MacDonald assured that Big I New York would collaborate closely with lawmakers on these revisions.
The law, effective for all policies issued or renewed on and after April 17, 2018, continues to serve as a pillar of protection for New York businesses, ensuring transparency and fairness in insurance premium increases.
If you have any questions regarding how this law may affect your company and how to handle a workers comp increase, call an advisor at Metropolitan Risk at 914-357-8444, or visit our website here.
