Enacts the "New York small contractor relief act"; defines terms; authorizes a small contractor captive insurance company to purchase, and the New York state insurance fund shall be authorized and directed to provide, reinsurance and retrocession reinsurance for such captive insurance company, on either a quota share arrangement or facultative arrangement at a rate to be determined by the board of the fund; provides that 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 contractor; makes related provisions.
The legislation proposes significant amendments to the insurance law, introducing a new framework for small contractor captive insurance companies. This includes regulations that prohibit insurance companies from refusing coverage based on geographic location or the specific line of work, promoting inclusivity within the construction sector. Furthermore, the bill mandates that contractors seeking insurance must adhere to prevailing wage requirements, thereby ensuring fair labor practices are maintained within the industry.
Bill A02245, known as the 'New York Small Contractor Relief Act', was introduced to address the challenges faced by small construction contractors, particularly minority and women-owned businesses, in securing affordable insurance. The bill proposes the establishment of a captive insurance company tailored specifically for these contractors, allowing them to better manage their insurance needs through a private market solution. By addressing the high insurance rates and limited market capacity, the bill aims to create a more viable business environment for these contractors.
There are notable points of contention regarding the implications of this legislation. Opponents may raise concerns about the financial sustainability of captive insurance companies, particularly regarding their ability to ensure adequate coverage without imposing excessive costs on small contractors. Additionally, the requirement for contractors to comply with prevailing wage laws could be a point of debate, as it may introduce complexities for companies that struggle to meet these criteria while remaining competitive.