Dec 21 (Reuters) - New York Governor Andrew Cuomo on Wednesday issued a regulation making it easier for businesses to hire former convicts by prohibiting insurance companies from refusing coverage for crime-related losses caused by employees.
The regulation, the first of its kind in the United States, will help New York businesses obtain so-called commercial crime insurance when hiring employees with criminal records.
Commercial crime coverage, a standard type of business insurance, generally kicks in when companies sustain losses in situations that involve employee dishonesty, such as forgery, theft of a customer's property, or fraudulent transfer of funds through a company's computer.
Many insurers, however, typically view ex-convicts as too high a risk. That means New York businesses wanting to hire someone with a criminal record are often denied the coverage, said New York Department of Financial Services Superintendent Maria Vullo in a statement.
That practice has discouraged the state's businesses from hiring former convicts, Vullo said, despite their skills, and creates an "unfair barrier" to employment for the 2.3 million New Yorkers with criminal records.
New York's Department of Financial Services regulates banks and insurers that do business in the state.
The new regulation, effective July 1, 2017, allows businesses to obtain the coverage as long as they consider a set of factors in a New York law that applies to hiring people who have criminal convictions.
Businesses must consider, for example, whether a prior criminal offense is related to duties an employee will perform and the time that has passed since the conviction, among other factors, according to the rule. (Reporting by Suzanne Barlyn; Editing by Steve Olofsky)