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S03384 Summary:

Add §346, Ins L
Requires all motor vehicle insurers to file annual detailed financial and claim data statements with the superintendent of financial services; provides that all such statements shall be made available to the public.
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S03384 Actions:

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S03384 Text:

                STATE OF NEW YORK
                               2021-2022 Regular Sessions
                    IN SENATE
                                    January 29, 2021
        Introduced  by  Sen.  BAILEY -- 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  requiring  all  motor
          vehicle  insurers  to  file  annual  financial statements and detailed
          claim data with the superintendent of financial services

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Legislative  intent.  The  legislature  hereby  finds and
     2  declares that insurance companies issuing motor vehicle policies in this
     3  state owe a duty to those they insure and to those who may in the future
     4  be insured by them, to fully disclose in a public and transparent manner
     5  all elements relating to their financial condition  and  solvency.  Such
     6  obligation  is  essential  in maintaining the public's inherent right to
     7  know the details and specifics of such  insurer's  expenses  and  claims
     8  history on a global basis so, as consumers, they can make a reasoned and
     9  rational selection of the insurer with which they intend to do business.
    10  As  premiums  escalate,  it  is more incumbent on such insurers to honor
    11  this obligation by making the public aware of the rationale they use  in
    12  determining  the premiums they charge, and it is the sense of the legis-
    13  lature that where the data used is available, it should be disclosed  in
    14  an open and public manner.
    15    §  2. The insurance law is amended by adding a new section 346 to read
    16  as follows:
    17    § 346. Financial statement and detailed claim data to  be  filed  with
    18  the  department.    (a) For purposes of this section, the term "insurer"
    19  shall mean any person, corporation, association or other business entity
    20  authorized to issue a motor vehicle insurance policy in this state.
    21    (b) On or before April first of each year, every insurer shall provide
    22  the superintendent with a detailed financial statement to supplement and
    23  expand upon the information contained in the statutory annual  statement
    24  for  the  most recently concluded calendar year. The financial statement
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 3384                             2
     1  shall contain information on a combined basis for all lines of insurance
     2  as well as information separately for each of  the  following  lines  of
     3  insurance: (1) private passenger automobile other liability, (2) private
     4  passenger  automobile  personal injury protection, (3) private passenger
     5  automobile physical damage, (4) commercial automobile  other  liability,
     6  (5) commercial automobile personal injury protection, and (6) commercial
     7  automobile  physical damage.  That financial statement shall include the
     8  entirety  of  its  business  activities  conducted  in  this  state,  or
     9  conducted  outside  this state, but having a nexus to insurance policies
    10  or contracts of insurance insuring  persons  or  risks  in  this  state,
    11  consistent  with the procedures for determining New York state insurance
    12  business for statutory annual statement reporting purposes. Such  state-
    13  ment shall be in a form determined by the superintendent. The form shall
    14  be  sufficiently  itemized  in  a  manner that allows for an actuarially
    15  sound analysis of the income realized by the insurer  from  all  sources
    16  during  such  year,  including  but  not limited to premiums, investment
    17  income, profit from sale of assets and any other category or  categories
    18  of  income  as  determined  by  the  superintendent  to reflect the full
    19  disclosure requirements of this section. At a minimum, such  information
    20  shall consist of the items set forth in the statement of income, exclud-
    21  ing  the  capital  and  surplus account section of the property/casualty
    22  statutory annual statement, as applicable  to  the  insurer's  New  York
    23  state  business,  as  well  as  the other information delineated in this
    24  subsection. Such financial statement shall also contain a  comprehensive
    25  and  detailed disclosure of the insurer's expenses actually incurred and
    26  paid during such calendar year, to  include  normal  business  expenses,
    27  salaries,  commissions,  consulting  fees,  legal  expenses, advertising
    28  costs and any other category deemed pertinent  to  the  intent  of  this
    29  section. At a minimum, the expense information required shall consist of
    30  the  items set forth in the underwriting and investment exhibit - part 3
    31  - expenses of the property / casualty  statutory  annual  statement,  as
    32  applicable  to  the  insurer's  New York state business. With respect to
    33  salaries (including all other forms of compensation), each insurer shall
    34  itemize the salary of the twenty most highly  compensated  employees  of
    35  such  insurer during such year, provided that the name of such employees
    36  need not be disclosed. Such financial statement shall also  provide  the
    37  public  with  a  synopsis of claims or settlements paid pursuant to such
    38  policies or contracts, listing the total of such claims and  settlements
    39  by type of insurance or the risk insured. At a minimum, the claim infor-
    40  mation  required  shall consist of the items set forth in the exhibit of
    41  premiums and losses of the property / casualty statutory  annual  state-
    42  ment, as applicable to the insurer's New York state business and identi-
    43  fied  and  categorized separately for each zip code in this state.  Such
    44  financial statement shall be signed and attested as full,  complete  and
    45  accurate  by  the  chief executive officer of the insurer, and he or she
    46  shall be held personally responsible with respect to the accuracy of the
    47  content of such statement. The  superintendent  shall  provide  insurers
    48  with  a  method  to submit their financial statements electronically via
    49  the internet, which method shall include instructions  relating  to  the
    50  use  of an electronic signature which shall be subject to, and submitted
    51  in accordance with  section  three  hundred  sixteen  of  this  article;
    52  provided,  however,  that no exception authorized in such section may be
    53  requested or granted.
    54    (c) On or before April first of each year, every insurer shall provide
    55  the superintendent with detailed closed claim information for  the  same
    56  lines  of  insurance  provided for in subsection (b) of this section for

        S. 3384                             3
     1  the most recently concluded  calendar  year.  Until  the  superintendent
     2  promulgates  data  collection forms and procedures for private passenger
     3  automobile insurance, data shall be collected using, at a  minimum,  the
     4  most  recent  publicly  available  forms  used by the Insurance Research
     5  Council for its Auto Injury Survey. The superintendent may require addi-
     6  tional information beyond that which is contained in such survey  if  he
     7  or she deems it necessary and warranted.  Instead of collecting informa-
     8  tion  for all private passenger automobile claims the superintendent may
     9  collect data for a statistically valid sample  of  claims.  The  minimum
    10  sample  size shall represent five per centum of the number of claims for
    11  each year. Until the superintendent promulgates  data  collection  forms
    12  and  procedures  for  commercial  automobile  insurance,  data  shall be
    13  collected using information  which  may  be  available  from  any  other
    14  source. For commercial automobile claims, instead of collecting informa-
    15  tion  for  all  claims the superintendent may collect data for a statis-
    16  tically valid sample of claims. The minimum sample size shall  represent
    17  ten  per  centum  of the number of claims for each year for such line of
    18  insurance. Such detailed claim data shall  be  signed  and  attested  as
    19  full, complete and accurate by the chief executive officer of the insur-
    20  er,  and  he or she shall be held personally responsible with respect to
    21  the accuracy of the data. The detailed claim data shall be submitted  in
    22  the same manner as provided for in subsection (b) of this section.
    23    (d)  The superintendent shall, in both written form and as part of the
    24  department web site, make such financial statements and  detailed  claim
    25  information  available  to  the  public.  The detailed claim information
    26  shall be provided in aggregate form for all  insurers  combined  without
    27  any  identification  of  a specific claim to a specific insurer. None of
    28  the publicly available detailed claim  information  shall  identify  the
    29  individual  insurer,  defendant  or plaintiff associated with the claim.
    30  Such financial statements and detailed claim information shall be deemed
    31  a public document and no person shall be required to file a request  for
    32  such financial statements pursuant to article six of the public officers
    33  law  in order to receive a copy thereof, but upon request and payment of
    34  the fee for copying such document, it shall be provided. With respect to
    35  the electronic copy of such  financial  statements  and  detailed  claim
    36  information, which shall be accessible on the department's web site, the
    37  department  shall  highlight the availability of such information to the
    38  public on such web site, and the link to each insurer's financial state-
    39  ment and the aggregated detailed claim information shall  be  accessible
    40  in a simple and easy manner. Both the financial statement and aggregated
    41  detailed claim information on the department web site shall be available
    42  in  EXCEL  format,  in  addition  to any other format the superintendent
    43  determines is appropriate.
    44    (e) On or before July first of each  year,  the  superintendent  shall
    45  issue  reports summarizing and explaining the information collected from
    46  the financial statements and the detailed claim information.  Copies  of
    47  such  reports  shall  be  forwarded  to  the  temporary president of the
    48  senate, the speaker of the assembly and the chairs of  both  the  senate
    49  and  assembly  insurance  committees. Such reports shall be public docu-
    50  ments and shall be accessible both in paper copy and on the department's
    51  web site.
    52    (f) Where an insurer fails or refuses to  provide  the  superintendent
    53  with  a  full  and  complete disclosure as required by this section, the
    54  superintendent shall take such action he or she deems necessary to bring
    55  the insurer into full compliance.  Such action may include imposition of
    56  a civil penalty of up to fifty thousand  dollars  assessed  against  the

        S. 3384                             4
     1  insurer  for  each violation, temporary suspension of any right to issue
     2  additional policies or contracts until the insurer  brings  itself  into
     3  full  compliance, an audit of the insurer's records by the department or
     4  its  designated representative to obtain the information and which audit
     5  shall be paid for by the insurer, or any other civil remedy  the  super-
     6  intendent   deems  warranted  or  necessary  until  such  insurer  fully
     7  complies. In addition the officer whose signature  is  affixed  to  such
     8  statement may be personally penalized to the same extent.
     9    (g) The superintendent may promulgate such rules and regulations he or
    10  she  deems  necessary for the proper administration of the provisions of
    11  this section, and such rules and regulations may be  promulgated  on  an
    12  emergency  basis if the superintendent warrants such action to be neces-
    13  sary.
    14    § 3. Severability. If any item, clause, sentence, subparagraph, subdi-
    15  vision or other part of this act, or  the  application  thereof  to  any
    16  person  or circumstances shall be held to be invalid, such holding shall
    17  not affect, impair or invalidate the remainder of this act but it  shall
    18  be  confined  in  its  operation to the item, clause, sentence, subpara-
    19  graph, subdivision or other part of this act directly involved  in  such
    20  holding, or to the person and circumstances therein involved.
    21    § 4. This act shall take effect immediately.
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