S 8200: Enacts the "construction insurance transparency act" to require insurers providing coverage for liability under the scaffold law to report, on an annual basis, to the superintendent of financial services relating to its finances and claims paid thereunder.

  
  STATE OF NEW YORK ________________________________________________________________________ 8200 2025-2026 Regular Sessions  IN SENATE May 20, 2025 ___________ Introduced by Sens. SCARCELLA-SPANTON, LANZA -- read twice and ordered printed, and when printed to be committed to the Committee on Insur- ance AN ACT to amend the insurance law, in relation to enacting the "construction insurance transparency act of 2025" requiring all insur- ers which issue policies of liability insurance insuring against claims made in reliance upon the duty imposed by the "scaffold law" to file annual financial statements and detailed claim data with the superintendent of financial services The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the 2 "construction insurance transparency act of 2025". 3 § 2. Declarations of legislative findings. The legislature hereby 4 finds and declares that persons, corporations, associations or other 5 business entities which issue policies of liability insurance insuring 6 an owner of real property or a contractor who is performing work and 7 services on real property against claims made in reliance upon the 8 duties imposed upon such parties by section 240 of the labor law, 9 commonly referred to as the "scaffold law", owe an obligation to the 10 public, to those they insure and to those who may in the future be 11 insured by them, to fully disclose in a public and transparent manner 12 all elements relating to the premiums paid for such insurance, the meth- 13 od and manner in which such premiums are determined and imposed upon 14 insureds, and claims made by injured persons who rely on owners and 15 contractors to provide a safe and secure worksite as required in such 16 section of such law. It is essential that the public be made aware of 17 such an insurer's responsibility to inform them of their financial 18 condition and solvency, and the details and specifics of the factors and 19 circumstances behind its financial solvency as well as the basis for the 20 rates they charge to owners and contractors to obtain such coverage. The EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05923-01-5 
 S. 8200 2 1 determination of premiums for such liability insurance policy in this 2 state has, unfortunately, gone on too long in obscurity, with even those 3 who bear the cost of premiums unable to learn why prices are set as they 4 are. As a matter of public trust, liability insurers should be required 5 to make the public aware of the pertinent facts related to their premium 6 determinations and financial solvency by disclosing all the pertinent 7 facts as provided for in this section. It is the further sense of the 8 legislature that this data should be disclosed in an open and public 9 manner, and should be made available without undue cost and delay. 10 § 3. The insurance law is amended by adding a new section 346 to read 11 as follows: 12 § 346. Financial statement and detailed claim data to be filed with 13 the superintendent. (a) For purposes of this section, the term "insurer" 14 shall mean any person, corporation, association or other business entity 15 which issues a policy of liability insurance insuring a contractor or 16 owner of real property located in this state against claims made by an 17 injured worker, the claim for which is made in reliance upon the duty 18 owed to such worker pursuant to the provisions of section two hundred 19 forty of the labor law. 20 (b) On or before April first of each year, every insurer shall for the 21 prior calendar year provide the superintendent and the public with a 22 detailed financial statement to supplement and expand upon any other 23 information otherwise provided to the department as it relates an insur- 24 er's provision of liability insurance coverage to owners of real proper- 25 ty or contractors performing services to owners of real property for 26 claims made by an injured person in reliance upon the duty owed by 27 section two hundred forty of the labor law; provided, however, that the 28 initial financial statement so filed by an insurer after the effective 29 date of this section shall include the information required in this 30 subdivision not only for such prior calendar year but also for the 31 previous nine calendar years prior to such report. The financial state- 32 ment shall, in depth, separate the cost of providing section two hundred 33 forty of the labor law based coverage from the cost of providing general 34 liability insurance insuring the same owner or contractor with respect 35 to the same property and shall contain at least the following informa- 36 tion relating to coverage pursuant to such section: (1) that portion of 37 premiums assessed and attributable to providing such coverage; (2) paid 38 judgments, settlements or losses resulting from such coverage; (3) case 39 reserves for losses which may be attributable to coverage; (4) incurred 40 but not reported loss estimates which may be attributable to coverage; 41 (5) paid defense and cost containment expenses attributable to any 42 claims made based upon such coverage; (6) case reserves for defense and 43 cost containment experience attributable to any claims made based upon 44 such coverage; (7) incurred but not reported defense and cost contain- 45 ment estimates based upon such coverage; (8) premium and loss experience 46 identified by policy limits and deductibles; (9) number of claims initi- 47 ated and closed; (10) number of claims closed with loss payments; (11) 48 number of open claims at the time such statement is prepared; (12) other 49 expenses by category as determined by the superintendent to reflect the 50 cost to the insurer to provide such coverage as part of a liability 51 insurance policy; (13) investment income realized from that portion of 52 the premium paid for a policy providing such coverage; (14) the amount 53 of exposure to the insurer resulting from the provision of such coverage 54 and whether the insurer has limited the amount of coverage provided 55 together with an estimate of the amount which might be required of the 56 insured to purchase further coverage from an out of state excess lines 
 S. 8200 3 1 provider, based upon current data available to such in-state provider, 2 especially where such in-state provider operates as an excess line 3 insurer for risks in another state; (15) amounts spent by insurer for 4 risk management programs, or required to be spent by insureds at the 5 behest of the insurer, which programs are designed and intended to 6 promote worksite safety, more particularly as it relates to height 7 related accidents covered by section two hundred forty of the labor law; 8 and (16) the aforegoing experience and information further subdivided by 9 quality of risk as measured by prior loss experience, contractor payroll 10 ranges, contractor number of employee ranges, risk management partic- 11 ipation, and other relevant identifiable differences in exposure to 12 insurance loss. The data provided by insurers shall be separated out so 13 that a determination can be made that a claim made or paid is based 14 partially or totally upon section two hundred forty of the labor law; 15 coverage, and not any other provision of statutory or common law impos- 16 ing another or different or separate standard of care or duty to an 17 injured party. Such financial statement shall include the entirety of 18 such insurer's business activities insuring against risks occurring in 19 this state and shall be in a form determined by the superintendent. The 20 form shall be sufficiently itemized in a manner that allows for an actu- 21 arially sound analysis of the income realized by the insurer from all 22 sources during such year, including but not limited to premiums, invest- 23 ment income, and any other category or categories of income as deter- 24 mined by the superintendent to reflect the full disclosure requirements 25 of this section and that portion which may be specifically related to 26 such coverage. At a minimum, such information shall consist of the items 27 set forth in the statement of income, excluding the capital and surplus 28 account section of the property/casualty statutory annual statement, as 29 applicable to the insurer's New York state business, as well as the 30 other information delineated in this subsection. Such financial state- 31 ment shall also contain a comprehensive and detailed disclosure of the 32 insurer's expenses actually incurred and paid during such calendar year, 33 to include normal business expenses, salaries, commissions, consulting 34 fees, legal expenses, advertising costs and any other category deemed 35 pertinent to the intent of this section. At a minimum, the expense 36 information required shall consist of the items set forth in the under- 37 writing and investment exhibit - part 3 - expenses of the 38 property/casualty statutory annual statement, as applicable to the 39 insurer's New York state business. With respect to salaries (including 40 all other forms of compensation), each insurer shall itemize the salary 41 of the twenty most highly compensated employees of such insurer during 42 such year, provided that the names of such employees need not be 43 disclosed. Such financial statement shall also provide the public with 44 a synopsis of claims or settlements paid for section two hundred forty 45 of the labor law coverage pursuant to such policies or contracts, list- 46 ing the total of such claims and settlements attributable to such cover- 47 age. At a minimum, the claim information required shall consist of the 48 items set forth in the exhibit of premiums and losses of the 49 property/casualty statutory annual statement, as applicable to the 50 insurer's New York state business and identified and categorized sepa- 51 rately for each zip code in this state. Such financial statement shall 52 be signed and attested as full, complete and accurate by the chief exec- 53 utive officer of the insurer, and such chief executive officer shall be 54 held personally responsible with respect to the accuracy of the content 55 of such statement. The superintendent shall provide insurers with a 56 method to submit their financial statements electronically via the 
 S. 8200 4 1 internet, which method shall include instructions relating to the use of 2 an electronic signature which shall be subject to, and submitted in 3 accordance with section three hundred sixteen of this article; provided, 4 however, that no exception authorized in such section may be requested 5 or granted. 6 (c) On or before April first of each year, every insurer shall provide 7 the superintendent with detailed closed claim information for the same 8 insurance coverage as provided for in subsection (b) of this section for 9 the most recently concluded calendar year. Until the superintendent 10 promulgates data collection forms and procedures for the itemization 11 requirements, data shall be collected using, at a minimum, the most 12 recent publicly available forms required by law, or commonly used in the 13 insurance industry. The superintendent may require additional informa- 14 tion beyond that which may otherwise be currently required if the super- 15 intendent deems it necessary and warranted without the need to formally 16 adopt a rule or regulation provided such requirement is consistent with 17 the intent of this section. Such detailed claim data shall be signed and 18 attested as full, complete and accurate by the chief executive officer 19 of the insurer, and such chief executive officer shall be held 20 personally responsible with respect to the accuracy of the data. The 21 detailed claim data shall be submitted in the same manner as provided 22 for in subsection (b) of this section. 23 (d) The superintendent shall, in both written form and as part of the 24 department web site, make such financial statements and detailed claim 25 information available to the public. The detailed claim information 26 shall be provided in aggregate form for all insurers and separated by 27 specific insurer, combined without any identification of a specific 28 claim to a specific insurer. None of the publicly available detailed 29 claim information shall identify the individual insurer, defendant or 30 plaintiff, or representative of the same, associated with the claim. 31 Such financial statements and detailed claim information shall be deemed 32 a public document and no person shall be required to file a request for 33 such financial statements pursuant to article six of the public officers 34 law in order to receive a copy thereof, but upon request and payment of 35 the fee for copying such document, it shall be provided forthwith. With 36 respect to the electronic copy of such financial statements and detailed 37 claim information, which shall be accessible on the department's web 38 site, the department shall highlight the availability of such informa- 39 tion to the public on such web site, and the link to each insurer's 40 financial statement and the aggregated detailed claim information shall 41 be accessible in a simple and easy manner. Both the financial statement 42 and aggregated detailed claim information on the department's web site 43 shall be available in spreadsheet format, in addition to any other 44 format the superintendent determines is appropriate. Where summaries are 45 included, they shall be written in plain and simple English so that the 46 public at large can easily comprehend the data provided. 47 (e) On or before July first of each year, the superintendent shall 48 issue reports summarizing and explaining the information collected from 49 the financial statements and the detailed claim information and summa- 50 rizing the cost and other essential elements relevant to providing 51 section two hundred forty of the labor law coverage. Such report shall 52 further contain such recommendations the superintendent deems advisable 53 to encourage the utilization of risk management programs to be regularly 54 conducted by contractors to reduce premiums and provide workers with a 55 safer work environment, and any other steps contractors or real property 56 owners should utilize in furtherance of the same. The superintendent may 
 S. 8200 5 1 seek, and shall be entitled to receive, the aid and assistance of the 2 commissioner of labor and any other state or local governmental official 3 charged with responsibility for work site safety in preparing such anal- 4 ysis and recommendations. Copies of such reports shall be forwarded to 5 the temporary president of the senate, the speaker of the assembly and 6 the chairs of the senate and assembly insurance committees. Such reports 7 shall be public documents and shall be accessible both in paper copy and 8 on the department's web site in a similar fashion as provided for in 9 subsection (d) of this section. 10 (f) Where an insurer fails or refuses to provide the superintendent 11 with a full and complete disclosure as required by this section, the 12 superintendent shall take such action the superintendent deems necessary 13 to bring the insurer into full compliance. Such action may include impo- 14 sition of a civil penalty of up to fifty thousand dollars assessed 15 against the insurer for each violation, temporary suspension of any 16 right to issue additional policies or contracts until the insurer brings 17 itself into full compliance, an audit of the insurer's records by the 18 department or its designated representative to obtain the information 19 and which audit shall be paid for by the insurer, or any other civil 20 remedy the superintendent deems warranted or necessary until such insur- 21 er fully complies. In addition the officer whose signature is affixed to 22 such statement may be personally penalized to the same extent. 23 (g) The superintendent may promulgate such rules and regulations the 24 superintendent deems necessary for the proper administration of the 25 provisions of this section, and such rules and regulations may be 26 promulgated on an emergency basis if the superintendent warrants such 27 action to be necessary. 28 § 4. Severability. If any item, clause, sentence, subparagraph, subdi- 29 vision or other part of this act, or the application thereof to any 30 person or circumstances shall be held to be invalid, such holding shall 31 not affect, impair or invalidate the remainder of this act but it shall 32 be confined in its operation to the item, clause, sentence, subpara- 33 graph, subdivision or other part of this act directly involved in such 34 holding, or to the person and circumstances therein involved. 35 § 5. This act shall take effect on the first of January next succeed- 36 ing the date upon which it shall have become a law.