New York's FAIR Business Practices Act: Impacts on Insurance

New York Governor Kathy Hochul has enacted the Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act, which will take effect in February 2026. This legislation aims to enhance New York's consumer protection statute, General Business Law (GBL) Section 349, by expanding the enforcement power of the New York Attorney General (NYAG). The focus on healthcare as a primary enforcement area serves as a critical point of interest for the insurance industry, underscoring the need for vigilance.

Under the Act, the prohibition on "deceptive acts or practices" now includes "abusive" and "unfair" acts. However, only the Attorney General can take action against unfair or abusive conduct, with a private right of action reserved for deceptive acts. This development fits with similar regulatory compliance requirements found in the Federal Trade Commission Act, despite not necessitating direct consumer harm.

The Act notably removes the “consumer-oriented” criterion, thereby allowing the Attorney General to target purely commercial activities without direct consumer involvement. It marks a significant expansion of Section 349's jurisdiction, permitting the NYAG to bring legal action against entities operating within New York, or those conducting business remotely in the state. Insurance companies should closely monitor these regulatory changes, ensuring compliance with evolving enforcement standards to mitigate potential risks.