STATE OF NEW YORK ________________________________________________________________________ 2130 2025-2026 Regular Sessions IN SENATE January 15, 2025 ___________ Introduced by Sen. RAMOS -- read twice and ordered printed, and when printed to be committed to the Committee on Finance 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: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "New York small contractor relief act". 3 § 2. The legislature hereby declares that the market for insurance for 4 small construction contractors and certified minority and women-owned 5 construction contractors has been challenged both by high insurance 6 rates and a lack of market capacity. These challenges are acute for 7 small construction contractors, and minority and women-owned 8 construction contractors working for public owners. This act shall 9 provide for a private market insurance solution for small construction 10 contractors, and minority and women-owned construction contractors 11 through the creation of a captive insurance company. 12 § 3. The insurance law is amended by adding a new article 70-A to read 13 as follows: 14 ARTICLE 70-A 15 NEW YORK SMALL CONTRACTOR RELIEF ACT 16 Section 7013. Definitions. 17 7014. New York small contractor captive insurance company. 18 7015. Reinsurance and retrocession reinsurance. 19 7016. No refusal. 20 7017. Risk management program. 21 7018. Prevailing wage requirement. 22 § 7013. Definitions. For the purpose of this article, the following 23 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
S. 2130 2 1 (a) "Liability insurance" shall mean personal injury liability insur- 2 ance and property damage liability insurance, as such terms are defined 3 in paragraphs thirteen and fourteen of subsection (a) of section one 4 thousand one hundred thirteen of this chapter, and shall include any 5 type of insurance deemed by the superintendent of financial services to 6 be substantially similar thereto pursuant to paragraph thirty-four of 7 subsection (a) of such section. 8 (b) "Small construction contractor" shall mean any contractor which 9 (i) is resident in this state; (ii) is independently owned and operated; 10 (iii) is exclusively engaged in construction contracting or subcontract- 11 ing; (iv) had less than three million dollars in gross revenues for the 12 calendar year prior to an application for insurance being filed pursuant 13 to the terms of this article, or is a certified minority or women-owned 14 business; and (v) pays the prevailing wage. 15 (c) "Prevailing wage" shall mean the rate of wages and supplemental 16 benefits paid in the locality to workers in the same trade or occupation 17 and annually determined by the commissioner of labor or comptroller in 18 accordance with the provisions of section two hundred twenty of the 19 labor law. 20 § 7014. New York small contractor captive insurance company. (a) A 21 captive insurance company organized pursuant to this article shall be 22 formed and regulated pursuant to the provisions of article seventy of 23 this chapter. Such entity may be a corporation, association, a joint 24 stock company or association, or an aggregation or partnership pursuant 25 to the laws of the state of New York. 26 (b) A captive insurance company may be organized pursuant to this 27 article for the sole purpose of providing liability insurance as defined 28 in subsection (a) of section seven thousand thirteen of this article to 29 small construction contractors, as that term is defined in subsection 30 (a) of section seven thousand thirteen of this article. 31 § 7015. Reinsurance and retrocession reinsurance. A captive insurance 32 company organized pursuant to this article shall be authorized to 33 purchase, and the New York state insurance fund (hereinafter the "fund") 34 shall be authorized and directed, to provide reinsurance and retroces- 35 sion reinsurance for such captive insurance company, on either a quota 36 share arrangement or facultative arrangement (hereafter "reinsurance") 37 at a rate to be determined by the board of the fund. The fund shall 38 provide such reinsurance on an application for such coverage unless, in 39 the opinion of the executive director, providing such coverage on an 40 application will imperil the financial safety and soundness of the fund. 41 The executive director of the fund shall provide, in writing, to the 42 board of the fund and the superintendent not less than quarterly a 43 report on all such applications for coverage that are denied, together 44 with the grounds for and an analysis of the basis for such denial. 45 § 7016. No refusal. A small contractor captive insurance company 46 organized pursuant to this article shall not refuse to issue, renew or 47 cancel a policy of any qualified small construction contractor based 48 upon geographic location or line of business engaged in by such contrac- 49 tor. 50 § 7017. Risk management program. A captive insurance company organized 51 pursuant to this article shall establish and promote a risk management 52 program among its members to identify and reduce risks by implementation 53 of loss control, safety programs and other methods of risk management, 54 and any small construction contractor accepted for coverage from such 55 insurer shall be responsible for adopting and following such risk 56 management program.
S. 2130 3 1 § 7018. Prevailing wage requirement. A small construction contractor 2 seeking to obtain liability insurance from a small contractor captive 3 insurance company authorized under this article shall establish that the 4 small construction contractor's entire workforce is being paid the 5 prevailing wage. The small construction contractor's application for 6 insurance shall document and certify that the applicant meets this 7 requirement and will meet this requirement for all construction work on 8 all projects covered by the liability insurance obtained pursuant to 9 this article as a precondition to qualifying for liability insurance 10 issued hereunder. Such application shall also be submitted to the 11 commissioner of labor who shall notify the small contractor captive 12 insurance company of receipt prior to approval of such application. As 13 a condition of approval, at least ten days prior to commencement of 14 work, the small construction contractor shall notify and update the 15 captive insurance company of any location where it is performing 16 construction covered by a policy associated with this article. Such 17 locations shall be publicly posted online within two days of receipt 18 from the small construction contractor and maintained by the captive 19 insurance company. All such work performed by the small construction 20 contractor shall be subject to the provisions of article eight of the 21 labor law including, but not limited to, section two hundred twenty and 22 two hundred twenty-i of such article. In the event the small 23 construction contractor is determined by the fiscal officer, as defined 24 in section two hundred twenty of the labor law, to be in violation of 25 article eight of the labor law, in addition to any penalties to be 26 enforced pursuant to such article, the captive insurance company shall 27 revoke such contractor's policy pursuant to this article and assess a 28 penalty equal to the costs incurred in providing liability insurance 29 coverage since its initial application was approved. 30 § 4. Not less than six months before the expiration date of article 31 70-A of the insurance law, as added by this chapter, the superintendent 32 of financial services shall issue to the governor, the speaker of the 33 assembly and the temporary president of the senate, and the chairs of 34 the insurance and labor committees of each house, a report on the 35 performance of the New York small contractor relief act and its impact 36 upon the small construction contractor sector. If such act is to expire, 37 it shall not impede such captive insurance companies created under arti- 38 cle 70-A of the insurance law to continue to operate as if the 39 provisions of such article were still in full force and effect, assuming 40 that such companies are otherwise viable pursuant to the provisions of 41 article 70 of the insurance law. 42 § 5. The sum of fifty million dollars ($50,000,000) is hereby appro- 43 priated for the support of up to two captives under this act. Such 44 funds may be used for the purpose of providing paid-in capital and 45 initial surplus contributions for captives organized pursuant to article 46 70-A of the insurance law, such amounts not to exceed twenty-five 47 million dollars ($25,000,000) for any one captive insurer so organized. 48 The New York state insurance fund is authorized, upon action of its 49 board of directors, to invest other funds as may be appropriate in a 50 captive organized pursuant to article 70-A of the insurance law. 51 § 6. This act shall take effect on the one hundred eightieth day after 52 it shall have become a law and shall expire and be deemed repealed five 53 years after such effective date.