New York Enacts Regulation Prohibiting Insurers From Refusing To Issue Commercial Crime Policies Based On Employee’s Criminal Record
01.31.17
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(Article from Insurance Law Alert, January 2017)
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The New York State Department of Financial Services has enacted a regulation that prohibits insurers from refusing to issue commercial crime policies to companies based on their employment of individuals with criminal records. Under N.Y. Comp. Codes R. & Regs. tit. 11, §76, “it would be an unfair method of competition or an unfair or deceptive act and practice in the conduct of the business of insurance in this state for an insurer that writes commercial crime insurance policies in this state to exclude coverage where the employer has weighed the factors set out in Correction Law Article 23-A and made a determination favorable to the employee.” Article 23-A, enacted to prevent discrimination based on prior criminal convictions, requires an employer to consider certain specific factors in deciding whether to hire an individual with a criminal record. The new regulation – the first of its kind in the country – aims to protect companies that have made good faith efforts to employ individuals who were previously incarcerated.