NY State Senate Bill 2023-S9327A

Current Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 23, 2024	print number 9327a
May 23, 2024	amend and recommit to insurance
May 13, 2024	referred to insurance

Bill Amendments

Original

A (Active)

2023-S9327 - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §2504, Ins L; amd §2, Chap 602 of 2023

2023-S9327 - Summary

Authorizes the use of owner-controlled and contractor-controlled insurance for certain construction projects; requires the department of financial services to report on the use of such insurance.

2023-S9327 - Sponsor Memo

                                 
BILL NUMBER: S9327

SPONSOR: RYAN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to authorizing the use of
owner-controlled and contractor-controlled insurance; and to amend chap-
ter 602 of the laws of 2023, amending the insurance law relating to
exempting certain public construction projects from certain
restrictions, in relation to expanding a report on the use of owner-
controlled and contractor-controlled insurance

 
PURPOSE:

To expand the state and municipalities outside of New York City's abili-
ty to use owner-controlled and contractor-controlled or "wrap-up" insur-
ance.

 
SUMMARY OF PROVISIONS:

Section 1: amends paragraph 2 of subsection (a) of section 2504 of the
insurance law to make owner-controlled and contractor-controlled insur-

ance available for all public works projects in the state.

Section 2: expands the content of the report described in section 2 of
chapter 602 of the laws of 2023 to be consistent with the content of
section 2504 of the insurance law as amended in this legislation.

Section 3: effective date.

 
JUSTIFICATION:

Last year, a law went into effect authorizing public works projects in
New York City to utilize wrap-around insurance. This is because small
contractors, including many small businesses and MWBEs, often struggle
to find competitive insurance options that meet the standards required
for public construction projects, and these contractors have a more
difficult time obtaining affordable insurance. High insurance premiums
make these businesses less competitive as prime contractors and subcon-
tractors.

"Wrap-up" insurance helps solve this issue. An owner-controlled insur-
ance policy is a single policy held by the owner that covers the owner
and contractors of all levels for the entire project or group of
projects. A contractor-controlled insurance policy is held by the
construction manager or general contractor and covers the owner as well.

In a conventional project structure, in which many contractors provide
insurance to the public owner, disputes between different carriers over
liability and coverage consume considerable time and resources, escalat-
ing costs. In contrast, "wrap-up" insurance can provide more efficient
coverage through a single policy. Further, when a public owner imple-
ments a "wrap-up" policy, the owner is relieved of the burden of moni-
toring that each contractor maintains coverage if the project continues
beyond the length of an applicable policy.

This bill seeks to expanded the benefits afforded to New York City last
year to the entire state.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S9327 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9327
 
                             I N  S E N A T E
 
                               May 13, 2024
                                ___________
 
 Introduced  by  Sen.  RYAN  --  read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to authorizing the use of
   owner-controlled and contractor-controlled  insurance;  and  to  amend
   chapter  602  of the laws of 2023, amending the insurance law relating
   to  exempting  certain  public  construction  projects  from   certain
   restrictions,  in  relation to expanding a report on the use of owner-
   controlled and contractor-controlled insurance
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 2 of subsection (a) of section 2504 of the insur-
 ance  law,  subparagraphs (A) and (B) as amended and subparagraph (C) as
 added by chapter 602 of the laws of 2023, is amended to read as follows:
   (2) [In paragraph one hereof, "public corporation" and "public author-
 ity"] THE REQUIREMENTS OF PARAGRAPH ONE OF  THIS  SUBSECTION  shall  not
 include:
   (A)  a  public  corporation  or  public  authority created pursuant to
 agreement or compact with another state,
   (B) the [city] STATE of New York, A MUNICIPALITY, a public corporation
 or public authority, in connection with the construction  of  electrical
 generating  and  transmission facilities or construction, extensions and
 additions of light rail or heavy rail rapid transit and  commuter  rail-
 roads, or
   (C) the [city] STATE of New York, [the city] A school district [of the
 city of New York], [the New York city] AN industrial development agency,
 [the  New  York  city  health and hospitals corporation, or the New York
 city housing authority] A MUNICIPALITY, PUBLIC  AUTHORITY  OR  MUNICIPAL
 AUTHORITY,  in connection with a contract the principal purpose of which
 is construction that (i) has an estimated cost  of  no  less  than  five
 million  dollars  or  (ii)  is  subject to an owner-controlled insurance
 program for projects, provided that any contract undertaken pursuant  to
 this  subparagraph that has an estimated cost of five million dollars or
 more may only be undertaken pursuant to a  project  labor  agreement  as
 such term is defined in section two hundred twenty-two of the labor law.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15222-01-4
 S. 9327                             2
 
   § 2. Section 2 of chapter 602 of the laws of 2023, amending the insur-
 ance law relating to exempting certain public construction projects from
 certain restrictions, is amended to read as follows:
   §  2.  A  report shall be submitted no later than September 30, [2024]
 2025 and annually thereafter, to the governor, the  temporary  president
 of  the senate and the speaker of the assembly by the [city of New York]
 DEPARTMENT OF FINANCIAL SERVICES on behalf of [its] STATE agencies, [the
 New York city housing authority, the city school district of the city of
 New York, the New York city industrial development agency, and  the  New
 York  city  health  and hospitals corporation], SCHOOL DISTRICTS, INDUS-
 TRIAL  DEVELOPMENT  AGENCIES,  PUBLIC  AUTHORITIES,  MUNICIPALITIES  AND
 MUNICIPAL AUTHORITIES IN THE STATE containing information regarding each
 contract  subject  to  an  insurance program authorized pursuant to this
 act. Such report shall include for each contract awarded in the  preced-
 ing fiscal year:  a description of the project to be implemented by such
 contract;  information  regarding  the procurement process for each such
 contract, including the list of responding  entities  that  demonstrated
 the  general  capability  to  perform  such contract, to the extent such
 contract was awarded on a best-value basis or such a list  is  otherwise
 available; the total award value of each contract; and an explanation of
 the  estimated savings resulting from using owner-controlled or contrac-
 tor-controlled insurance in conjunction with such contract. Such  report
 shall  also include for each contract concluding in the preceding fiscal
 year:  a description of the dispute resolution processes used for insur-
 ance or liability disputes arising during such  contract's  performance,
 to the extent not legally privileged; the total cost of such contract; a
 comparative   description  of  work  site  safety  relative  to  similar
 construction projects not subject to  an  insurance  program  authorized
 under  this  act;  the  participation  rate of and total dollar value of
 monies paid to minority- and women-owned business enterprises,  emerging
 business  enterprises,  and locally-based business enterprises certified
 pursuant to section 1304  of  the  New  York  city  charter  under  such
 contracts, and a separate listing of the participation rate of and total
 dollar value of monies paid to minority- and women-owned business enter-
 prises, emerging business enterprises, and locally-based business enter-
 prises  for  projects using contractor-controlled insurance that cost no
 less than five million dollars and  no  more  than  twenty-five  million
 dollars.  ALL  STATE  AGENCIES, SCHOOL DISTRICTS, INDUSTRIAL DEVELOPMENT
 AGENCIES, PUBLIC AUTHORITIES, MUNICIPALITIES AND  MUNICIPAL  AUTHORITIES
 SHALL  PROVIDE  ALL  INFORMATION REQUIRED BY THE DEPARTMENT OF FINANCIAL
 SERVICES TO COMPLETE THE REPORT REQUIRED BY THIS ACT.
   § 3. This act shall take effect immediately.

2023-S9327A (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §2504, Ins L; amd §2, Chap 602 of 2023

2023-S9327A (ACTIVE) - Summary

Authorizes the use of owner-controlled and contractor-controlled insurance for certain construction projects; requires the department of financial services to report on the use of such insurance.

2023-S9327A (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9327A

SPONSOR: RYAN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to authorizing the use of
owner-controlled and contractor-controlled insurance; and to amend chap-
ter 602 of the laws of 2023, amending the insurance law relating to
exempting certain public construction projects from certain
restrictions, in relation to expanding a report on the use of owner-
controlled and contractor-controlled insurance

 
PURPOSE:

To expand the state and municipalities outside of New York City's abili-
ty to use owner-controlled and contractor-controlled or "wrap-up" insur-
ance.

 
SUMMARY OF PROVISIONS:

Section 1: amends section 2504 of the insurance law by adding a new
subparagraph (d) to subsection 2 to make owner-controlled and contrac-

tor-controlled insurance available for all public works projects in the
state.

Section 2: expands the content of the report described in section 2 of
chapter 602 of the laws of 2023 to be consistent with the content of
section 2504 of the insurance law as amended in this legislation.

Section 3: effective date.

 
JUSTIFICATION:

Last year, a law went into effect authorizing public works projects in
New York City to utilize wrap-around insurance. This is because small
contractors, including many small businesses and MWBEs, often struggle
to find competitive insurance options that meet the standards required
for public construction projects, and these contractors have a more
difficult time obtaining affordable insurance. High insurance premiums
make these businesses less competitive as prime contractors and subcon-
tractors.

"Wrap-up" insurance helps solve this issue. An owner-controlled insur-
ance policy is a single policy held by the owner that covers the owner
and contractors of all levels for the entire project or group of
projects. A contractor-controlled insurance policy is held by the
construction manager or general contractor and covers the owner as well.

In a conventional project structure, in which many contractors provide
insurance to the public owner, disputes between different carriers over
liability and coverage consume considerable time and resources, escalat-
ing costs. In contrast, "wrap-up" insurance can provide more efficient
coverage through a single policy. Further, when a public owner imple-
ments a "wrap-up" policy, the owner is relieved of the burden of moni-
toring that each contractor maintains coverage if the project continues
beyond the length of an applicable policy.

This bill seeks to expanded the benefits afforded to New York City last
year to the entire state.
 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DA 1E:

This act shall take effect immediately.

2023-S9327A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  9327--A
 
                             I N  S E N A T E
 
                               May 13, 2024
                                ___________
 
 Introduced  by  Sen.  RYAN  --  read twice and ordered printed, and when
   printed to be committed to the Committee  on  Insurance  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the insurance law, in relation to authorizing the use of
   owner-controlled  and  contractor-controlled  insurance;  and to amend
   chapter 602 of the laws of 2023, amending the insurance  law  relating
   to   exempting  certain  public  construction  projects  from  certain
   restrictions, in relation to expanding a report on the use  of  owner-
   controlled and contractor-controlled insurance
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 2 of subsection (a) of section 2504 of the insur-
 ance law, subparagraphs (A) and (B) as amended and subparagraph  (C)  as
 added by chapter 602 of the laws of 2023, is amended to read as follows:
   (2) In paragraph one hereof, "public corporation" and "public authori-
 ty" shall not include:
   (A)  a  public  corporation  or  public  authority created pursuant to
 agreement or compact with another state,
   (B) the city of New York, a public corporation or public authority, in
 connection with the construction of  electrical  generating  and  trans-
 mission  facilities  or  construction, extensions and additions of light
 rail or heavy rail rapid transit and commuter railroads, [or]
   (C) the city of New York, the city school district of the city of  New
 York, the New York city industrial development agency, the New York city
 health  and hospitals corporation, or the New York city housing authori-
 ty, in connection with a contract the  principal  purpose  of  which  is
 construction that (i) has an estimated cost of no less than five million
 dollars  or (ii) is subject to an owner-controlled insurance program for
 projects, provided that any contract undertaken pursuant to this subpar-
 agraph that has an estimated cost of five million dollars  or  more  may
 only be undertaken pursuant to a project labor agreement as such term is
 defined in section two hundred twenty-two of the labor law, OR
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD15222-02-4

 S. 9327--A                          2
 
   (D)  THE  STATE OF NEW YORK, A SCHOOL DISTRICT, AN INDUSTRIAL DEVELOP-
 MENT AGENCY, A MUNICIPALITY, A  PUBLIC    AUTHORITY,    OR  A  MUNICIPAL
 AUTHORITY, IN CONNECTION WITH A CONTRACT, THE PRINCIPAL PURPOSE OF WHICH
 IS  CONSTRUCTION,  THAT  IS    SUBJECT  TO AN OWNER-CONTROLLED INSURANCE
 PROGRAM FOR PROJECTS, PROVIDED THAT ANY CONTRACT UNDERTAKEN PURSUANT  TO
 THIS  SUBPARAGRAPH  MAY ONLY BE UNDERTAKEN PURSUANT TO A  PROJECT  LABOR
 AGREEMENT  AS SUCH TERM IS DEFINED IN SECTION TWO HUNDRED TWENTY-TWO  OF
 THE LABOR LAW.
   § 2. Section 2 of chapter 602 of the laws of 2023, amending the insur-
 ance law relating to exempting certain public construction projects from
 certain restrictions, is amended to read as follows:
   §  2.  A  report shall be submitted no later than September 30, [2024]
 2025 and annually thereafter, to the governor, the  temporary  president
 of  the senate and the speaker of the assembly by the [city of New York]
 DEPARTMENT OF FINANCIAL SERVICES on behalf of [its] STATE agencies, [the
 New York city housing authority, the city school district of the city of
 New York, the New York city industrial development agency, and  the  New
 York city health and hospitals corporation] SCHOOL DISTRICTS, INDUSTRIAL
 DEVELOPMENT  AGENCIES,  PUBLIC AUTHORITIES, MUNICIPALITIES AND MUNICIPAL
 AUTHORITIES IN THE STATE containing information regarding each  contract
 subject  to  an  insurance program authorized pursuant to this act. Such
 report shall include for each contract awarded in the  preceding  fiscal
 year:   a description of the project to be implemented by such contract;
 information regarding the procurement process for  each  such  contract,
 including  the list of responding entities that demonstrated the general
 capability to perform such contract, to the  extent  such  contract  was
 awarded on a best-value basis or such a list is otherwise available; the
 total  award value of each contract; and an explanation of the estimated
 savings resulting from using owner-controlled  or  contractor-controlled
 insurance  in  conjunction  with  such  contract. Such report shall also
 include for each contract concluding in the preceding fiscal  year:    a
 description  of  the  dispute resolution processes used for insurance or
 liability disputes arising during such contract's  performance,  to  the
 extent  not  legally  privileged;  the  total  cost  of such contract; a
 comparative  description  of  work  site  safety  relative  to   similar
 construction  projects  not  subject  to an insurance program authorized
 under this act; the participation rate of  and  total  dollar  value  of
 monies  paid to minority- and women-owned business enterprises, emerging
 business enterprises, and locally-based business  enterprises  certified
 pursuant  to  section  1304  of  the  New  York  city charter under such
 contracts, and a separate listing of the participation rate of and total
 dollar value of monies paid to minority- and women-owned business enter-
 prises, emerging business enterprises, and locally-based business enter-
 prises for projects using contractor-controlled insurance that  cost  no
 less  than  five  million  dollars  and no more than twenty-five million
 dollars. ALL STATE AGENCIES, SCHOOL  DISTRICTS,  INDUSTRIAL  DEVELOPMENT
 AGENCIES,  PUBLIC  AUTHORITIES, MUNICIPALITIES AND MUNICIPAL AUTHORITIES
 SHALL PROVIDE ALL INFORMATION REQUIRED BY THE  DEPARTMENT  OF  FINANCIAL
 SERVICES TO COMPLETE THE REPORT REQUIRED BY THIS ACT.
   § 3. This act shall take effect immediately.

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Senate Bill S9327A

Sponsored By

Current Bill Status - In Senate Committee Insurance Committee

Bill Amendments

2023-S9327 - Details

2023-S9327 - Summary

2023-S9327 - Sponsor Memo

2023-S9327 - Bill Text download pdf

2023-S9327A (ACTIVE) - Details

2023-S9327A (ACTIVE) - Summary

2023-S9327A (ACTIVE) - Sponsor Memo

2023-S9327A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S9327A

Share this bill

Sponsored By

Sean M. Ryan

Current Bill Status - In Senate Committee Insurance Committee

Bill Amendments

2023-S9327 - Details

2023-S9327 - Summary

2023-S9327 - Sponsor Memo

2023-S9327 - Bill Text download pdf

2023-S9327A (ACTIVE) - Details

2023-S9327A (ACTIVE) - Summary

2023-S9327A (ACTIVE) - Sponsor Memo

2023-S9327A (ACTIVE) - Bill Text download pdf

Comments