Bill Text: NY A06911 | 2021-2022 | General Assembly | Introduced
Bill Title: Relates to unfair claim settlements after a natural disaster.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2022-05-04 - held for consideration in insurance [A06911 Detail]
Download: New_York-2021-A06911-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6911 2021-2022 Regular Sessions IN ASSEMBLY April 13, 2021 ___________ Introduced by M. of A. TANNOUSIS -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law, in relation to unfair claim settle- ments after a natural disaster The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 2601 of the insurance law, paragraph 4 of 2 subsection (a) as amended by chapter 547 of the laws of 1997, paragraph 3 5 of subsection (a) as amended by section 27 of part H of chapter 60 of 4 the laws of 2014 and paragraphs 6 and 7 as amended and paragraph 8 of 5 subsection (a) as added by chapter 458 of the laws of 2018, is amended 6 to read as follows: 7 § 2601. Unfair claim settlement practices; penalties. (a) No insurer 8 doing business in this state shall engage in unfair claim settlement 9 practices. Any of the following acts by an insurer, if committed without 10 just cause and performed with such frequency as to indicate a general 11 business practice, shall constitute unfair claim settlement practices, 12 provided, however, that in the event the governor has pursuant to 13 section twenty-nine-a of the executive law suspended any statute in this 14 chapter as a result of a state disaster emergency, such act shall 15 constitute an unfair claim settlement practice without respect to wheth- 16 er such act was indicative of a general business practice: 17 (1) knowingly misrepresenting to claimants pertinent facts or policy 18 provisions relating to coverages at issue; 19 (2) failing to acknowledge with reasonable promptness pertinent commu- 20 nications as to claims arising under its policies; 21 (3) failing to adopt and implement reasonable standards for the prompt 22 investigation of claims arising under its policies; 23 (4) not attempting in good faith to effectuate prompt, fair and equi- 24 table settlements of claims submitted in which liability has become 25 reasonably clear, except where there is a reasonable basis supported by EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10734-01-1A. 6911 2 1 specific information available for review by the department that the 2 claimant has caused the loss to occur by arson. After receiving a prop- 3 erly executed proof of loss, the insurer shall advise the claimant of 4 acceptance or denial of the claim within thirty working days; 5 (5) compelling policyholders to institute suits to recover amounts due 6 under its policies by offering substantially less than the amounts ulti- 7 mately recovered in suits brought by them; 8 (6) failing to promptly disclose coverage pursuant to subsection (d) 9 or subparagraph (A) of paragraph two of subsection (f) of section three 10 thousand four hundred twenty of this chapter; 11 (7) submitting reasonably rendered claims to the independent dispute 12 resolution process established under article six of the financial 13 services law; or 14 (8) artificially deflating or otherwise lowering cost data used for 15 adjusted claims, or using cost data that is not appropriate for the 16 region of the state where the loss occurred; this shall include but is 17 not limited to claims adjusted by a person issued a temporary permit 18 pursuant to subsection (n) of section two thousand one hundred eight of 19 this chapter[.]; or 20 (9) In addition to the foregoing, when the governor has declared a 21 state disaster emergency, the following practices shall be deemed unfair 22 claim settlement practices: 23 (A) attempting to settle a claim on the basis of a document that was 24 altered without notice to the consumer; 25 (B) making a material misrepresentation for the purpose of settling a 26 claim on less favorable terms than those provided in the policy; 27 (C) failing to promptly notify the insured of any additional informa- 28 tion necessary for the processing of the claim, as well as the reasons 29 why such information is necessary; 30 (D) failing to conduct an on-site inspection within seven business 31 days from submission of the claim; 32 (E) failing to provide the claimant with a copy of the adjuster's 33 report within three business days from the inspection; 34 (F) failing to provide a determination on the claim within thirty 35 calendar days from furnishing claimant with a copy of the report; and 36 (G) if damages are determined to be covered under the policy, failing 37 to pay at least twenty percent of the total claim upon such determi- 38 nation and the claim in full within thirty days of determination. 39 (b) Evidence as to numbers and types of complaints to the department 40 against an insurer and as to the department's complaint experience with 41 other insurers writing similar lines of insurance shall be admissible in 42 evidence in any administrative or judicial proceeding under this section 43 or article twenty-four or seventy-four of this chapter, but no insurer 44 shall be deemed in violation of this section solely by reason of the 45 numbers and types of such complaints. 46 (c) If it is found, after notice and an opportunity to be heard, that 47 an insurer has violated this section, each instance of noncompliance 48 with subsection (a) [hereof] of this section may be treated as a sepa- 49 rate violation of this section for purposes of ordering a monetary 50 penalty pursuant to subsection (b) of section one hundred nine of this 51 chapter. A violation of this section shall not be a misdemeanor. 52 § 2. The insurance law is amended by adding a new section 2601-a to 53 read as follows: 54 § 2601-a. Unfair claim settlement practices during state disaster 55 emergency; civil remedy. (a) In the event the governor has pursuant to 56 section twenty-nine-a of the executive law suspended any statute in thisA. 6911 3 1 chapter as a result of a state disaster emergency an insurer doing busi- 2 ness in this state shall be liable to the holder of a policy issued or 3 renewed pursuant to article thirty-four of this chapter for damages as 4 provided in this section upon such policy holder proving by a preponder- 5 ance of the evidence that such insurer's refusal to pay or unreasonable 6 delay in payment to the policy holder of amounts claimed to be due a 7 policy was not substantially justified. An insurer is not substantially 8 justified in refusing to pay or in unreasonably delaying payment when 9 the insurer: 10 (1) intentionally, recklessly or by gross negligence failed to provide 11 the policy holder with accurate information concerning policy provisions 12 relating to the coverage at issue; 13 (2) failed to effectuate in good faith a prompt, fair and equitable 14 settlement of a claim submitted by such policy holder in which liability 15 of such insurer to such policy holder was reasonably clear; 16 (3) failed to provide a written denial of a policy holder's claim with 17 a full and complete explanation of such denial, including references to 18 specific policy provisions wherever possible; 19 (4) failed to make a final determination and notify the policy holder 20 in writing of its position on both liability for, and the insurer's 21 valuation of, a claim within ninety days of the date on which it 22 received actual or constructive notice of the loss upon which the claim 23 is based; 24 (5) failed to act in good faith by compelling policy holder to insti- 25 tute suit to recover amounts due under its policy by offering substan- 26 tially less than the amounts ultimately recovered in suit brought by 27 such policy holder; or 28 (6) has engaged in any other unfair claim settlement practice as 29 defined in paragraph nine of subsection (a) of section two thousand six 30 hundred one of this article. 31 (b) Any policy holder who establishes liability pursuant to subsection 32 (a) of this section shall be entitled to recover, in addition to amounts 33 due under the policy, interest, costs, and disbursements, compensatory 34 damages and reasonable attorneys' fees incurred by the policy holder 35 from the date of the loss, in recovering monies due pursuant to the 36 terms of the policy. 37 (c) Any policy holder may recover damages from an insurer doing busi- 38 ness in this state pursuant to this section either as part of an action 39 to recover under the terms of an insurance policy or in a separate 40 action. 41 (d) In any trial of a cause of action asserted against an insurer 42 pursuant to this section, evidence of settlement discussions written and 43 verbal offers to compromise and other evidence relating to the claims 44 process shall be admissible. If causes of action relating to liability 45 of the insurer under the policy and under this section are alleged in 46 the same action, the court may bifurcate the trial of issues so as to 47 avoid prejudice to the insurer on the issue of liability under the poli- 48 cy and facilitate admissibility of evidence on the causes of action 49 asserted pursuant to this section. 50 (e) All amounts recovered from an insurer as actual damages and 51 reasonable attorneys' fees in any action authorized in this section 52 shall be excluded by the insurer in its determinations of the premiums 53 it will charge all policy holders on all policies issued by it. 54 § 3. This act shall take effect immediately.
