Provides that a liability insurer may be sued for and the plaintiff may recover compensatory damages where the insurer failed to effectuate prompt and fair settlement of the claim and considered its interests to the detriment of the insured so as to cause the rendering of a judgment in excess of the policy limits.
STATE OF NEW YORK
________________________________________________________________________
3634--B
2019-2020 Regular Sessions
IN SENATE
February 11, 2019
___________
Introduced by Sens. BRESLIN, SEWARD, FELDER, GAUGHRAN -- read twice and
ordered printed, and when printed to be committed to the Committee on
Insurance -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee
AN ACT to amend the insurance law, in relation to maintaining an action
against a liability insurer seeking compensatory damages in excess of
the policy limits where such insurer failed to engage in prompt and
fair settlement of the claim
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 3420 of the insurance law is amended by adding a
2 new subsection (b-1) to read as follows:
3 (b-1) An action may also be maintained by the persons identified in
4 paragraphs one, two and three of subsection (b) of this section against
5 the insurer to recover damages including compensatory damages and inter-
6 est measured from the time of failure to offer a fair and reasonable
7 settlement in accordance with this section, from such insurer to the
8 full extent of the judgment against the insured, not limited to the
9 policy limits and not subject to the limitations and conditions of para-
10 graph two of subsection (a) of this section, where a preponderance of
11 the evidence establishes that the insurer failed to effectuate a prompt
12 and fair settlement of a claim or any portion thereof, and where under
13 the totality of the facts and circumstances related to the claim, the
14 insurer failed to reasonably accord at least equal or more favorable
15 consideration to its insured's interests as it did to its own interests,
16 and thereby exposed the insured to a judgment in excess of the policy
17 limits.
18 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00917-05-9
