Requires persons or entities providing benefits in the event of disability to not impose "onerous or unreasonable conditions" for the payment or continued payment of benefits thereunder, and provides for the enforcement thereof including actual damages, interest and penalties, reasonable costs and attorney's fees, and in the court's discretion, exemplary damages; exempts worker's compensation and NYS disability insurance.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1797
SPONSOR: Dinowitz
 
TITLE OF BILL:
An act to amend the general obligations law, in relation to onerous or
unreasonable conditions in the performance of disability related
contracts
 
PURPOSE OR GENERAL IDEA OF BILL:
The bill would require persons or entities providing benefits in the
event of disability to do so in good faith by not requiring onerous or
unreasonable conditions for payment of benefits and provides for
enforcement thereof.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the bill adds § 5-338 to the general obligations law to
prohibit any person, firm, association, corporation, or other entity,
regardless if such person or entity be an employer, excluding workers'
compensation or New York state disability insurance, who enters into a
written contract providing payment of benefits or the waivers of obli-
gations or both if the disability of a named individual shall, by
contract or otherwise, impose on a disabled person onerous or unreason-
able conditions for the payment or continued payment of contractual
benefits or the waiver or continued waiver of obligations. Conditions
are "onerous or unreasonable" if by their continuous or repetitious
nature they require the disabled beneficiary to perform unnecessary or
duplicative acts in order to obtain or collect the benefits to which he
or she is otherwise entitled under the contract and include but are not
limited to requiring the disabled person to undergo unreasonably repeti-
tive medical examinations, to provide finely-detailed or repetitious
medical documentation of a disabling condition, or bargaining in bad
faith or engaging in unfair claim settlement practices by performing any
acts described in subsection (a) of section two thousand six hundred one
of the insurance law. This section also allows any party to the contract
or the contract beneficiary who is injured by an action or failure to
act in violation of this section to maintain an action to recover
damages and allows the court to award exemplary damages.
Section two of the bill provides the effective date.
 
JUSTIFICATION:
The intent of this bill is to protect disabled persons from "bad faith"
practices which require the disabled person to undergo continuous
medical examinations and/or provide detailed and often repetitious
medical documentation of disabling conditions in order to receive
payment of benefits.
 
PRIOR LEGISLATIVE HISTORY:
2021-22: A.2191 - Judiciary
2019-20: A.3101-A - Third Reading Calendar/S.4026- Referred to Judiciary
2017-18: A.2651 - Third Reading Calendar/S.3283- Referred to Judiciary
2015-16: A.1923 - Third Reading Calendar/S.675- Referred to Judiciary
2013-14: A.315 - Passed Assembly/S.2696-Referred to Judiciary
2011-12: A.254 - Passed Assembly/S.1183-Referred to Judiciary
2009-10: A.535 - Passed Assembly/S.8201-Referred to Judiciary
2007-08: A.480 - Passed Assembly
2005-06: A.1118 - Passed Assembly/S.3127- Referred to Judiciary
2003-04: A.4825 - Passed Assembly
2001-02: A.375 - Passed Assembly
1999-00: A.299 - Passed Assembly 1997-98- A.437-B - Passed Assembly
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
1797
2023-2024 Regular Sessions
IN ASSEMBLY
January 23, 2023
___________
Introduced by M. of A. DINOWITZ, WEPRIN, SEAWRIGHT -- read once and
referred to the Committee on Judiciary
AN ACT to amend the general obligations law, in relation to onerous or
unreasonable conditions in the performance of disability related
contracts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general obligations law is amended by adding a new
2 section 5-338 to read as follows:
3 § 5-338. Performance of written contracts for benefits in the event of
4 disability. 1. No person, firm, association, corporation or other enti-
5 ty, whether such person or entity be an employer or otherwise, excluding
6 workers' compensation or New York state disability insurance, who enters
7 into a written contract providing for payment of benefits or the waiver
8 of obligations or both in the event of the disability of a named indi-
9 vidual shall, by contract or otherwise, impose on a disabled person
10 onerous or unreasonable conditions for the payment or continued payment
11 of contractual benefits or the waiver or continued waiver of obli-
12 gations. Conditions are "onerous or unreasonable" if by their contin-
13 uous or repetitious nature they require the disabled beneficiary to
14 perform unnecessary or duplicative acts in order to obtain or collect
15 the benefits to which he or she is otherwise entitled under the contract
16 and include but are not limited to:
17 (a) Requiring the disabled person to undergo unreasonably repetitive
18 medical examinations; or
19 (b) Requiring the disabled person to provide finely-detailed or repe-
20 titious medical documentation of a disabling condition; or
21 (c) Bargaining in bad faith or engaging in any of the acts described
22 in the paragraphs of subsection (a) of section two thousand six hundred
23 one of the insurance law, relating to unfair claim settlement practices.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00816-01-3
A. 1797 2
1 2. Any party to the contract or contract beneficiary injured by an
2 action or failure to act in violation of subdivision one of this section
3 may maintain an action to recover and, upon proof of such injury due to
4 violation of subdivision one of this section by a preponderance of the
5 evidence, shall recover actual damages, including any interest and
6 penalties incurred due to the violation of subdivision one of this
7 section, and reasonable costs and attorney's fees. The court may in its
8 discretion award exemplary damages.
9 § 2. This act shall take effect immediately.