NY State Senate Bill 2011-S4733

Archive: Last Bill Status - In Senate Committee Transportation Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 04, 2012	referred to transportation
Apr 18, 2011	referred to transportation

2011-S4733 (ACTIVE) - Details

Current Committee:: Senate Transportation
Law Section:: Vehicle and Traffic Law
Laws Affected:: Add §398-j, V & T L
Versions Introduced in 2009-2010 Legislative Session:: S2041

2011-S4733 (ACTIVE) - Summary

Provides an insurer may not hold nor acquire interest in a motor vehicle repair shop; insurers that before owned an 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.

2011-S4733 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S4733

TITLE OF BILL:
An act
to amend the vehicle and traffic law, in relation to insurer interests
in certain motor vehicle repair shops

PURPOSE:
To prohibit an insurer from having an ownership interest in an auto
body shop.

SUMMARY OF PROVISIONS:
Section 1: Amends the vehicle and traffic law be adding a new section
398-j which prohibits an insurer from holding or acquiring any
ownership interest in a motor vehicle repair shop, effective 9/1/11.
Any insurer holding or acquiring any such ownership interest prior to
9/1/11 must divest themselves of such interest by such date. The bill
also provides that prior to 9/1/11, any insurer that has such an
interest must disclose to each insured, in writing and in a manner
prescribed by the department of motor vehicles, that the insured has
the right to use any motor vehicle repair shop selected by the
insured. Such disclosure is to be made at the time the policy is
delivered, issued for delivery or renewed; and when an accident claim
covered by the policy is reported to the insurer by the insured.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:

None.

JUSTIFICATION:
This bill reflects a movement across the nation (Texas, California and
Virginia to name a few states) to protect consumers from the inherent
conflict of interest presented when an insurer that pays for the
repair of a vehicle has that repair performed at a facility from
which it derives income as an investor. Such an apparent conflict
will lead to reduced oversight of auto body work by the insurer and
fewer choices for consumers regarding where they may take their
vehicles for auto body repairs. Currently, section 2610 of the
Insurance Law provides that an insurance company cannot require that
repairs be made to a motor vehicle in a particular place or repair
shop. A consumer has the right to have their vehicle repaired in the
shop of their choice. However, over the years, this anti-sterring
consumer protection has been eroded by the use of Direct
Repair Programs agreements where-by insurers offer certain select
repair shops an opportunity to increase business through insured
direct referrals in exchange for the repair shops agreeing to fix the
vehicle under conditions specified by the insured. The anti-steering
protections in law are too weak to withstand these operations. This
bill will protect consumer interests by preventing insurers from
institutionalizing through shop ownership those practices that
undermine quality work.

LEGISLATIVE HISTORY:
2009-10: A.686  - Referred to Assembly Transportation Committee.
2007-08: A.1063 - Referred to Assembly Transportation Committee.

FISCAL IMPLICATIONS:


None.

EFFECTIVE DATE:
This act shall take effect on the 120th day after it shall have become
a law; provided, however, that effective immediately, the addition,
amendment and/or repeal of any rule or regulation necessary for the
implementation of this act on its effective date are authorized and
directed to be made and completed on or before such effective date.

2011-S4733 (ACTIVE) - Bill Text download pdf

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

                                  4733

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             April 18, 2011
                               ___________

Introduced  by  Sen.  DeFRANCISCO -- 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 THE FIRST OF SEPTEMBER FOLLOWING THE EFFECTIVE
DATE OF THIS SECTION, AN INSURER MAY NOT HOLD NOR ACQUIRE ANY  OWNERSHIP
INTEREST IN A MOTOR VEHICLE REPAIR SHOP.
  2.  DISCLOSURE  REQUIREMENTS. (A) AN INSURER THAT, BEFORE THE FIRST OF
SEPTEMBER FOLLOWING THE EFFECTIVE DATE OF THIS SECTION, 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 INSURER SHALL MAKE THE DISCLOSURE IN  WRIT-
ING  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  THE  FIRST  OF  SEPTEMBER
FOLLOWING THE EFFECTIVE DATE OF THIS SECTION, 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.
                                                           LBD01832-01-1

S. 4733                             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.

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Senate Bill S4733

Sponsored By

Archive: Last Bill Status - In Senate Committee Transportation Committee

2011-S4733 (ACTIVE) - Details

2011-S4733 (ACTIVE) - Summary

2011-S4733 (ACTIVE) - Sponsor Memo

2011-S4733 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S4733

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Sponsored By

John A. DeFrancisco

Archive: Last Bill Status - In Senate Committee Transportation Committee

2011-S4733 (ACTIVE) - Details

2011-S4733 (ACTIVE) - Summary

2011-S4733 (ACTIVE) - Sponsor Memo

2011-S4733 (ACTIVE) - Bill Text download pdf

Comments