A new bill introduced in the New York State Assembly seeks to establish a New York State Catastrophe Fund Authority, which would provide reimbursement to insurers for a portion of their catastrophe-related losses.
According to a report from BestWire, the proposal, also known as Assembly Bill 9231, would allocate $10 million to launch the fund.
Also under the bill, all insurers writing covered property policies in the state would be required to enter into reimbursement contracts with the fund. In return, they would pay an annual premium based on collected premiums, estimated losses, and the desired level of coverage.
The fund would apply to insurers offering residential and commercial property coverage, including policies for mobile homes, farm owners, condominium associations, unit owners, and renters. Retention limits would initially range between $6 billion and $15 billion, adjusted annually in line with premium changes. Insurers would retain responsibility for any losses above or below those limits.
Covered events would include windstorms, including wind-born water damage, earthquakes, ice storms, and other natural disasters deemed a "major catastrophic event" by the governor.
The authority would have the power to issue revenue bonds and levy emergency assessments on insurers when necessary, the report said. The bill caps these assessments at 2% of an insurer’s gross written premium per event, which may increase to 4% if a state of emergency is declared. In cases involving three or more major events in a year, the total annual assessment could reach up to 10%.
According to the bill’s text, the fund aims to increase capacity, stabilize the market after major disasters, and reduce economic, health, and safety risks to the state.
The proposal comes as New York continues to face severe weather-related losses, including an October nor’easter that downed trees, damaged property, and caused widespread power outages.
The New York Insurance Association said it is still reviewing the legislation and did not provide immediate comment. Attempts to reach Assemblyman Steve Stern, who represents District 10 and sponsored the bill, were also unsuccessful.
In 2024, the five largest writers of homeowners multiple-peril insurance in New York, based on direct premiums written, were State Farm Group (14.09%), Allstate Insurance Group (12.90%), Chubb INA Group (11.80%), Travelers Group (6.82%), and Liberty Mutual Insurance Cos. (6.05%), according to BestLink data.
The bill is currently under review by the Assembly’s Insurance Committee, the report said.
