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

                                  2041

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 11, 2009
                               ___________

Introduced  by  Sens.  DeFRANCISCO,  MORAHAN,  VOLKER  -- read twice and
  ordered printed, and when printed to be committed 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

              

S. 2041                             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.