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Premium Change Explanations (Section 2356)
New York Insurance Law Section 2356 is titled “premium change explanations” and is designed to improve transparency for insureds when their insurance premiums increase at policy renewal for policies covering motor vehicles and real property used predominantly for residential purposes. The new law, which takes effect on August 24, 2026, can be found in full on the New York State Senate website.
Insurers should review the law in its entirety, but a summary of some key provisions include:
- Section 2356(a) requires authorized insurers to provide a notice accompanying a premium bill that includes the amount of the premium increase from the prior policy period and a written explanation for the premium increase, including the primary rating factors causing the premium increase, when the total premium increase is more than 10% (exclusive of any premium increase due to insured value added) for a policy covering a private passenger automobile policy, including motorcycles and motorhomes, and a policy covering real property used predominantly for residential purposes that consists of not more than four dwelling units, other than hotels and motels.
- Section 2356(b)(1) requires that for policies covering motor vehicles and real property used predominantly for residential, an authorized insurer must include a prominent notice accompanying the premium bill that states that “Policyholders receiving an increase to their premiums at renewal may request a written explanation, including the primary rating factors causing the increase, by contacting their insurers in writing” and must provide the insurer’s contact information. This provision does not apply when a notice is provided pursuant to subsection (a).
- Section 2356(b)(2) states that upon a policyholder’s written request at policy renewal, an authorized insurer must provide a written explanation for the increased premiums, including the primary rating factors causing the increase, for a policy described in subsection (b)(1), within 20 days of such request.
- Section 2356(c) gives examples of primary rating factors, such as individual claims history, policy changes, anticipated losses in the rating territory, and increased claims costs.
- Section 2356(d) requires an authorized insurer that reduces premiums for private passenger automobile insurance, including insurance for motorcycles and motorhomes, due to the reforms of the 2026-2027 state fiscal year budget, to give notice to the policyholder of the rate reduction and indicate that the reduction is due to the budget reforms.
FAQs about Premium Change Explanations (Section 2356)
Below are answers to industry questions submitted ahead of implementation. DFS will monitor compliance with Insurance Law Section 2356 as part of its market conduct examinations and data collection processes and may provide additional guidance in the future.
Q. Which types of policies are impacted by this new law?
A. Section 2356(a) applies to the following types of policies:
A private passenger automobile policy, including motorcycles and motorhomes, and a policy covering loss of or damage to real property used predominantly for residential purposes that consists of not more than four dwelling units, other than hotels and motels.
Section 2356(b) applies to policies covering commercial and private passenger motor vehicles, including motorcycles and motorhomes, “Nonowned, Hired and Garagekeepers” policies, and policies covering real property used predominantly for residential purposes, including condo master policies, businessowners policies, and commercial multi-peril policies. It also applies to an umbrella policy because the policy covers a motor vehicle.
Section 2356(d) applies only to policies covering private passenger automobiles, including motorcycles and motor homes.
Section 2356 does not apply to a general liability policy or a renter’s policy since such policies do not cover loss of or damage to real property.
Q. When do the new notice requirements take effect?
A. The new notice requirements take effect on August 24, 2026. Insurers should start providing the relevant notices with any renewal premium bills they mail or deliver on and after August 24, 2026.
Q. Must the primary rating factors for the premium increase be specific? What if there are multiple factors?
A. Yes. The primary rating factors for the premium increase must be specific enough so that the insured understands what factor(s) are causing the rate increase. If there are two or more factors, the insurer should include all those factors.
Q. Must an insurer provide the notification required by Insurance Law Section 2356(a) if the more than 10% premium increase is due to an increase in coverage?
A. Insurance Law Section 2356(a) refers to the premium increase of more than 10% as being "exclusive of any premium increase due to insured value added." Since an increase due to insured value added is not included when calculating the premium increase of more than 10%, an insurer is not required to send the notice required by Section 2356(a) when there is an increase in coverage because an increase in coverage is due to insured value added.
However, if the increase is more than 10% due to a factor other than insured value added (e.g., due to a motor vehicle accident), and there is also an increase to the premium due to insured value added (e.g., an increase in coverage), the insurer must send the notice required by Section 2356 (a) and should list both reasons as the primary factors. The insurer also should include the total amount of the premium increase for the policy.
Q. When must an insurer provide the notice required by Insurance Law Section 2356(b)(1) if the insured pays the premium in installments?
A. The insurer should provide this notice with the initial renewal premium bill and not with each subsequent premium installment bill.
Q. May an insurer deliver the notices required by Insurance Law Section 2356 by electronic means?
A. Yes. An insurer may deliver the notices by electronic means if the insured consents to electronic delivery and the insurer otherwise complies with Insurance Law Section 3458 (electronic notices and documents).
Q. Does the Insurance Law Section 2356(b)(1) notice requirement apply where a commercial policy covers risks in multiple states, the policyholder's principal place of business is outside New York, and the policy is neither issued nor delivered in New York?
A. Insurance Law Section 2302(a) states in relevant part that Insurance Law Article 23 applies to insurance “written on risks or operations in this state.” Therefore, the notice required by Insurance Law Section 2356(b)(1) applies to any policy covering motor vehicles principally garaged in this state, even if the policyholder’s principal business address is outside New York and the policy is neither issued nor delivered in New York.
Q. Does Insurance Law Section 2356 apply to excess line insurers?
A. No. Insurance Law Section 2356 does not apply to excess line insurers. Insurance Law Section 2302(a) states in relevant part that Insurance Law Article 23 applies to authorized insurers and Section 2356 makes no reference to excess line insurers.
Q. Do the notice requirements apply to policies in the free trade zone?
A. Yes. A free trade zone license only exempts an insurer from rate and form filing requirements. Insurers are still subject to all the other provisions of the Insurance Law pursuant to Insurance Law Section 6301(d).
Q. May an insurer mail or deliver the conditional renewal notice required by Insurance Law Section 3426(e) in lieu of the notice required by Insurance Law Section 2356(b)(1)?
A. No, an insurer may not mail or deliver the conditional renewal notice required by Insurance Law Section 3426(e) in lieu of the Section 2356(b)(1) notice. An insurer must mail or deliver both notices as applicable.