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A02596 Summary:

MLTSPNSRColton, Cymbrowitz, Ortiz
Add Art 6 601 - 606, 2353 & 343, amd 2321, 2305, 3231 & 4308, Ins L; add Art 44-A 945 - 947, amd 149, Exec L; amd 202, St Ad Proc Act
Enacts the "automobile insurance consumer information act"; provides for automobile insurance consumer information and complaint ranking; creates office of public insurance consumer advocate and powers and duties therefor; makes related provisions.
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A02596 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Englebright (MS)
  TITLE OF BILL: An act to amend the insurance law, in relation to improving disclosure to automobile insurance consumers; and to amend the executive law, the insurance law and the state administrative procedure act, in relation to establishing an independent office of public insurance consumer advocate and establishing its powers and duties   PURPOSE OR GENERAL IDEA OF BILL: To enact reforms to protect consumers and reduce premiums, including creation of an Office of Insurance Consumer Advocate, making premium and complaint information available to consumers from the department of financial services, and allowing municipalities to petition for reductions in auto insurance rates.   SUMMARY OF PROVISIONS: *Establish an Office of Insurance Consumer Advocate (the "office") in the executive department to represent consumers in ratemaking and other matters *Establishes the position of Public Insurance Consumer Advocate ("the advocate") *Requires the superintendent of the department of financial services to maintain a database containing automobile insurance rate information and complaint rankings for all companies licensed to do business in the State *Requires the department to hold hearings when called for by the advo- cate *The office shall create an annual report with accounting for all funds received and disbursed by the office. *The office may assess the impact of insurer practices and insurance rates and advocate on behalf of positions that are most advantageous to a substantial number of insurance consumers. *Authorize municipalities to petition the department of financial services for rate changes; the department must hold a public hearing within 15 days of receipt of such petition *Requires auto insurance rate filings to include full statistical justi- fication and conform to standards of uniformity established by the Superintendent in regulation   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):   JUSTIFICATION: New York's special Task Force on Automobile Insurance was created to investigate the cost and availability of private passenger auto insur- ance in New York State, and to review the effectiveness of laws due to expire that year that regulate access to, and affordability of these policies. The task made findings and recommendations in its report: "Asleep at the Wheel, 1994-1998, NY's Move to the Top of the List in Auto Insurance Rates," (http://assembly.state.ny.us/Reports/Auto/199805/). Among the Task Force findings is that overly generous rate increases granted to New York auto insurers have led New York to the brink of becoming the most expensive state for auto insurance in the nation. The Task Force found that during the period 1990-1996, New York average auto insurance premiums jumped by 36%, while the costs of providing coverage went up by a mere 12% (countrywide premiums increased by only 20%, closely tracking an 18% rise in costs). With premiums rising faster than costs, insurer profits have soared. In 1996, New York insurers' profits on insurance transactions were twice as high as those of their counterparts in the rest of the country. Rankings released in March 1999 by the National Association of Insurance Commissioners show a disturbing continuance of these trends. For the second year in a row, New York is the second most expensive state in the nation for auto insurance, with rates 35% above the national average. At the same time, New York insurers are pocketing underwriting profits four times the national average, and profits on insurance transactions more than 150% above the national norm. Modeled on such an office in Texas, it is expected that this new office could match that state's experience, in which auto insurance consumers saved $549 million in 1997, $602 million in 1996, and $778 million in 1995. Aiming to reverse New York's move to the top of the list in auto rates, the Task Force developed a comprehensive package of reforms, which, when fully implemented, could save consumers over $1 billion on auto insur- ance premiums per year.   PRIOR LEGISLATIVE HISTORY: 1999-00 A6171 passed assembly 2001-02 A7324 referred to insurance 2003-04 A4126 referred to insurance 2005-06 A2663 referred to insurance 2007-08 A890 referred to insurance 2009-10 A1746 referred to insurance 2011-12 A3744 referred to insurance 2013-14 A1937 referred to insurance 2015-16 A5064 referred to insurance   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: This act shall take effect immediately.
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