New York Gov. Kathy Hochul has signed two insurance-related laws on Tuesday, one allowing the sale of parametric policies covering weather-related events, and the second expanding eligibility for the state’s home insurance-focused Coastal Market Assistance (C-MAP) program.
The first law, which allows the sale of parametric policies against weather events, was developed at the request of the New York Department of Financial Services. It is expected to go into effect on Jan. 12.
Under that law, parametric policies will be based on the proximity and severity of the events as reported by a state or federal agency. It also requires the policies to be sold by licensed insurance agents and mandates the maintenance of consumer protection at a level similar to traditional personal line policies.
Insurers are also required to disclose that these parametric policies should not be used as substitutes for the more comprehensive property and flood insurance because they might not meet insurance requirements.
Trade group Professional Insurance Agents, New York chapter (PIANY), which welcomed the new law, said that the disclosures will be delivered at certain stages during the transaction, including during application, upon receipt of insurance coverage and upon renewal, to ensure that customers understand that these policies should not replace traditional insurance coverage.
In October, a survey suggested that the majority of New York City residents do not believe that their city is prepared for climate-related risks, with only 6% of the respondents saying they think the city is well prepared to tackle the issues of climate change.
Hochul also signed a law expanding the eligibility requirements for the state’s C-MAP program, which was created to help homeowners with hard-to-place policies.
Under the new law, the eligibility radius will now cover areas within one mile from the shoreline, including previously excluded freshwater shorelines. The distance will be measured from the mean high-water market, which PIANY said is a practical approach that accounts for changes to shorelines caused by climate change.
