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: A4011 Revised 2/8/2023
SPONSOR: Weprin TITLE OF BILL:
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
SUMMARY OF PROVISIONS:
This bill would require the Superintendent of the Department of Finan-
cial Services, within six months of the effective date of this bill, to
promulgate regulations which provide standardized definitions for
commonly used terms and phrases found in homeowners policies and commer-
cial 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 regu-
lations are finalized, which would be no later than January 1, 2025. The
bill, would also allow insurers to use alternative definitions at the
discretion of the Superintendent, so long as such definitions 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 mean-
ings 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 contains
standardized terms and phrases.
LEGISLATIVE HISTORY:
2021-2022: A.8637 - Ordered to Third Reading Cal. 414
2019-2020: A.75 - Ordered to Third Reading Cal. 327
STATE OF NEW YORK
________________________________________________________________________
4011
2023-2024 Regular Sessions
IN ASSEMBLY
February 8, 2023
___________
Introduced by M. of A. WEPRIN -- 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 twenty-five. 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.
LBD05327-01-3
A. 4011 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 twenty-five. An insurer may use alter-
4 native definitions, so long as such definitions are not any less favora-
5 ble to the policyholder or claimant, as determined by the superinten-
6 dent.
7 § 3. This act shall take effect immediately.
