Governor Cuomo announces first in the nation regulation to prohibit insurance companies from denying coverage to businesses seeking to hire formerly incarcerated New Yorkers

Governor Andrew M. Cuomo today announced a new regulation to prohibit insurance companies from refusing to provide commercial crime insurance coverage to New York businesses that employ people with criminal convictions.

The effort – the first of its kind in the nation – will make it easier for businesses across the state to hire formerly incarcerated individuals upon reentry, and helping them obtain the necessary coverage for any loss or damage caused by an employee with a criminal record.

“This first-in-the-nation action will further break down artificial barriers that prevent previously incarcerated New Yorkers from obtaining work and turning their lives around,” Governor Cuomo said. “We are taking one more step to restore fairness and dignity to our society while also increasing public safety by providing opportunity and reducing recidivism.”

With 2.3 million people in New York with a criminal conviction on their record, this new regulation now ensures employers are able to obtain this coverage, provided that they considered a set of factors outlined in New York State law governing the hiring of people with criminal convictions. These factors include whether the offense is related to the duties that the employee will perform, the time that has passed since the conviction, and evidence of good conduct by the applicant.

Superintendent Maria T. Vullo said, “It is simply inexcusable for an insurer in New York to exclude a potentially valuable employee from insurance coverage just because he or she has a criminal conviction. So long as every business owner follows the letter of the law, we should encourage more companies to hire prospective employees rather than punish someone for a mistake in the past.”

Prior to this measure, businesses in New York that sought to hire individuals with criminal convictions often found that they could not obtain the required insurance coverage for such loss or damage. Without access to coverage, employers were discouraged from hiring these potential employees regardless of their set of job qualifications, and thus creating an unfair barrier to those seeking employment.

The new regulation, which was advanced and finalized by the New York State Department of Financial Services, is just the latest recommendation offered by Governor Cuomo’s Council on Community Reentry and Reintegration in support of criminal justice reform. Beginning last spring, the Governor’s Council engaged in a series of conversations with employers across the state about the challenges and rewards they experienced in hiring people with criminal convictions. The Council heard from business owners repeatedly about not having access to loss or damage insurance coverage for this group of employees. In many cases, not obtaining insurance coverage factors into employers’ decision-making process and may deter hiring these individuals altogether.

John S. Kiernan, President of the New York City Bar Association said, “We support and applaud the new regulation from Governor Cuomo and the Department of Financial Services with respect to commercial crime coverage exclusions. It will eliminate the catch-22 currently faced by employers trying to comply with state law but also to obtain the insurance they need to protect their businesses. Insurance Regulation 209 will increase employment opportunities and permit individuals with criminal records to turn their lives around, which is consistent with the state’s public policy and efforts to support our communities.”

Andrew Potash, Chairman of Distinguished and a Board Member of The Osborne Association, said, “Distinguished has long provided a wide variety of niche insurance products, and we support Governor Cuomo’s efforts to provide employers with commercial crime insurance that does not exclude coverage for individuals on the basis of their past criminal records. This is another step forward in eliminating discrimination against the millions of Americans with criminal records enabling them to more easily get jobs that will help re-integrate them into our society thus reducing the human and capital costs of recidivism.”

Sam Schaeffer, CEO of the Center for Employment Opportunities said, “An estimated 70 million Americans have a prior arrest or conviction record that often creates significant barriers to employment, housing, healthcare and other basic aspects of life. Thousands of employers across New York State are committed to hiring formerly incarcerated individuals. Governor Cuomo’s leadership has been invaluable in this effort and the new regulation to prohibit insurers from excluding coverage for loss or damage caused by an employee who has been convicted of a crime is another significant step forward to enable more employers to provide returning citizens with employment. This policy will enable countless individuals with past convictions to secure employment and lead fulfilling lives.”

JoAnne Page, President and CEO of the Fortune Society, said, “Fortune has always recognized the critical role employment plays in our clients’ journeys towards positive, self-sufficient living. But the road to finding a job for someone with a criminal history is filled with obstacles that can truly be insurmountable. Today, Governor Cuomo has taken an important and innovative step that will immediately remove a major barrier that prevents thousands of people every year from finding gainful employment. The Fortune Society applauds him for his vision and action.”

Source: The Official Website of New York State