NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1092A
TITLE OF BILL: An act to amend the insurance law, in relation to
standards for prompt investigation and settlement of claims arising from
states of emergency
PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to
establish claim investigation and settlement standards for insurance
companies to follow in the event of a disaster.
SUMMARY OF SPECIFIC PROVISIONS: This bill would require every insurer
authorized to writes policies in New York State that cover loss or
damage to real property, personal property, or other liabilities for
loss of, damage to, or injury to persons or property to begin investi-
gating a claim arising from a declared disaster or emergency and inform
the insured of all items, statements, and forms that the insurer
believed will be required of the claimant in accordance with regulations
promulgated by. the Superintendent of Financial Services. If the insurer
wishes the investigation to include an inspection of damaged or
destroyed property, such inspection would have to occur in accordance
with regulations promulgated by the Superintendent. In addition, insur-
ers would have to allow claimants to make certain repairs necessary to
protect health and safety and to accept an alternative proof of loss
from the claimant.
Within fifteen business days after receiving all the items, statements,
and forms that the insurer required from the claimant, the insurer would
be required to advise the claimant in writing whether the insurer has
accepted or rejected the claim. An insurer would be allowed a one-time
extension of fifteen additional business days to continue its investi-
gation, provided that the insurer notifies the claimant of the reasons
additional time is needed for the investigation.
If the insurer has accepted the claim, the claimant would have to be
notified of the amount the insurer is offering to settle the claim and
of all applicable policy provisions regarding the claimant's right to
reject and appeal the insurer's offer. If the insurer rejects the claim,
the insurer would have to inform the claimant of all applicable policy
provisions regarding the claimant's right to appeal the decision.
An insurer would be required to pay the claim not later than three busi-
ness days from the settlement of the claim.
JUSTIFICATION: When a disaster or emergency strikes, policyholders
frequently rely on their insurance policies to be made whole again.
Insurance payouts are often necessary for homeowners and businesses to
make repairs or to replace damaged property. In addition, repairs often
need to be made quickly in order to ensure the health and safety of the
policyholders and the community. Moreover, a delay in insurance payments
can result in a delay in FEMA assistance, as FEMA will not provide
payment for damages until insurance claims are fully processed.
Following Superstorm Sandy and Tropical Storms Irene and Lee, it was
found that there were often lengthy delays in the time it was taking
insurance companies to investigate and process claims and make payments
to policyholders. Following Sandy, the Department of Financial Services
found it necessary to issue an emergency regulation that required insur-
ers to begin an investigation within 6 business days of receiving a
Sandy-related claim; if the insurer sought an inspection of the damaged
property, the inspection would have to be performed within those 6 busi-
This bill would address this issue by requiring insurers to respond to a
claim arising from a disaster or emergency in accordance with regu-
lations established by the Superintendent of Financial Services, accept
or reject a claim within fifteen business days of closing the investi-
gation, and pay a claim within three business days of the claim being
PRIOR LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK
2013-2014 Regular Sessions
January 9, 2013
Introduced by M. of A. SKOUFIS, SILVER, TITONE, CUSICK, WEISENBERG,
GOLDFEDER, WEINSTEIN, MORELLE, BROOK-KRASNY, CYMBROWITZ, HENNESSEY,
COLTON, NOLAN, MAISEL, SOLAGES, SANTABARBARA, PERRY, RAMOS, LUPARDO --
Multi-Sponsored by -- M. of A. ABINANTI, BRENNAN, BUCHWALD, ENGLE-
BRIGHT, GALEF, GLICK, GUNTHER, JAFFEE, LAVINE, MARKEY, McDONOUGH,
PAULIN, RABBITT, SWEENEY, THIELE, TITUS -- read once and referred to
the Committee on Insurance -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the insurance law, in relation to standards for prompt
investigation and settlement of claims arising from states of emergen-
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 2616
2 to read as follows:
3 § 2616. Standards for prompt investigation and settlement of claims.
4 (a) This section shall apply to every insurer who writes policies that
5 cover loss of or damage to real property, personal property or other
6 liabilities for loss of, damage to, or injury to persons or property
7 when a local state of emergency is declared pursuant to section twenty-
8 four of the executive law, when the governor declares a disaster emer-
9 gency pursuant to section twenty-eight of the executive law, or when the
10 President issues a major disaster or emergency declaration pursuant to
11 the Robert T. Stafford Disaster Relief and Emergency Assistance Act
12 (P.L. 93-288), for claims arising from such emergency.
13 (1) an insurer shall acknowledge the receipt of all claims in writing
14 to the claimant or the claimant's authorized representative in accord-
15 ance with regulations promulgated by the superintendent;
16 (2) If the insurer wishes its investigation to include an inspection
17 of damaged or destroyed property, the inspection, whether performed by
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
A. 1092--A 2
1 the insurer, an independent adjuster, or other representative of the
2 insurer, shall occur in accordance with regulations promulgated by the
3 superintendent. Furthermore, where necessary to protect the health and
4 safety of the claimant, immediate repairs to windows, exterior walls,
5 exterior doors, roofs, heating systems, water systems and electrical
6 systems may be made and alternative proof of loss such as photographs,
7 video recordings, inventories and all receipts for repairs or replace-
8 ment property shall satisfy policy requirements;
9 (3) a claim filed with an agent of an insurer shall be deemed to have
10 been filed with the insurer unless, consistent with law or contract, the
11 agent notifies the person filing the claim that the agent is not author-
12 ized to receive notices of claim; and
13 (4) an insurer shall furnish to such claimant, or claimant's author-
14 ized representative, a notification of all items, statements and forms,
15 if any, which the insurer reasonably believes will be required of the
16 claimant in order to investigate such claim in accordance with regu-
17 lations promulgated by the superintendent.
18 (b)(1) an insurer shall, within fifteen business days of receipt of
19 all items, statements and forms requested under this section from the
20 claimant, or the claimant's authorized representative, advise the claim-
21 ant in writing whether the insurer has accepted or rejected the claim.
22 (2) An insurer shall be granted a one-time extension of fifteen busi-
23 ness days to determine whether a claim should be accepted or rejected.
24 If the insurer elects to utilize this extension, it shall so notify the
25 claimant, or the claimant's authorized representative, in writing. Such
26 notification shall include the reasons additional time is needed for the
28 (3) Once the claim is accepted by the insurer, the insurer shall
29 advise the claimant, or the claimant's authorized representative, in
30 writing of the amount the insurer is offering to settle the claim. The
31 insurer shall also provide to the claimant, or the claimant's authorized
32 representative, in writing, of all applicable policy provisions regard-
33 ing the claimant's right to reject and appeal the offer.
34 (4) In any case where the claim is rejected by the insurer, the insur-
35 er shall notify the claimant, or the claimant's authorized represen-
36 tative, in writing, of all applicable policy provisions regarding the
37 claimant's right to appeal the decision.
38 (c) An insurer shall pay the claim not later than three business days
39 from the settlement of the claim.
40 (d) The superintendent may promulgate any rules or regulations neces-
41 sary to implement the provisions of this section.
42 § 2. This act shall take effect immediately.