S04049 Summary:

BILL NOS04049B
 
SAME ASNo Same As
 
SPONSORLANZA
 
COSPNSRADDABBO, AVELLA, BOYLE, PARKER, PERALTA, PERKINS, SQUADRON, STAVISKY
 
MLTSPNSR
 
Add S2601-a, Ins L
 
Establishes a civil private cause of action by a policyholder who has suffered unfair claim settlement practices by an insurer.
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S04049 Actions:

BILL NOS04049B
 
02/26/2015REFERRED TO INSURANCE
06/05/2015AMEND AND RECOMMIT TO INSURANCE
06/05/2015PRINT NUMBER 4049A
06/14/2015AMEND AND RECOMMIT TO INSURANCE
06/14/2015PRINT NUMBER 4049B
06/25/2015COMMITTEE DISCHARGED AND COMMITTED TO RULES
06/25/2015ORDERED TO THIRD READING CAL.1885
06/25/2015RECOMMITTED TO RULES
01/06/2016REFERRED TO INSURANCE
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S04049 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4049--B
 
                               2015-2016 Regular Sessions
 
                    IN SENATE
 
                                    February 26, 2015
                                       ___________
 
        Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
          printed to be committed to the Committee  on  Insurance  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to  said  committee  --  committee  discharged,  bill amended, ordered
          reprinted as amended and recommitted to said committee
 
        AN ACT to amend the insurance law, in relation to unfair  claim  settle-
          ment practices
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. The insurance law is amended by adding a new section 2601-a
     2  to read as follows:
     3    § 2601-a. Unfair claim settlement practices; civil remedy.    (a)  The
     4  holder  of a policy issued or renewed pursuant to article thirty-four of
     5  this chapter shall have a private right of action  against  any  insurer
     6  doing  business  in  this  state for damages as provided in this section
     7  upon such policyholder proving by a preponderance of the  evidence  that
     8  such  insurer's  refusal  to pay or unreasonable delay in payment to the
     9  policyholder of amounts claimed  to  be  due  under  a  policy  was  not
    10  substantially  justified.  An  insurer is not substantially justified in
    11  refusing to pay or in unreasonably delaying payment when the insurer:
    12    (1) failed to  provide  the  policyholder  with  accurate  information
    13  concerning policy provisions relating to the coverage at issue;
    14    (2)  failed  to  effectuate in good faith a prompt, fair and equitable
    15  settlement of a claim submitted by such policyholder in which  liability
    16  of such insurer to such policyholder was reasonably clear;
    17    (3)  failed to provide a written denial of a policyholder's claim with
    18  a full and complete explanation of such denial, including references  to
    19  specific policy provisions wherever possible;
    20    (4)  failed  to make a final determination and notify the policyholder
    21  in writing of its position on both liability for and the insurer's valu-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00077-04-5

        S. 4049--B                          2
 
     1  ation of a claim within six months of the  date  on  which  it  received
     2  actual or constructive notice of the loss upon which the claim is based;
     3    (5) failed to act in good faith by compelling a policyholder 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 policyholder;
     7    (6)  failed  to  advise  a policyholder that a claim may exceed policy
     8  limits, that counsel assigned  by  the  insurer  may  be  subject  to  a
     9  conflict  of  interest,  or that the policyholder may retain independent
    10  counsel;
    11    (7) failed to provide, on request of the policyholder or their  repre-
    12  sentative,  all reports, letters or other documentation arising from the
    13  investigation of a claim and evaluating liability for  or  valuation  of
    14  such claim;
    15    (8)  refused  to  pay a claim without conducting a reasonable investi-
    16  gation;
    17    (9) negotiated or settled a claim directly with a  policyholder  known
    18  to  be  represented  by  an attorney without the attorney's knowledge or
    19  consent. The provisions of this paragraph shall not be deemed to prohib-
    20  it routine inquiries to a policyholder to obtain details concerning  the
    21  claim;
    22    (10)  failed  to pay on one or more elements of a claim where there is
    23  no dispute as to liability notwithstanding the existence of disputes  as
    24  to  other  elements  of the claim where such payment can be made without
    25  prejudice to either party; or
    26    (11) acted in violation of section two thousand  six  hundred  one  of
    27  this article or any regulation promulgated pursuant thereto.
    28    (b)  Any policyholder who establishes liability pursuant to subsection
    29  (a) of this section shall be entitled to recover, in addition to amounts
    30  due under the policy, interest, costs  and  disbursements,  compensatory
    31  damages,  and  reasonable  attorneys'  fees incurred by the policyholder
    32  from the date of the loss, in recovering  monies  due  pursuant  to  the
    33  terms  of the policy, as well as such additional punitive damages as the
    34  court may allow on a showing that the  acts  giving  rise  to  liability
    35  occur with such frequency as to indicate a general business practice.
    36    (c)  Any  policyholder may recover damages from an insurer doing busi-
    37  ness in this state pursuant to this section either as part of an  action
    38  to  recover  under  the  terms  of  an insurance policy or in a separate
    39  action.
    40    (d) In any trial of a cause of  action  asserted  against  an  insurer
    41  pursuant to this section, evidence of settlement discussions written and
    42  verbal  offers  to  compromise and other evidence relating to the claims
    43  process shall be admissible. If causes of action relating  to  liability
    44  of  the  insurer  under the policy and under this section are alleged in
    45  the same action, the court may bifurcate the trial of issues  so  as  to
    46  avoid prejudice to the insurer on the issue of liability under the poli-
    47  cy  and  facilitate  admissibility  of  evidence on the causes of action
    48  asserted pursuant to this section.
    49    (e) All amounts recovered from an insurer as  damages  and  reasonable
    50  attorneys'  fees  in  any  action  authorized  in  this section shall be
    51  excluded by the insurer in its determinations of the  premiums  it  will
    52  charge all policyholders on all policies issued by it.
    53    (f)   Nothing   in   this  section  shall  be  construed  to  limit  a
    54  policyholder's right to a trial by jury for  any  claims  arising  under
    55  this section.

        S. 4049--B                          3
 
     1    §  2. This act shall take effect on the first of January next succeed-
     2  ing the date on which it shall have become a law, and shall apply to all
     3  acts and omissions by insurers occurring  on  or  after  such  effective
     4  date.
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