(Dewitt, New York, Mar. 27, 2017) - IIABNY is pleased that the Senate and Assembly agreed to reject the Governor’s budget proposal to substantially increase the penalties for violations of the Insurance Law. IIABNY has lobbied extensively over the past couple months against a proposal in the Governor’s budget that would dramatically hike penalties against insurance producers (agents and brokers) who violate the state's insurance law. Current law permits the New York State Department of Financial Services (DFS) to fine violators up to $1,000 per offence. The governor's budget would allow DFS to assess fines up to the greater of:

• $10,000 per offence
• Double the aggregate damages attributable to the violation
• Double the aggregate economic gain the individual made from the violation

IIABNY told the Legislature that the proposed increases were unwarranted, explaining that an agency that forgets to renew one of its four licenses may face a $10,000 fine for each policy it sells while the license is lapsed. Fines of this size could put a small agency out of business because of an oversight. Insurance agencies are busy counseling clients and helping them obtain the right coverage at a reasonable cost. Disproportionate penalties like these hurt consumers and business owners by reducing the number of trusted advisors they may have.

The Senate’s budget proposal completely rejects any increase in the current penalties under the Insurance Law. The Assembly’s budget does not reject increases outright, but makes a changes which exclude licensed insurance agents, brokers and adjustors from any increases.

Both the Senate and Assembly budget proposals also reject the proposals that would expand the DFS’ authority to sue violators of the insurance law, as well as authority to ban people from the insurance business for life.