Bill Text: NY A02504 | 2021-2022 | General Assembly | Introduced

Bill Title: Requires all motor vehicle insurers to file annual detailed financial and claim data statements with the superintendent of financial services; provides all such statements shall be made available to the public.

Spectrum: Partisan Bill (Democrat 13-0)

Status: (Introduced) 2021-01-19 - referred to insurance [A02504 Detail]

Download: New_York-2021-A02504-Introduced.html

                STATE OF NEW YORK


                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                    January 19, 2021

          -- M. of A.  BRAUNSTEIN, GALEF, LUPARDO, MAGNARELLI -- read  once  and
          referred to the Committee on Insurance

        AN  ACT  to  amend the insurance law, in relation to requiring all motor
          vehicle insurers to file  annual  financial  statements  and  detailed
          claim data with the superintendent of financial services

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. This act shall be known and may be cited as the "automobile
     2  insurance sunshine act".
     3    § 2. Legislative intent. The legislature  hereby  finds  and  declares
     4  that  insurance  companies  issuing motor vehicle policies in this state
     5  owe a duty to the consumers they insure and to  those  who  may  in  the
     6  future be insured by them, to fully disclose in a public and transparent
     7  manner  all elements relating to their financial condition and solvency.
     8  Automobile use and operation is a cornerstone of modern life;  in  fact,
     9  auto insurance is the only coverage most New Yorkers are required by law
    10  to  purchase.  New York's consumers have a right to know the details and
    11  specifics of the factors and circumstances behind the financial solvency
    12  of their insurer as well as the bases for the rates they are required to
    13  pay to retain their legally mandated coverage. The determination of auto
    14  insurance premiums in New York has, unfortunately, gone on too  long  in
    15  obscurity, with those who bear the premium rates unable to learn reasons
    16  why they are set where they are. As a matter of public trust, automobile
    17  liability  insurers  should  make  public the pertinent facts related to
    18  their premium determinations and financial solvency. It is the sense  of
    19  the legislature that this data should be disclosed in an open and public
    20  manner.
    21    §  3. The insurance law is amended by adding a new section 346 to read
    22  as follows:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 2504                             2

     1    § 346. Financial statement and detailed claim data to  be  filed  with
     2  the  department.    (a) For purposes of this section, the term "insurer"
     3  shall mean any person, corporation, association or other business entity
     4  authorized to issue a motor vehicle insurance policy in this state.
     5    (b) On or before April first of each year, every insurer shall provide
     6  the superintendent with a detailed financial statement to supplement and
     7  expand  upon the information contained in the statutory annual statement
     8  for the most recently concluded calendar year. The  financial  statement
     9  shall contain information on a combined basis for all lines of insurance
    10  as  well  as  information  separately for each of the following lines of
    11  insurance: (1) private passenger automobile other liability, (2) private
    12  passenger automobile personal injury protection, (3)  private  passenger
    13  automobile  physical  damage, (4) commercial automobile other liability,
    14  (5) commercial automobile personal injury protection, and (6) commercial
    15  automobile physical damage.  Such financial statement shall include  the
    16  entirety  of  its  business  activities  conducted  in  this  state,  or
    17  conducted outside this state, but having a nexus to  insurance  policies
    18  or  contracts  of  insurance  insuring  persons  or risks in this state,
    19  consistent with the procedures for determining New York state  insurance
    20  business  for statutory annual statement reporting purposes. Such state-
    21  ment shall be in a form determined by the superintendent. The form shall
    22  be sufficiently itemized in a manner  that  allows  for  an  actuarially
    23  sound  analysis  of  the income realized by the insurer from all sources
    24  during such year, including but  not  limited  to  premiums,  investment
    25  income,  profit from sale of assets and any other category or categories
    26  of income as determined  by  the  superintendent  to  reflect  the  full
    27  disclosure  requirements of this section. At a minimum, such information
    28  shall consist of the items set forth in the statement of income, exclud-
    29  ing the capital and surplus account  section  of  the  property/casualty
    30  statutory  annual  statement,  as  applicable  to the insurer's New York
    31  state business, as well as the  other  information  delineated  in  this
    32  subsection.  Such financial statement shall also contain a comprehensive
    33  and detailed disclosure of the insurer's expenses actually incurred  and
    34  paid  during  such  calendar  year, to include normal business expenses,
    35  salaries, commissions,  consulting  fees,  legal  expenses,  advertising
    36  costs  and  any  other  category  deemed pertinent to the intent of this
    37  section. At a minimum, the expense information required shall consist of
    38  the items set forth in the underwriting and investment exhibit - part  3
    39  -  expenses  of  the  property/casualty  statutory  annual statement, as
    40  applicable to the insurer's New York state  business.  With  respect  to
    41  salaries (including all other forms of compensation), each insurer shall
    42  itemize  the  salary  of the twenty most highly compensated employees of
    43  such insurer during such year, provided that the name of such  employees
    44  need  not  be disclosed. Such financial statement shall also provide the
    45  public with a synopsis of claims or settlements paid  pursuant  to  such
    46  policies  or contracts, listing the total of such claims and settlements
    47  by type of insurance or the risk insured. At a minimum, the claim infor-
    48  mation required shall consist of the items set forth in the  exhibit  of
    49  premiums and losses of the property/casualty statutory annual statement,
    50  as  applicable  to  the insurer's New York state business and identified
    51  and categorized separately for each zip code in this state.  Such finan-
    52  cial statement shall be signed and attested as full, complete and  accu-
    53  rate  by the chief executive officer of the insurer, and he or she shall
    54  be held personally responsible with  respect  to  the  accuracy  of  the
    55  content  of  such  statement.  The superintendent shall provide insurers
    56  with a method to submit their financial  statements  electronically  via

        A. 2504                             3

     1  the  internet,  which  method shall include instructions relating to the
     2  use of an electronic signature which shall be subject to, and  submitted
     3  in  accordance  with  section  three  hundred  sixteen  of this article;
     4  provided,  however,  that no exception authorized in such section may be
     5  requested or granted.
     6    (c) On or before April first of each year, every insurer shall provide
     7  the superintendent with detailed closed claim information for  the  same
     8  lines  of  insurance  provided for in subsection (b) of this section for
     9  the most recently concluded  calendar  year.  Until  the  superintendent
    10  promulgates  data  collection forms and procedures for private passenger
    11  automobile insurance, data shall be collected using, at a  minimum,  the
    12  most  recent  publicly  available  forms  used by the Insurance Research
    13  Council for its Auto Injury Survey. The superintendent may require addi-
    14  tional information beyond that which is contained in such survey  if  he
    15  or she deems it necessary and warranted.  Instead of collecting informa-
    16  tion  for all private passenger automobile claims the superintendent may
    17  collect data for a statistically valid sample  of  claims.  The  minimum
    18  sample  size shall represent five per centum of the number of claims for
    19  each year. Until the superintendent promulgates  data  collection  forms
    20  and  procedures  for  commercial  automobile  insurance,  data  shall be
    21  collected using information  which  may  be  available  from  any  other
    22  source. For commercial automobile claims, instead of collecting informa-
    23  tion  for  all  claims the superintendent may collect data for a statis-
    24  tically valid sample of claims. The minimum sample size shall  represent
    25  ten  per  centum  of the number of claims for each year for such line of
    26  insurance. Such detailed claim data shall  be  signed  and  attested  as
    27  full, complete and accurate by the chief executive officer of the insur-
    28  er,  and  he or she shall be held personally responsible with respect to
    29  the accuracy of the data. The detailed claim data shall be submitted  in
    30  the same manner as provided for in subsection (b) of this section.
    31    (d)  The superintendent shall, in both written form and as part of the
    32  department web site, make such financial statements and  detailed  claim
    33  information  available  to  the  public.  The detailed claim information
    34  shall be provided in aggregate form for all  insurers  combined  without
    35  any  identification  of  a specific claim to a specific insurer. None of
    36  the publicly available detailed claim  information  shall  identify  the
    37  individual  insurer,  defendant  or plaintiff associated with the claim.
    38  Such financial statements and detailed claim information shall be deemed
    39  a public document and no person shall be required to file a request  for
    40  such financial statements pursuant to article six of the public officers
    41  law  in order to receive a copy thereof, but upon request and payment of
    42  the fee for copying such document, it shall be provided. With respect to
    43  the electronic copy of such  financial  statements  and  detailed  claim
    44  information, which shall be accessible on the department's web site, the
    45  department  shall  highlight the availability of such information to the
    46  public on such web site, and the link to each insurer's financial state-
    47  ment and the aggregated detailed claim information shall  be  accessible
    48  in a simple and easy manner. Both the financial statement and aggregated
    49  detailed claim information on the department web site shall be available
    50  in  spreadsheet  format, in addition to any other format the superinten-
    51  dent determines is appropriate.
    52    (e) On or before July first of each  year,  the  superintendent  shall
    53  issue  reports summarizing and explaining the information collected from
    54  the financial statements and the detailed claim information.  Copies  of
    55  such  reports  shall  be  forwarded  to  the  temporary president of the
    56  senate, the speaker of the assembly and the chairs of  both  the  senate

        A. 2504                             4

     1  and  assembly  insurance  committees. Such reports shall be public docu-
     2  ments and shall be accessible both in paper copy and on the department's
     3  web site.
     4    (f)  Where  an  insurer fails or refuses to provide the superintendent
     5  with a full and complete disclosure as required  by  this  section,  the
     6  superintendent shall take such action he or she deems necessary to bring
     7  the insurer into full compliance.  Such action may include imposition of
     8  a  civil  penalty  of  up to fifty thousand dollars assessed against the
     9  insurer for each violation, temporary suspension of any right  to  issue
    10  additional  policies  or  contracts until the insurer brings itself into
    11  full compliance, an audit of the insurer's records by the department  or
    12  its  designated representative to obtain the information and which audit
    13  shall be paid for by the insurer, or any other civil remedy  the  super-
    14  intendent   deems  warranted  or  necessary  until  such  insurer  fully
    15  complies. In addition the officer whose signature  is  affixed  to  such
    16  statement may be personally penalized to the same extent.
    17    (g) The superintendent may promulgate such rules and regulations he or
    18  she  deems  necessary for the proper administration of the provisions of
    19  this section, and such rules and regulations may be  promulgated  on  an
    20  emergency  basis if the superintendent warrants such action to be neces-
    21  sary.
    22    § 4. Severability. If any item, clause, sentence, subparagraph, subdi-
    23  vision or other part of this act, or  the  application  thereof  to  any
    24  person  or circumstances shall be held to be invalid, such holding shall
    25  not affect, impair or invalidate the remainder of this act but it  shall
    26  be  confined  in  its  operation to the item, clause, sentence, subpara-
    27  graph, subdivision or other part of this act directly involved  in  such
    28  holding, or to the person and circumstances therein involved.
    29    § 5. This act shall take effect immediately.