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S00166 Summary:

BILL NOS00166A
 
SAME ASSAME AS A06010-A
 
SPONSORRAMOS
 
COSPNSRCOMRIE, GALLIVAN, HARCKHAM, HOYLMAN-SIGAL, KRUEGER, PALUMBO, RIVERA, SALAZAR, SERRANO, STAVISKY
 
MLTSPNSR
 
Add §2601-a, amd §3425, Ins L
 
Relates to claim settlement practices when an insurer refuses to pay or is delaying payment of a settlement; provides a policyholder a private right of action against such insurer doing business in the state who has refused or delayed payment of an insurance claim.
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S00166 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         166--A
 
                               2025-2026 Regular Sessions
 
                    IN SENATE
 
                                       (Prefiled)
 
                                     January 8, 2025
                                       ___________
 
        Introduced  by  Sens.  RAMOS,  COMRIE, HARCKHAM, HOYLMAN-SIGAL, KRUEGER,
          PALUMBO, RIVERA, SALAZAR, SERRANO, STAVISKY -- read twice and  ordered
          printed,  and  when printed to be committed to the Committee on Insur-
          ance -- 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.  This  act  shall  be  known and may be cited as the "fair
     2  insurance settlement practice act (FISPA)".
     3    § 2. The insurance law is amended by adding a new  section  2601-a  to
     4  read as follows:
     5    § 2601-a. Unfair claim settlement practices.  (a) Unfair claim settle-
     6  ment  practices.  For  the  purposes  of  this section, an unfair claims
     7  settlement practice shall consist of any of the following acts or  omis-
     8  sions:
     9    (1)  misrepresenting  or  omitting pertinent facts or insurance policy
    10  provisions relating to the coverage at issue, including but not  limited
    11  to,  in  connection  with  litigation, failing to disclose all available
    12  coverage amounts in compliance with subdivision (f)  of  section  thirty
    13  one hundred one of the civil practice law and rules;
    14    (2)  failing  to acknowledge and act reasonably promptly upon communi-
    15  cations with respect to claims arising under insurance policies;
    16    (3) failing to adopt and implement reasonable standards for the prompt
    17  investigation of claims arising under insurance policies;
    18    (4) refusing to pay claims without conducting  a  reasonable  investi-
    19  gation based upon all available information;
    20    (5)  failing  to affirm or deny coverage of claims within a reasonable
    21  time after proof of loss statements have been completed;
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00680-02-5

        S. 166--A                           2
 
     1    (6) failing to effectuate prompt, fair and  equitable  settlements  of
     2  claims in which liability has become reasonably clear;
     3    (7) compelling insureds to institute litigation to recover amounts due
     4  under  an  insurance  policy  by  offering  substantially  less than the
     5  amounts ultimately recovered in actions brought by such insureds;
     6    (8) attempting to settle a claim for less than the amount to  which  a
     7  reasonable person would have believed they were entitled by reference to
     8  written  or printed advertising material accompanying or made part of an
     9  application;
    10    (9) attempting to settle claims on the basis of an  application  which
    11  was altered without notice to, or knowledge or consent of, the insured;
    12    (10)  making  claims payments to insured or beneficiaries not accompa-
    13  nied by a statement setting forth the coverage under which payments  are
    14  being made;
    15    (11)  making  known to insured or claimants a policy of appealing from
    16  arbitration awards in favor of insureds or claimants for the purpose  of
    17  compelling  them  to  accept  settlements  of  compromises less than the
    18  amount awarded in arbitration;
    19    (12) delaying the investigation or payment of claims by requiring that
    20  an insured or claimant, or the physician of either, submit a preliminary
    21  claim report and then requiring  the  subsequent  submission  of  formal
    22  proof of loss forms, both of which submissions contain substantially the
    23  same information;
    24    (13)  failing  to  settle  claims promptly, where liability has become
    25  reasonably clear, under one portion of the insurance policy coverage  in
    26  order  to  influence  settlements  under other portions of the insurance
    27  policy coverage; or
    28    (14) failing to promptly provide a reasonable explanation of the basis
    29  in the insurance policy in relation to the facts or applicable  law  for
    30  denial of a claim or for the offer of a compromise settlement.
    31    (b)  Enforcement.  (1) Any person who has been injured or whose rights
    32  are affected by the use or employment by an insurer of any  method,  act
    33  or practice declared to be unlawful by this section, may, in addition to
    34  any  other cause of action authorized by law, bring an action in supreme
    35  court for damages and equitable relief, including an injunction, or  any
    36  other  remedy as the court deems to be necessary and proper. Such action
    37  may also be filed or maintained by a representative of such person.
    38    (2) At least thirty days prior to the filing of any such action pursu-
    39  ant to paragraph one of this subsection, a written  demand  for  relief,
    40  identifying  the claimant and reasonably describing the unfair or decep-
    41  tive act or practice relied upon  and  the  injury  suffered,  shall  be
    42  mailed  or  delivered  by  the  claimant to the appropriate person at an
    43  applicable insurer. An insurer receiving such a demand for  relief  who,
    44  within thirty days of the delivery of the demand, makes a written tender
    45  of  settlement  which is rejected by the claimant may, in any subsequent
    46  action, file  such  written  tender  and  an  affidavit  concerning  the
    47  rejection  of  such written tender and thereby limit any recovery to the
    48  relief tendered if the court finds that the relief tendered was  reason-
    49  able in relation to the injury actually suffered by the petitioner.
    50    (3)  If  the  court  finds  that  any practice deemed unlawful by this
    51  section has been committed willfully and  with  intent  to  defraud  any
    52  person  then  the  court  shall award two times the damages sustained by
    53  such person, plus costs and attorneys' fees to the  person  bringing  an
    54  action under this section.

        S. 166--A                           3
 
     1    (4)  No  contract  for  insurance issued or delivered in the state may
     2  require an insured to waive the right to a jury trial  to  adjudicate  a
     3  dispute arising from a violation of this section.
     4    §  3.  Section  3425  of  the insurance law is amended by adding a new
     5  subsection (t) to read as follows:
     6    (t) No insurer shall refuse to issue or renew a covered policy  solely
     7  on  the  grounds that the policyholder has brought an action pursuant to
     8  section two thousand six hundred one-a of this chapter.
     9    § 4. This act shall take effect on the ninetieth day  after  it  shall
    10  have  become a law and shall apply to all acts and omissions by insurers
    11  occurring on or after such effective date; provided, however, that para-
    12  graph (4) of subsection b of section 2601-a  of  the  insurance  law  as
    13  added by section one of this act shall only apply to insurance contracts
    14  entered into after such effective date.
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