S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   686

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced by M. of A. DESTITO, MAGNARELLI, ENGLEBRIGHT, PERRY, V. LOPEZ
  --  Multi-Sponsored  by  --  M. of A. CUSICK, McENENY -- read once and
  referred to the Committee on Transportation

AN ACT to amend the vehicle and traffic  law,  in  relation  to  insurer
  interests in certain motor vehicle repair shops

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The vehicle and traffic law is  amended  by  adding  a  new
section 398-j to read as follows:
  S 398-J. INSURER INTEREST IN MOTOR VEHICLE REPAIR SHOPS PROHIBITED. 1.
PROHIBITION. ON OR AFTER SEPTEMBER FIRST, TWO THOUSAND ELEVEN, AN INSUR-
ER  MAY  NOT  HOLD NOR ACQUIRE ANY OWNERSHIP INTEREST IN A MOTOR VEHICLE
REPAIR SHOP.
  2. DISCLOSURE REQUIREMENTS. (A)  AN  INSURER  THAT,  BEFORE  SEPTEMBER
FIRST, TWO THOUSAND ELEVEN, HAS AN OWNERSHIP INTEREST IN A MOTOR VEHICLE
REPAIR SHOP MUST DISCLOSE TO EACH INSURED THAT THE INSURED HAS THE RIGHT
TO USE ANY MOTOR VEHICLE REPAIR SHOP SELECTED BY THE INSURED. THE INSUR-
ER  SHALL MAKE THE DISCLOSURE IN WRITING IN THE MANNER PRESCRIBED BY THE
DEPARTMENT AND SHALL PROVIDE THE DISCLOSURE:
  (1) AT THE TIME THE POLICY  IS  DELIVERED,  ISSUED  FOR  DELIVERY,  OR
RENEWED; AND
  (2)  WHEN  AN  ACCIDENT CLAIM COVERED BY THE POLICY IS REPORTED TO THE
INSURER BY THE INSURED.
  (B) AN INSURER MAY NOT OFFER AN INCENTIVE OR PROVIDE  COMPENSATION  TO
ANY  PERSON  TO  REWARD  THAT PERSON FOR REFERRING AN INSURED TO A MOTOR
VEHICLE REPAIR SHOP IN WHICH THE INSURER HAS AN OWNERSHIP INTEREST.
  3. DIVESTMENT. ANY INSURER THAT HOLDS OR ACQUIRES ANY OWNERSHIP INTER-
EST IN A MOTOR VEHICLE REPAIR SHOP PRIOR TO SEPTEMBER FIRST,  TWO  THOU-
SAND  ELEVEN, SHALL DIVEST ITSELF OF ANY SUCH INTEREST ON OR BEFORE SUCH
DATE.

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

                                                           LBD03315-01-9

A. 686                              2

  4. DEFINITIONS. FOR PURPOSES  OF  THIS  SECTION,  "INSURER"  MEANS  AN
INSURER  AUTHORIZED  AS  SUCH  TO  PERFORM AN INSURANCE BUSINESS IN THIS
STATE IN COMPLIANCE WITH THE INSURANCE  LAW,  BY  REASON  OF  A  LICENSE
ISSUED AND IN FORCE PURSUANT TO THE LAWS OF THIS STATE OR OF A CORPORATE
CHARTER GRANTED AND IN FORCE PURSUANT TO THE LAWS OF THIS STATE, BUT NOT
INCLUDING ANY INSURER EXEMPTED FROM COMPLIANCE WITH THE REQUIREMENT THAT
IT OBTAIN A LICENSE TO DO BUSINESS UNDER THE PROVISIONS OF THE INSURANCE
LAW.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
necessary for the implementation of this act on its  effective  date  is
authorized  and  directed  to  be  made  and completed on or before such
effective date.