State lawmakers in New York are weighing legislative language that could determine whether Governor Kathy Hochul’s proposed car insurance reforms ultimately deliver savings directly to drivers, as budget negotiations remain stalled over the plan.
The proposal has become a key point of discussion among legislators who are hesitant to fully support the initiative without stronger guarantees that any cost reductions achieved by insurers will be passed on to consumers.
“You see how the insurance companies are gonna end up making money from this. The question is how do we make sure that gets passed back to the consumers,” Senate Deputy Majority Leader Mike Gianaris said on The Capitol Pressroom.
The Queens Democrat said he raised the issue directly with representatives from the insurance industry, but their noncommittal response raised concerns. “If they are telling us the rates are going to go down, let’s just write that into the law,” he said. “Maybe that’s where we end up. I don’t know. The discussions are ongoing.”
The Hochul administration has argued that savings for drivers would be achieved through the state’s existing excess profits law, which allows regulators to review and potentially adjust insurance rate proposals when companies exceed defined profitability thresholds.
However, critics argue the mechanism may not be sufficient to guarantee meaningful savings, noting that the excess profits law is only triggered when a multi-year average rate of return surpasses 21 percent, a level they say may be too high to provide timely relief to drivers.
Governor Hochul has signaled some openness to revisiting the definition of excess profits, suggesting the threshold could be adjusted as negotiations over the broader budget framework continue.
