NY Gov. Hochul vetoes ‘wrongful death’ legislation opposed by insurers

New York Gov. Kathy Hochul again vetoed legislation that would permit families of "wrongful death" victims to receive additional compensation for emotional suffering.

Hochul declined Friday to sign the Grieving Families Act for the second time this year. In a veto memo, the Democrat said she favors changing the statute but the bill lawmakers sent her had the “potential for significant unintended consequences.”

Her decision pleased the American Property Casualty Insurance Association, which lobbied against the bill. The APCIA claims the legislation would have resulted in "a major expansion of damages associated with wrongful death actions."

The bill would have allowed unlimited noneconomic damages, including damages for grief and anguish. Likewise, it would have expanded the people that could bring a wrongful death action, extended the statute of limitations for wrongful death actions, and it would have had a retroactive impact.

Hochul’s concerns include the possibility of increased insurance premiums for consumers and a risk to the financial well-being of public hospitals and other health care facilities. The APCIA agreed with the governor on the former point.

“While we greatly sympathize with those individuals who are dealing with the untimely loss of a loved one, we too were concerned with the potential unintended consequences of this legislation and the negative impact it could have on the affordability of many kinds of goods and services, including insurance,” said Kristina Baldwin, vice president, state government relations for APCIA.

Hefty potential cost for insurers

An actuarial analysis of the original version of this bill prepared by Milliman found that the bill could increase liability premiums by over $2.1 billion annually, the trade association pointed out.

“This major and unnecessary expansion of the current wrongful death compensation structure could have exponentially increased wrongful death awards and had a corresponding impact on the cost of goods and services,” said Baldwin. “As New York residents and businesses continue to struggle with rising costs and inflation, the last thing that they needed was to also have to pay more for goods and services resulting from skyrocketing wrongful death verdicts.”

A powerful backer of the bill, the New York State Trial Lawyers Association criticized Hochul for the veto, calling it a grave miscarriage of justice.

"This veto is an abject failure of leadership to grasp the impact of grief on loved ones, from young children who have lost a parent, to parents who have lost a child, to the families of victims of gun violence, to expectant families and communities of color," NYSTLA President David Scher said in a statement. "In New York, because of this veto, the value of a life sadly continues to be tied to the size of a person's paycheck. With this act, the governor has continued to side with business groups over the interests of those who elected her."

New York is one of just a few states that account only for economic loss in wrongful death lawsuits. Almost all states allow family members to be compensated for emotional loss. Similar legislation passed last year in Illinois over insurance industry objections.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.