New York State Assembly

 
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A02056 Summary:

A02056 Actions:

A02056 Committee Votes:

Committee:JUDICIARY   Chair:Lavine      
DATE:01/22/2025AYE/NAY:20/0  Action: Favorable refer to committee Rules        
Lavine
Aye
Tannousis
Aye
Weprin
Aye
Walsh
Aye
Braunstein
Aye
Brown
Aye
Steck
Aye
Mikulin
Excused
Seawright
Aye
Smith
Aye
Walker
Aye
Molitor
Aye
McMahon
Aye
Mitaynes
Aye
Rajkumar
Aye
Simon
Aye
Sayegh
Aye
Lunsford
Aye
Berger
Aye
Shimsky
Aye
Carroll
Aye

Committee:RULES   Chair:Glick      
DATE:01/22/2025AYE/NAY:29/0  Action: Favorable         
Heastie
Excused
Barclay
Aye
Pretlow
Aye
Hawley
Aye
Cook
Aye
Blankenbush
Aye
Glick
Aye
Ra
Aye
Dinowitz
Aye
Brabenec
Aye
Colton
Aye
Palmesano
Aye
Magnarelli
Aye
Reilly
Aye
Paulin
Aye
Smith
Aye
Peoples-Stokes
Aye
Jensen
Aye
Benedetto
Aye
Lavine
Aye
Lupardo
Aye
Braunstein
Aye
Davila
Excused
Hyndman
Aye
Rozic
Aye
Bronson
Aye
Hevesi
Aye
Hunter
Aye
Taylor
Aye
Cruz
Aye
Vanel
Aye

A02056 Floor Votes:

A02056 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A2056
 
SPONSOR: Hunter

 
TITLE OF BILL:
 
An act to amend the real property law, in relation to prohibiting mort-
gagees from requiring mortgagors of certain real property to purchase
flood insurance exceeding certain limits; and to amend a chapter of the
laws of 2024 amending the real property law relating to prohibiting
mortgagees from requiring mortgagors of certain real property to
purchase flood insurance exceeding certain limits, as proposed in legis-
lative bills numbers S. 7125-A and A. 5073-A, in relation to the effec-
tiveness thereof
 
 
PURPOSE:

The purpose of this bill is to amend Chapter 557 of the laws of 2024 to
effectuate the intent of the law.
 
 
SUMMARY OF PROVISIONS:
 
Section 1 provides for a technical amendment to clarify that the insur-
ance coverage must equal the lesser of the property's replacement value
or the remaining mortgage balance at the start of the policy year.
 
Section 2 amends the effective date from immediately to 90 days.
 
 
JUSTIFICATION:
 
This chapter amendment would limit a homeowner's requirements when
purchasing compulsory flood insurance and provide notice of the minimum
insurance liability that is required. The homeowner's insurance coverage
must equal the lesser of the property's replacement value or•the remain-
ing mortgage balance at the start of the policy year. This transparency
ensures homeowners are not burdened by additional coverage by insurance
companies and banks when mandated to purchase flood insurance.

Additionally, in notifying the homeowner of minimum flood insurance
requirements, the notice would include a statement informing the home-
owner that minimum flood insurance may not cover the full value of the
home or the belongings inside. Homeowners are encouraged to purchase
additional insurance if they desire greater coverage.
 
 
LEGISLATIVE HISTORY:
 
New bill.
 
 
FISCAL IMPLICATIONS:
 
Undetermined.
 
 
EFFECTIVE DATE:
This act shall take effect immediately; provided, however, that section
one of this act shall take effect on the same date and in the same
manner as a chapter of the laws of 2024 amending the real property law
relating to prohibiting mortgagees from requiring mortgagors of certain
real property to purchase flood insurance exceeding certain limits, as
proposed in legislative bills numbers S.  7125-A and A. 5073-A, takes
effect.

A02056 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          2056
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 14, 2025
                                       ___________
 
        Introduced by M. of A. HUNTER -- read once and referred to the Committee
          on Judiciary
 
        AN  ACT to amend the real property law, in relation to prohibiting mort-
          gagees from requiring mortgagors of certain real property to  purchase
          flood  insurance  exceeding  certain limits; and to amend a chapter of
          the laws of 2024 amending the real property law relating to  prohibit-
          ing  mortgagees  from requiring mortgagors of certain real property to
          purchase flood insurance exceeding  certain  limits,  as  proposed  in
          legislative  bills numbers S. 7125-A and A. 5073-A, in relation to the
          effectiveness thereof
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 283 of the real property law, as added by a chapter
     2  of the laws of 2024 amending the real property law relating to prohibit-
     3  ing  mortgagees  from  requiring  mortgagors of certain real property to
     4  purchase flood insurance exceeding certain limits, as proposed in legis-
     5  lative bills numbers S. 7125-A and A. 5073-A,  is  amended  to  read  as
     6  follows:
     7    §  283. Limits on amount of flood insurance required by mortgagee.  No
     8  mortgagee shall  require  a  mortgagor  to  whom  the  mortgagee  makes,
     9  increases,  extends,  or  renews  any  loan or line of credit secured by
    10  improved residential real property to purchase or pay for  flood  insur-
    11  ance  on  such residential real property:  (1) at a coverage amount that
    12  exceeds the lesser of the replacement  value  of  the  residential  real
    13  property  or the outstanding principal mortgage balance as of the begin-
    14  ning of the year for which the policy shall be in effect;  or  (2)  that
    15  includes  coverage  for  contents.  In  each  instance where a mortgagee
    16  requires a mortgagor to purchase or pay  for  flood  insurance  on  such
    17  residential  real  property,  the  mortgagee shall provide notice to the
    18  mortgagor at the time the mortgagee is notified of the need to  purchase
    19  or  pay  for  flood  insurance  that  states  the following in clear and
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02840-02-5
        A. 2056                             2
 
     1  conspicuous print: ['Please note that the] 'The flood insurance  we  are
     2  requiring  you  to purchase [will only protect your creditor or lender's
     3  interest in your property. The insurance] may not be sufficient  to  pay
     4  for  many  needed  repairs  after a flood and may not compensate you for
     5  your losses in the property due to the flood. If  you  wish  to  protect
     6  your  home  or investment, you may wish to purchase more flood insurance
     7  than the amount we are requiring you to buy.'
     8    § 2. Section 2 of a chapter of the laws  of  2024  amending  the  real
     9  property  law  relating to prohibiting mortgagees from requiring mortga-
    10  gors of certain real property  to  purchase  flood  insurance  exceeding
    11  certain  limits,  as proposed in legislative bills numbers S. 7125-A and
    12  A. 5073-A, is amended to read as follows:
    13    § 2. This act shall take effect [immediately]  on  the  ninetieth  day
    14  after it shall have become a law.
    15    §  3.  This act shall take effect immediately; provided, however, that
    16  section one of this act shall take effect on the same date  and  in  the
    17  same  manner as a chapter of the laws of 2024 amending the real property
    18  law relating to prohibiting  mortgagees  from  requiring  mortgagors  of
    19  certain  real  property  to  purchase  flood insurance exceeding certain
    20  limits, as proposed in  legislative  bills  numbers  S.  7125-A  and  A.
    21  5073-A, takes effect.

A02056 LFIN:

 
NO LFIN

A02056 Chamber Video/Transcript: