Bill
A 9646
Establishes affordable liability insurance for voluntary foster care agencies via assigned risk plans, capped costs, and a Bridge Fund to offset rises.
Bill Overview
- Full Title: An Act to amend the insurance, social services, and state finance laws to address liability insurance for voluntary foster care agencies.
- Sponsor: Assemblymember Hevesi (with multiple co-sponsors listed).
- Purpose: Create a framework to ensure voluntary foster care agencies can access affordable liability insurance, establish a bridge fund to offset increased insurance costs, and adjust payment standards to reflect ongoing insurance cost growth.
Effective Date
- Immediate effective date for Parts A, B, and C, with specific implementation details governed by sections within each Part.
Key Provisions by Part
Part A – Liability Insurance in Assigned Risk Plans
- New Article 35 added to the Insurance Law: Participation in Assigned Risk Plans; Voluntary Foster Care Agencies
- 3501 Participation: All authorized insurers must participate in reasonable assigned risk plans, as created/administered by the Superintendent of Insurance in consultation with the Commissioner of the Office of Children and Family Services (OCFS). Purpose: equitably apportion applicants, including voluntary foster care agencies (VFCAs) as defined in social services law.
- 3502 Administration: The Superintendent, with OCFS, sets standards for insurers participating in the plan (timely policy issuance, certificates/endorsements, financial security forms, deposits) and establishes the application process for coverage.
- 3503 Coverage: Plans must meet minimum general liability coverage requirements for contracts with counties and provide:
- Professional liability coverage
- Sexual abuse and molestation coverage
- Plans must establish risk classification, territory-based rates, and base them on loss/expense experience.
Part B – Payment Standards for Liability Insurance Costs
- Amends Social Services Law (adding 398-a subdivision 7)
- 7(a): OCFS must establish standards of payment for liability insurance costs to ensure the maximum state aid rate reflects year-over-year increases in costs for VFCAs.
- From July 1, 2027 (for 2027-2028 rate year onward), standards must:
- Separate liability insurance costs from other administration costs
- Include a process for parameter increases that fully reflect growth in liability insurance costs
- 7(b): OCFS must create an application process for VFCAs to request rate adjustments if their costs increase and are not reflected in the currently effective rate.
Part C – Voluntary Foster Care Agency Insurance Bridge Fund
- State Finance Law adds Section 97-bbbbb: Voluntary Foster Care Agency Insurance Bridge Fund
- Establishes a fund in the custody of the State Comptroller and the Commissioner of Tax and Finance to support increased liability insurance costs for VFCAs.
- Fund sources: appropriations, transfers, with unencumbered/undelivered funds carried forward; interest stays in the fund.
- Use: Distribute funds to OCFS to offset higher liability insurance costs for VFCAs.
- Eligibility criteria (per Section 398-g of Social Services Law):
- Demonstrated increased liability insurance costs
- Foster care placements in 2024 and 2025
- Active license in good standing
- Required supporting documentation may include:
- Premium invoices, coverage dates
- Documentation of nonrenewal notices or quotes showing premiums
- Actual claim-related deductible costs and associated documentation
OCFS Process for Bridge Fund (Section 398-g)
- OCFS must establish a distribution process, including eligibility criteria and an application with a consolidated form no later than 90 days after the section’s effective date.
- Eligible agencies must demonstrate increased costs, placement history (2024-2025), and an active license.
- Documentation can include insurance invoices, nonrenewal notices, alternate carrier quotes, and claims-related deductible data.
Financial Implications
- A $20 million appropriation is authorized to fund the Bridge Fund (Section 3 of Part C).
- Funds are dedicated to offset increased liability insurance costs for VFCAs.
Potential Impact
- Improves access to liability insurance for voluntary foster care agencies by:
- Creating a structured risk-pool (assigned risk plan) with insurer participation
- Ensuring funding mechanisms reflect rising insurance costs through standardized payments and a dedicated bridge fund
- Providing OCFS-administered application processes and documentation to secure rate adjustments
- Agencies: Eligible VFCAs with active licenses and documented insurance cost increases could receive direct financial relief to maintain operations and compliance with insurance requirements.
- Counties/Contracting Entities: Benefit from standardized coverage requirements (professional and sexual abuse/misconduct liability) and predictable insurer participation.
Notes
- The act includes severability language, ensuring parts can be upheld independently if one provision is invalid.
- Several components hinge on the date-specific implementation in the final section of each Part.
Compiled from official sources — confirm details with the bill’s official record.
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