Bill Text: NY A03521 | 2013-2014 | General Assembly | Introduced
Bill Title: Enacts the abusive insurance practices remedy act"; enacts provisions relating to unfair claim settlement practices; provides that an insurer doing business in this state shall be liable to a policy holder for such insurer's refusal to pay or unreasonable delay of payment to the policy holder if such refusal or delay was not substantially justified; enumerates instances whereby an insurer's refusal or delay of payment is not substantially justified including intentional negligence, failure to act in good faith, failure to provide written denial of claim and failure to make final determination of claim within six months.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2014-01-08 - referred to insurance [A03521 Detail]
Download: New_York-2013-A03521-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
3521
2013-2014 Regular Sessions
I N A S S E M B L Y
January 28, 2013
___________
Introduced by M. of A. ROZIC -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to enacting the "abusive
insurance practices remedy act"
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "abusive insurance practices remedy act".
3 S 2. The insurance law is amended by adding a new section 2601-a to
4 read as follows:
5 S 2601-A. UNFAIR CLAIM SETTLEMENT PRACTICES; CIVIL REMEDY. (A) AN
6 INSURER DOING BUSINESS IN THIS STATE SHALL BE LIABLE TO THE HOLDER OF A
7 POLICY ISSUED OR RENEWED PURSUANT TO ARTICLE THIRTY-FOUR OF THIS CHAPTER
8 FOR DAMAGES AS PROVIDED IN THIS SECTION UPON SUCH POLICY HOLDER PROVING
9 BY A PREPONDERANCE OF THE EVIDENCE THAT SUCH INSURER'S REFUSAL TO PAY OR
10 UNREASONABLE DELAY IN PAYMENT TO THE POLICY HOLDER OF AMOUNTS CLAIMED TO
11 BE DUE UNDER A POLICY WAS NOT SUBSTANTIALLY JUSTIFIED. AN INSURER IS
12 NOT SUBSTANTIALLY JUSTIFIED IN REFUSING TO PAY OR IN UNREASONABLY DELAY-
13 ING PAYMENT WHEN THE INSURER:
14 (1) INTENTIONALLY, RECKLESSLY OR BY GROSS NEGLIGENCE FAILED TO PROVIDE
15 THE POLICY HOLDER WITH ACCURATE INFORMATION CONCERNING POLICY PROVISIONS
16 RELATING TO THE COVERAGE AT ISSUE;
17 (2) FAILED TO EFFECTUATE IN GOOD FAITH A PROMPT, FAIR AND EQUITABLE
18 SETTLEMENT OF A CLAIM SUBMITTED BY SUCH POLICY HOLDER IN WHICH LIABILITY
19 OF SUCH INSURER TO SUCH POLICY HOLDER WAS REASONABLY CLEAR;
20 (3) FAILED TO PROVIDE A WRITTEN DENIAL OF A POLICY HOLDER'S CLAIM WITH
21 A FULL AND COMPLETE EXPLANATION OF SUCH DENIAL, INCLUDING REFERENCES TO
22 SPECIFIC POLICY PROVISIONS WHEREVER POSSIBLE;
23 (4) FAILED TO MAKE A FINAL DETERMINATION AND NOTIFY THE POLICY HOLDER
24 IN WRITING OF ITS POSITION ON BOTH LIABILITY FOR, AND THE INSURER'S
25 VALUATION OF, A CLAIM WITHIN SIX MONTHS OF THE DATE ON WHICH IT RECEIVED
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05097-01-3
A. 3521 2
1 ACTUAL OR CONSTRUCTIVE NOTICE OF THE LOSS UPON WHICH THE CLAIM IS BASED;
2 OR
3 (5) FAILED TO ACT IN GOOD FAITH BY COMPELLING POLICY HOLDER TO INSTI-
4 TUTE SUIT TO RECOVER AMOUNTS DUE UNDER ITS POLICY BY OFFERING SUBSTAN-
5 TIALLY LESS THAN THE AMOUNTS ULTIMATELY RECOVERED IN SUIT BROUGHT BY
6 SUCH POLICY HOLDER.
7 (B) ANY POLICY HOLDER WHO ESTABLISHES LIABILITY PURSUANT TO SUBSECTION
8 (A) OF THIS SECTION AND THAT SUCH LIABILITY AROSE AS A RESULT OF INTEN-
9 TIONAL, RECKLESS OR GROSSLY NEGLIGENT CONDUCT BY THE INSURER OR AN
10 EXPRESS OR IMPLIED POLICY OF THE INSURER FOR PROCESSING CLAIMS SHALL BE
11 ENTITLED TO RECOVER PUNITIVE DAMAGES IN AN AMOUNT NOT MORE THAN THE
12 TOTAL AMOUNT RECOVERED IN THE ACTION.
13 (C) ANY POLICY HOLDER WHO ESTABLISHES LIABILITY PURSUANT TO SUBSECTION
14 (A) OF THIS SECTION SHALL BE ENTITLED TO RECOVER, IN ADDITION TO AMOUNTS
15 DUE UNDER THE POLICY, INTEREST, COSTS, AND DISBURSEMENTS, COMPENSATORY
16 DAMAGES AND REASONABLE ATTORNEYS' FEES INCURRED BY THE POLICY HOLDER
17 FROM THE DATE OF THE LOSS, IN RECOVERING MONIES DUE PURSUANT TO THE
18 TERMS OF THE POLICY.
19 (D) ANY POLICY HOLDER MAY RECOVER DAMAGES FROM AN INSURER DOING BUSI-
20 NESS IN THIS STATE PURSUANT TO THIS SECTION EITHER AS PART OF AN ACTION
21 TO RECOVER UNDER THE TERMS OF AN INSURANCE POLICY OR IN A SEPARATE
22 ACTION.
23 (E) IN ANY TRIAL OF A CAUSE OF ACTION ASSERTED AGAINST AN INSURER
24 PURSUANT TO THIS SECTION, EVIDENCE OF SETTLEMENT DISCUSSIONS, WRITTEN
25 AND VERBAL OFFERS TO COMPROMISE AND OTHER EVIDENCE RELATING TO THE
26 CLAIMS PROCESS SHALL BE ADMISSIBLE. IF CAUSES OF ACTION RELATING TO
27 LIABILITY OF THE INSURER UNDER THE POLICY AND UNDER THIS SECTION ARE
28 ALLEGED IN THE SAME ACTION, THE COURT MAY BIFURCATE THE TRIAL OF ISSUES
29 SO AS TO AVOID PREJUDICE TO THE INSURER ON THE ISSUE OF LIABILITY UNDER
30 THE POLICY AND FACILITATE ADMISSIBILITY OF EVIDENCE ON THE CAUSES OF
31 ACTION ASSERTED PURSUANT TO THIS SECTION.
32 (F) ALL AMOUNTS RECOVERED FROM AN INSURER AS ACTUAL DAMAGES AND
33 REASONABLE ATTORNEYS' FEES IN ANY ACTION AUTHORIZED IN THIS SECTION
34 SHALL BE EXCLUDED BY THE INSURER IN ITS DETERMINATIONS OF THE PREMIUMS
35 IT WILL CHARGE ALL POLICY HOLDERS ON ALL POLICIES ISSUED BY IT.
36 S 3. This act shall take effect on the first of January next succeed-
37 ing the date on which it shall have become a law, and shall apply to all
38 acts and omissions by insurers occurring on or after such date.
