Requires the superintendent to promulgate regulations which provide standardized definitions for commonly used terms and phrases in certain insurance policies.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7453
SPONSOR: Cahill TITLE OF BILL: An act to amend the insurance law, in relation to
requiring the superintendent of financial services to promulgate regu-
lations which provide standardized definitions for commonly used terms
and phrases in certain insurance policies
SUMMARY OF SPECIFIC PROVISIONS: This bill would require the Super-
intendent of Financial Services, within six months of the effective date
of this bill, to promulgate regulations which provide standardized defi-
nitions for commonly used terms and phrases found in homeowners policies
and commercial lines policies that provide coverage for loss or damage
to real property, personal property, or other liabilities for loss or
damage to property. Insurers would be required to use the standardized
terms and phrases in policies issued or delivered on or after the
date,the regulations are finalized, which would be no later than January
1, 2015. The bill would also allow insurers to use alternative defi-
nitions at the discretion of the Superintendent, so long as such defi-
nitions are not any less favorable to the policyholder or claimant than
those required under the regulations.
JUSTIFICATION: Homeowners and commercial insurance policies provide
necessary coverage to individuals and business owners that can prove
vital in the aftermath of a disaster such as Superstorm Sandy. However,
these policies can also be complex, and commonly used terms and phrases
may have different meanings when used in different policies. This can
cause confusion amongst policyholders, especially following a disaster
when they need their insurance coverage the most. This bill would
address this by ensuring that all homeowners policies and certain
commercial policies contain standardized terms and phrases.
PRIOR LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be deter-
mined.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK
________________________________________________________________________
7453
2013-2014 Regular Sessions
IN ASSEMBLY
May 17, 2013
___________
Introduced by M. of A. CAHILL -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to requiring the super-
intendent of financial services to promulgate regulations which
provide standardized definitions for commonly used terms and phrases
in certain insurance policies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 3425 of the insurance law is amended by adding a
2 new subsection (t) to read as follows:
3 (t) Within six months after the effective date of this subsection, the
4 superintendent shall promulgate regulations in accordance with section
5 two hundred two of the state administrative procedure act which provide
6 standardized definitions for commonly used terms and phrases in policies
7 that provide coverage for personal lines insurance as defined in para-
8 graph two of subsection (a) of this section. Such standardized terms and
9 phrases shall be used in such policies issued or delivered in this state
10 on or after the date the regulations are finalized, which shall be no
11 later than January first, two thousand fifteen. An insurer may use
12 alternative definitions, so long as such definitions are not any less
13 favorable to the policyholder or claimant, as determined by the super-
14 intendent.
15 § 2. Section 3426 of the insurance law is amended by adding a new
16 subsection (p) to read as follows:
17 (p) Within six months after the effective date of this subsection, the
18 superintendent shall promulgate regulations in accordance with section
19 two hundred two of the state administrative procedure act which provide
20 standardized definitions for commonly used terms and phrases in policies
21 that provide coverage for commercial lines insurance policies that cover
22 loss or damage to real property, personal property, or other liabilities
23 for loss or damage to property. Such standardized terms and phrases
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11159-02-3
A. 7453 2
1 shall be used in such policies issued or delivered in this state on or
2 after the date the regulations are finalized, which shall be no later
3 than January first, two thousand fifteen. An insurer may use alternative
4 definitions, so long as such definitions are not any less favorable to
5 the policyholder or claimant, as determined by the superintendent.
6 § 3. This act shall take effect immediately.
