Bill Text: NY A02540 | 2021-2022 | General Assembly | Introduced

New York Assembly Bill 2540 (Prior Session Legislation)

Introduced

Bill Title: Provides that a liability insurer may be sued for and the plaintiff may recover compensatory damages where the insurer failed to effectuate prompt and fair settlement of the claim and considered its interests to the detriment of the insured so as to cause the rendering of a judgment in excess of the policy limits.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2022-01-05 - referred to insurance [A02540 Detail]

Download: New_York-2021-A02540-Introduced.html




                STATE OF NEW YORK
        ________________________________________________________________________

                                          2540

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                    January 19, 2021
                                       ___________

        Introduced  by  M.  of  A.  WEINSTEIN, SEAWRIGHT, ZEBROWSKI, CYMBROWITZ,
          HEVESI, HUNTER, GOTTFRIED, TAYLOR -- read once  and  referred  to  the
          Committee on Insurance

        AN  ACT to amend the insurance law, in relation to maintaining an action
          against a liability insurer seeking compensatory damages in excess  of
          the  policy  limits  where such insurer failed to engage in prompt and
          fair settlement of the claim

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

     1    Section  1.   Section 3420 of the insurance law is amended by adding a
     2  new subsection (b-1) to read as follows:
     3    (b-1) An action may also be maintained by the  persons  identified  in
     4  paragraphs  one, two and three of subsection (b) of this section against
     5  the insurer to recover damages including compensatory damages and inter-
     6  est measured from the time of failure to offer  a  fair  and  reasonable
     7  settlement  in  accordance  with  this section, from such insurer to the
     8  full extent of the judgment against the  insured,  not  limited  to  the
     9  policy limits and not subject to the limitations and conditions of para-
    10  graph  two  of  subsection (a) of this section, where a preponderance of
    11  the evidence establishes that the insurer failed to effectuate a  prompt
    12  and  fair  settlement of a claim or any portion thereof, and where under
    13  the totality of the facts and circumstances related to  the  claim,  the
    14  insurer  failed  to  reasonably  accord at least equal or more favorable
    15  consideration to its insured's interests as it did to its own interests,
    16  and thereby exposed the insured to a judgment in excess  of  the  policy
    17  limits.
    18    § 2. This act shall take effect immediately.


         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00029-01-1