New York Assembly Bill A10065

New York 2025-2026 Regular Session

• Introduced: 1/30/26
• Refer: 1/30/26

Caption

Relates to authorizing the New York Liquidation Bureau to establish a reimbursement program for eligible local educational agencies

Summary

This bill would amend the New York insurance law to authorize the New York Liquidation Bureau, under the Department of Financial Services, to create a reimbursement program for eligible local educational agencies (LEAs). The program is aimed at public school districts and BOCES outside New York City that face monetary liabilities from civil claims or settlement agreements brought under the Child Victims Act, where the underlying conduct occurred during a period covered by a liability policy issued by an insurer that later became insolvent. To qualify, an LEA would need to show that the insurer was placed into liquidation, that the incident occurred while the policy was in force, that the LEA has a documented financial obligation, and that no other insurance or indemnification source is available. The bill also allows applications before final judgment and directs the superintendent to establish a fixed reimbursement amount from available estate assets. If those assets are insufficient, the bill requires a secondary reimbursement mechanism that may draw on reinsurer recoveries, subrogation, interest earnings, residual estate balances, and voluntary industry contributions, subject to law. The bill excludes educational entities in New York City and takes effect 120 days after becoming law.

Impact

The bill would create a new section 7438 of the insurance law and expand the authority of the New York Liquidation Bureau to administer reimbursements tied to insolvent insurers’ estates. It would affect public school districts and BOCES outside New York City by offering a potential source of recovery for Child Victims Act liabilities that otherwise might fall directly on local education budgets. It also directs the Bureau and superintendent to set eligibility criteria, reimbursement amounts, and hardship-prioritization rules, while potentially tapping additional estate-related or industry-related funds if estate assets are inadequate.

Sentiment

No committee transcript or recorded vote information was provided, so there is no direct evidence of debate or formal support/opposition in the materials supplied. Based on the bill text, the measure is framed as a remedial response to an identified funding gap affecting school systems and claimants, suggesting a policy rationale centered on fairness to LEAs and access to compensation for victims. The absence of voting history or hearing discussion means overall sentiment cannot be measured beyond the bill’s supportive legislative findings.

Contention

The main points of contention likely concern who should bear the cost of Child Victims Act settlements when the responsible insurer is insolvent, and whether the state should authorize a reimbursement mechanism that reaches beyond ordinary liquidation assets. Another likely issue is the bill’s exclusion of New York City educational entities, which may raise equity questions among similarly situated school systems. Potential concerns also include the use of reinsurer recoveries, residual estate funds, and voluntary industry contributions, as well as whether the program could affect insurer liquidation priorities or create precedent for state-backed relief in other insolvency contexts.