S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2245
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 15, 2025
                                ___________
 
 Introduced  by  M. of A. BRAUNSTEIN, SEAWRIGHT, TAPIA, BICHOTTE HERMELYN
   -- read once and referred to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to establishing  the  New
   York small contractor relief act; provides for the repeal upon expira-
   tion thereof; and making an appropriation therefor

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "New York small contractor relief act".
   § 2. The legislature hereby declares that the market for insurance for
 small  construction  contractors  and certified minority and women-owned
 construction contractors has been  challenged  both  by  high  insurance
 rates  and  a  lack  of  market capacity. These challenges are acute for
 small   construction   contractors,   and   minority   and   women-owned
 construction  contractors  working  for  public  owners.  This act shall
 provide for a private market insurance solution for  small  construction
 contractors,  and  minority  and  women-owned  construction  contractors
 through the creation of a captive insurance company.
   § 3. The insurance law is amended by adding a new article 70-A to read
 as follows:
                               ARTICLE 70-A
                   NEW YORK SMALL CONTRACTOR RELIEF ACT
 SECTION 7013. DEFINITIONS.
         7014. NEW YORK SMALL CONTRACTOR CAPTIVE INSURANCE COMPANY.
         7015. REINSURANCE AND RETROCESSION REINSURANCE.
         7016. NO REFUSAL.
         7017. RISK MANAGEMENT PROGRAM.
         7018. PREVAILING WAGE REQUIREMENT.
   § 7013. DEFINITIONS. FOR THE PURPOSE OF THIS  ARTICLE,  THE  FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04020-01-5
 A. 2245                             2
              

 
   (A)  "LIABILITY INSURANCE" SHALL MEAN PERSONAL INJURY LIABILITY INSUR-
 ANCE AND PROPERTY DAMAGE LIABILITY INSURANCE, AS SUCH TERMS ARE  DEFINED
 IN  PARAGRAPHS  THIRTEEN  AND  FOURTEEN OF SUBSECTION (A) OF SECTION ONE
 THOUSAND ONE HUNDRED THIRTEEN OF THIS CHAPTER,  AND  SHALL  INCLUDE  ANY
 TYPE  OF INSURANCE DEEMED BY THE SUPERINTENDENT OF FINANCIAL SERVICES TO
 BE SUBSTANTIALLY SIMILAR THERETO PURSUANT TO  PARAGRAPH  THIRTY-FOUR  OF
 SUBSECTION (A) OF SUCH SECTION.
   (B)  "SMALL  CONSTRUCTION  CONTRACTOR" SHALL MEAN ANY CONTRACTOR WHICH
 (I) IS RESIDENT IN THIS STATE; (II) IS INDEPENDENTLY OWNED AND OPERATED;
 (III) IS EXCLUSIVELY ENGAGED IN CONSTRUCTION CONTRACTING OR SUBCONTRACT-
 ING; (IV) HAD LESS THAN THREE MILLION DOLLARS IN GROSS REVENUES FOR  THE
 CALENDAR YEAR PRIOR TO AN APPLICATION FOR INSURANCE BEING FILED PURSUANT
 TO  THE TERMS OF THIS ARTICLE, OR IS A CERTIFIED MINORITY OR WOMEN-OWNED
 BUSINESS; AND (V) PAYS THE PREVAILING WAGE.
   (C) "PREVAILING WAGE" SHALL MEAN THE RATE OF  WAGES  AND  SUPPLEMENTAL
 BENEFITS PAID IN THE LOCALITY TO WORKERS IN THE SAME TRADE OR OCCUPATION
 AND  ANNUALLY  DETERMINED BY THE COMMISSIONER OF LABOR OR COMPTROLLER IN
 ACCORDANCE WITH THE PROVISIONS OF SECTION  TWO  HUNDRED  TWENTY  OF  THE
 LABOR LAW.
   §  7014.  NEW  YORK  SMALL CONTRACTOR CAPTIVE INSURANCE COMPANY. (A) A
 CAPTIVE INSURANCE COMPANY ORGANIZED PURSUANT TO THIS  ARTICLE  SHALL  BE
 FORMED  AND  REGULATED  PURSUANT TO THE PROVISIONS OF ARTICLE SEVENTY OF
 THIS CHAPTER. SUCH ENTITY MAY BE A  CORPORATION,  ASSOCIATION,  A  JOINT
 STOCK  COMPANY OR ASSOCIATION, OR AN AGGREGATION OR PARTNERSHIP PURSUANT
 TO THE LAWS OF THE STATE OF NEW YORK.
   (B) A CAPTIVE INSURANCE COMPANY MAY  BE  ORGANIZED  PURSUANT  TO  THIS
 ARTICLE FOR THE SOLE PURPOSE OF PROVIDING LIABILITY INSURANCE AS DEFINED
 IN  SUBSECTION (A) OF SECTION SEVEN THOUSAND THIRTEEN OF THIS ARTICLE TO
 SMALL CONSTRUCTION CONTRACTORS, AS THAT TERM IS  DEFINED  IN  SUBSECTION
 (A) OF SECTION SEVEN THOUSAND THIRTEEN OF THIS ARTICLE.
   §  7015. REINSURANCE AND RETROCESSION REINSURANCE. A CAPTIVE INSURANCE
 COMPANY ORGANIZED PURSUANT  TO  THIS  ARTICLE  SHALL  BE  AUTHORIZED  TO
 PURCHASE, AND THE NEW YORK STATE INSURANCE FUND (HEREINAFTER THE "FUND")
 SHALL  BE  AUTHORIZED AND DIRECTED, TO PROVIDE REINSURANCE AND RETROCES-
 SION REINSURANCE FOR SUCH CAPTIVE INSURANCE COMPANY, ON EITHER  A  QUOTA
 SHARE  ARRANGEMENT  OR FACULTATIVE ARRANGEMENT (HEREAFTER "REINSURANCE")
 AT A RATE TO BE DETERMINED BY THE BOARD OF  THE  FUND.  THE  FUND  SHALL
 PROVIDE  SUCH REINSURANCE ON AN APPLICATION FOR SUCH COVERAGE UNLESS, IN
 THE OPINION OF THE EXECUTIVE DIRECTOR, PROVIDING  SUCH  COVERAGE  ON  AN
 APPLICATION WILL IMPERIL THE FINANCIAL SAFETY AND SOUNDNESS OF THE FUND.
 THE  EXECUTIVE  DIRECTOR  OF  THE FUND SHALL PROVIDE, IN WRITING, TO THE
 BOARD OF THE FUND AND THE  SUPERINTENDENT  NOT  LESS  THAN  QUARTERLY  A
 REPORT  ON  ALL SUCH APPLICATIONS FOR COVERAGE THAT ARE DENIED, TOGETHER
 WITH THE GROUNDS FOR AND AN ANALYSIS OF THE BASIS FOR SUCH DENIAL.
   § 7016. NO REFUSAL.  A  SMALL  CONTRACTOR  CAPTIVE  INSURANCE  COMPANY
 ORGANIZED  PURSUANT  TO THIS ARTICLE SHALL NOT REFUSE TO ISSUE, RENEW OR
 CANCEL A POLICY OF ANY QUALIFIED  SMALL  CONSTRUCTION  CONTRACTOR  BASED
 UPON GEOGRAPHIC LOCATION OR LINE OF BUSINESS ENGAGED IN BY SUCH CONTRAC-
 TOR.
   § 7017. RISK MANAGEMENT PROGRAM. A CAPTIVE INSURANCE COMPANY ORGANIZED
 PURSUANT  TO  THIS ARTICLE SHALL ESTABLISH AND PROMOTE A RISK MANAGEMENT
 PROGRAM AMONG ITS MEMBERS TO IDENTIFY AND REDUCE RISKS BY IMPLEMENTATION
 OF LOSS CONTROL, SAFETY PROGRAMS AND OTHER METHODS OF  RISK  MANAGEMENT,
 AND  ANY  SMALL  CONSTRUCTION CONTRACTOR ACCEPTED FOR COVERAGE FROM SUCH
 INSURER SHALL BE  RESPONSIBLE  FOR  ADOPTING  AND  FOLLOWING  SUCH  RISK
 MANAGEMENT PROGRAM.
 A. 2245                             3
 
   §  7018.  PREVAILING WAGE REQUIREMENT. A SMALL CONSTRUCTION CONTRACTOR
 SEEKING TO OBTAIN LIABILITY INSURANCE FROM A  SMALL  CONTRACTOR  CAPTIVE
 INSURANCE COMPANY AUTHORIZED UNDER THIS ARTICLE SHALL ESTABLISH THAT THE
 SMALL  CONSTRUCTION  CONTRACTOR'S  ENTIRE  WORKFORCE  IS  BEING PAID THE
 PREVAILING  WAGE.  THE  SMALL  CONSTRUCTION CONTRACTOR'S APPLICATION FOR
 INSURANCE SHALL DOCUMENT AND  CERTIFY  THAT  THE  APPLICANT  MEETS  THIS
 REQUIREMENT  AND WILL MEET THIS REQUIREMENT FOR ALL CONSTRUCTION WORK ON
 ALL PROJECTS COVERED BY THE LIABILITY  INSURANCE  OBTAINED  PURSUANT  TO
 THIS  ARTICLE  AS  A  PRECONDITION TO QUALIFYING FOR LIABILITY INSURANCE
 ISSUED HEREUNDER. SUCH  APPLICATION  SHALL  ALSO  BE  SUBMITTED  TO  THE
 COMMISSIONER  OF  LABOR  WHO  SHALL  NOTIFY THE SMALL CONTRACTOR CAPTIVE
 INSURANCE COMPANY OF RECEIPT PRIOR TO APPROVAL OF SUCH APPLICATION.   AS
 A  CONDITION  OF  APPROVAL,  AT  LEAST TEN DAYS PRIOR TO COMMENCEMENT OF
 WORK, THE SMALL CONSTRUCTION CONTRACTOR  SHALL  NOTIFY  AND  UPDATE  THE
 CAPTIVE  INSURANCE  COMPANY  OF  ANY  LOCATION  WHERE  IT  IS PERFORMING
 CONSTRUCTION COVERED BY A POLICY ASSOCIATED WITH  THIS  ARTICLE.    SUCH
 LOCATIONS  SHALL  BE  PUBLICLY  POSTED ONLINE WITHIN TWO DAYS OF RECEIPT
 FROM THE SMALL CONSTRUCTION CONTRACTOR AND  MAINTAINED  BY  THE  CAPTIVE
 INSURANCE  COMPANY.    ALL SUCH WORK PERFORMED BY THE SMALL CONSTRUCTION
 CONTRACTOR SHALL BE SUBJECT TO THE PROVISIONS OF ARTICLE  EIGHT  OF  THE
 LABOR  LAW INCLUDING, BUT NOT LIMITED TO, SECTION TWO HUNDRED TWENTY AND
 TWO  HUNDRED  TWENTY-I  OF  SUCH  ARTICLE.    IN  THE  EVENT  THE  SMALL
 CONSTRUCTION  CONTRACTOR IS DETERMINED BY THE FISCAL OFFICER, AS DEFINED
 IN SECTION TWO HUNDRED TWENTY OF THE LABOR LAW, TO BE  IN  VIOLATION  OF
 ARTICLE  EIGHT  OF  THE  LABOR  LAW,  IN ADDITION TO ANY PENALTIES TO BE
 ENFORCED PURSUANT TO SUCH ARTICLE, THE CAPTIVE INSURANCE  COMPANY  SHALL
 REVOKE  SUCH  CONTRACTOR'S  POLICY PURSUANT TO THIS ARTICLE AND ASSESS A
 PENALTY EQUAL TO THE COSTS INCURRED  IN  PROVIDING  LIABILITY  INSURANCE
 COVERAGE SINCE ITS INITIAL APPLICATION WAS APPROVED.
   §  4.  Not  less than six months before the expiration date of article
 70-A of the insurance law, as added by this chapter, the  superintendent
 of  financial  services  shall issue to the governor, the speaker of the
 assembly and the temporary president of the senate, and  the  chairs  of
 the  insurance  and  labor  committees  of  each  house, a report on the
 performance of the New York small contractor relief act and  its  impact
 upon the small construction contractor sector. If such act is to expire,
 it shall not impede such captive insurance companies created under arti-
 cle  70-A  of  the  insurance  law  to  continue  to  operate  as if the
 provisions of such article were still in full force and effect, assuming
 that such companies are otherwise viable pursuant to the  provisions  of
 article 70 of the insurance law.
   §  5.  The sum of fifty million dollars ($50,000,000) is hereby appro-
 priated for the support of up to two captives  under  this  act.    Such
 funds  may  be  used  for  the  purpose of providing paid-in capital and
 initial surplus contributions for captives organized pursuant to article
 70-A of the insurance  law,  such  amounts  not  to  exceed  twenty-five
 million  dollars ($25,000,000) for any one captive insurer so organized.
 The New York state insurance fund is  authorized,  upon  action  of  its
 board  of  directors,  to  invest other funds as may be appropriate in a
 captive organized pursuant to article 70-A of the insurance law.
   § 6. This act shall take effect on the one hundred eightieth day after
 it shall have become a law and shall expire and be deemed repealed  five
 years after such effective date.