Relates to contractual liability insurance policies; requires reimbursement to the provider for all obligations incurred by a provider under the terms of a service contract, or in the event of the provider's nonperformance, provide or pay on behalf of the provider all covered contractual obligations incurred by the provider.
STATE OF NEW YORK
________________________________________________________________________
2798
2023-2024 Regular Sessions
IN SENATE
January 24, 2023
___________
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to contractual liability
insurance policies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 1 of subsection (c) of section 7903 of the insur-
2 ance law, as amended by chapter 578 of the laws of 2000, is amended to
3 read as follows:
4 (1) [insure the performance of all its obligations under all service
5 contracts pursuant to a] purchase one or more service contract
6 reimbursement insurance [policy] policies issued by [an insurer] one or
7 more insurers authorized to issue service contract reimbursement insur-
8 ance in this state or procured by an excess line licensee pursuant to
9 section two thousand one hundred eighteen of this chapter. Each
10 reimbursement insurance policy shall obligate the insurer that issued
11 such policy to either provide reimbursement to the provider for all
12 obligations incurred by a provider under the terms of a service
13 contract, or in the event of the provider's nonperformance, provide or
14 pay on behalf of the provider all covered contractual obligations
15 incurred by the provider. In the event the provider fails to insure its
16 obligations pursuant to this paragraph or in the event that such insur-
17 ance shall lapse or be terminated, the provider shall comply with either
18 paragraph two or three of this subsection within forty-five days of the
19 insurance lapse or termination;
20 § 2. Subsection (b) of section 7905 of the insurance law, as added by
21 chapter 614 of the laws of 1997, is amended to read as follows:
22 (b) Service contracts insured under [a] one or more service contract
23 reimbursement insurance [policy] policies pursuant to [paragarph] para-
24 graph one of subsection (c) of section seven thousand nine hundred three
25 of this article shall contain a statement in substantially the following
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01943-01-3
S. 2798 2
1 form: "Obligations of the provider under this service contract are
2 insured under a service contract reimbursement insurance policy. If the
3 provider fails to pay or provide service on a claim within sixty days
4 after proof of loss has been filed, the contract holder is entitled to
5 make a claim directly against the insurer under the service contract
6 reimbursement insurance policy." The service contract shall also state
7 the name and address and a toll-free telephone number of the insurer
8 under [the] each related service contract reimbursement insurance poli-
9 cy.
10 § 3. This act shall take effect immediately.
