Prohibits cancellation, non-renewal or conditioning renewal of automobile insurance of a policyholder solely as a result of a dispute or a complaint pending against the insurer.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6648
SPONSOR: Chandler-Waterman TITLE OF BILL:
An act to amend the insurance law, in relation to prohibiting an insurer
from cancelling or refusing to renew or condition its renewal of automo-
bile insurance policies in certain cases
PURPOSE OR GENERAL IDEA OF BILL:
AN ACT to amend the insurance law, in relation to prohibiting an insurer
from cancelling or refusing to renew or condition its renewal of automo-
bile insurance policies in. certain cases.
SUMMARY OF PROVISIONS:
Section one of the bill amends § 3425 of the insurance law by adding a
new subsection (t) which requires that automobile insurance policies,
except for nonpayment of premium, shall not be cancelled or refused
renewal due to a pending claim filed against the insured.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
N/A
JUSTIFICATION:
This bill seeks to help protect consumers from having their policies
terminated due to claim disputes or their filing of complaints. Consum-
ers should not have to suppress or lose their right to openly and appro-
priately protest arbitrary and unfair claim settlement practices by
insurance companies due to fear of the loss of coverage. Currently,
under subsection (f) of § 3425 of the insurance law, an insurer may
non-renew up to two percent of its non-commercial motor vehicle policies
during each calendar year. The purpose of the two percent provision was
to afford insurance companies some protection from policyholders who may
be high risks, and to allow for some flexibility in these cases. Conse-
quently, many insurance companies have abused this two percent provision
by using it in cases where policyholders have had claim disputes and
subsequently have filed complaints with the department against the
carrier.
PRIOR LEGISLATIVE HISTORY:
2009-2010: A3546, S2280 2011-2012: A4016, S1496 2013-2014: A4682, 51833
2015-2016: A6398, S935 2017-2018: A253, S3079 2019- 2020: A35, S3252
2023-2024: S2624
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
TBD
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
6648
2023-2024 Regular Sessions
IN ASSEMBLY
April 25, 2023
___________
Introduced by M. of A. CHANDLER-WATERMAN -- read once and referred to
the Committee on Insurance
AN ACT to amend the insurance law, in relation to prohibiting an insurer
from cancelling or refusing to renew or condition its renewal of auto-
mobile insurance policies in certain cases
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) No insurer shall cancel or refuse to renew a policy covering a
4 private passenger automobile, or to condition its renewal upon change of
5 limits or elimination of any coverages solely on the basis that a claim
6 filed by the insured with the insurer is in dispute, or that a complaint
7 by the insured against the insurer resulting from the disputed claim is
8 pending with the department.
9 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04329-01-3
