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A05780 Text:

                STATE OF NEW YORK
                               2013-2014 Regular Sessions
                   IN ASSEMBLY
                                      March 6, 2013
        Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
          Committee on Insurance
        AN ACT to amend the insurance law, in relation to establishing a private
          right of action for unfair claim settlement practices by an insurer
          The People of the State of New York, represented in Senate and  Assem-

        bly, do enact as follows:
     1    Section  1.  Section  2601 of the insurance law, paragraphs 4 and 5 of
     2  subsection (a) as amended by chapter 547 of the laws of 1997  and  para-
     3  graph 6 of subsection (a) as amended by chapter 388 of the laws of 2008,
     4  is amended to read as follows:
     5    §  2601.  Unfair claim settlement practices; penalties. (a) No insurer
     6  doing business in this state shall engage  in  unfair  claim  settlement
     7  practices. Any of the following acts by an insurer, if committed without
     8  just  cause  and  performed with such frequency as to indicate a general
     9  business practice, shall constitute unfair claim settlement practices:
    10    (1) knowingly misrepresenting to claimants pertinent facts  or  policy
    11  provisions relating to coverages at issue;
    12    (2) failing to acknowledge with reasonable promptness pertinent commu-

    13  nications as to claims arising under its policies;
    14    (3) failing to adopt and implement reasonable standards for the prompt
    15  investigation of claims arising under its policies;
    16    (4)  not attempting in good faith to effectuate prompt, fair and equi-
    17  table settlements of claims submitted  in  which  liability  has  become
    18  reasonably  clear, except where there is a reasonable basis supported by
    19  specific information available for review by  the  department  that  the
    20  claimant  has caused the loss to occur by arson. After receiving a prop-
    21  erly executed proof of loss, the insurer shall advise  the  claimant  of
    22  acceptance or denial of the claim within thirty working days;
    23    (5) compelling policyholders to institute suits to recover amounts due
    24  under its policies by offering substantially less than the amounts ulti-
    25  mately recovered in suits brought by them; [or]

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 5780                             2
     1    (6)  failing  to promptly disclose coverage pursuant to subsection (d)
     2  or subparagraph (A) of paragraph two of subsection (f) of section  three
     3  thousand four hundred twenty of this chapter.
     4    (b)  Evidence  as to numbers and types of complaints to the department
     5  against an insurer and as to the department's complaint experience  with
     6  other insurers writing similar lines of insurance shall be admissible in
     7  evidence in any administrative or judicial proceeding under this section
     8  or  article  twenty-four or seventy-four of this chapter, but no insurer

     9  shall be deemed in violation of this section solely  by  reason  of  the
    10  numbers and types of such complaints.
    11    (c)  If it is found, after notice and an opportunity to be heard, that
    12  an insurer has violated this section,  each  instance  of  noncompliance
    13  with  subsection  (a) [hereof] of this section may be treated as a sepa-
    14  rate violation of this section  for  purposes  of  ordering  a  monetary
    15  penalty  pursuant  to subsection (b) of section one hundred nine of this
    16  chapter. A violation of this section shall not be a misdemeanor.
    17    (d) Where the governor has declared a disaster emergency  pursuant  to
    18  section  twenty-eight  of the executive law, in addition to the right of
    19  action granted to the department pursuant to this  section,  any  person

    20  who  has  suffered  loss  or  injury  by reason of any violation of this
    21  section relating to  an  insurance  claim  for  property  damage  in  an
    22  affected  area encompassed by the executive order declaring the disaster
    23  emergency may bring an action in his or her own name as a  plaintiff  to
    24  enjoin such unlawful act or practice and an action to recover his or her
    25  actual  damages.  The  court  may,  in  its  discretion,  award punitive
    26  damages, if the court finds that  the  defendant  insurer  willfully  or
    27  knowingly  violated  this section. The court may award reasonable attor-
    28  ney's fees to a prevailing plaintiff.
    29    § 2. This act shall take effect immediately.
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