NY State Senate Bill 2013-S3413A

Senate Bill S3413A

2013-2014 Legislative Session

Establishes standards for the prompt investigation and settlement of claims arising out of states of emergency and disasters

download bill text pdf

Archive: Last Bill Status - In Senate Committee Insurance 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 08, 2014	referred to insurance
May 24, 2013	print number 3413a
May 24, 2013	amend and recommit to insurance
Feb 01, 2013	referred to insurance

Bill Amendments

Original

A (Active)

2013-S3413 - Details

See Assembly Version of this Bill:: A1092
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §2616, Ins L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S1398, A4458
2017-2018: S1476, A1568
2019-2020: S3553, A7097
2021-2022: S6595, A2236
2023-2024: S5201, A2078

2013-S3413 - Summary

Establishes standards for the prompt investigation and settlement of claims arising out of states of emergency and disasters.

2013-S3413 - Sponsor Memo

                                BILL NUMBER:S3413

TITLE OF BILL:  An act to amend the insurance law, in relation to stand-
ards  for  prompt  investigation  and  settlement of claims arising from
states of emergency

Purpose Or General Idea Of Bill:  The purpose of this bill is to  estab-
lish  claim  investigation and settlement standards for insurance compa-
nies to follow in the event of a disaster.

Summary Of Specific Provisions:  This bill would apply to every  insurer
authorized  to  writes  policies  in  New  York State that cover loss or
damage to real property, personal property,  or  other  liabilities  for
loss of, damage to, or injury to persons or property.

Within  six  business  days of receiving notification of a claim arising
from a disaster or emergency (as declared by a  local  government  offi-
cial,  the  governor, or the President of the United States), an insurer
would be required to begin investigating the claim and inform the insur-
er of all items, statements, and forms that the insurer believes will be
required of the claimant, if the insurer  wishes  the  investigation  to
include  an inspection of damaged or destroyed property, such inspection
would have to occur within the six business days. in addition,  insurers
would  have  to  allow  claimants  to  make certain repairs necessary to
protect health and safety and to accept an  alternative  proof  of  loss
from the claimant.

Within  15  business days after receiving all the items, statements, and
forms that the insurer required from the claimant, the insurer would  be
required  to  advise  the  claimant  in  writing whether the insurer has
accepted or rejected the claim. An insurer would he allowed  a  one-time
extension  of 15 additional business days to continue its investigation,
provided that the insurer notifies the claimant  of  the  reasons  addi-
tional time is needed for the investigation.

If  the  insurer  has  accepted the claim, the claimant would have to be
notified of the amount the insurer is offering to settle the  claim  and
of  all  applicable  policy provisions regarding the claimant's right to
reject and appeal the insurer's offer. If the insurer rejects the claim,
the insurer would have to inform the claimant of all  applicable  policy
provisions regarding the claimant's right to appeal the decision.

An  insurer would be required to pay the claim not later than 3 business
days from the settlement of the claim.

Justification:   When a disaster  or  emergency  strikes,  policyholders
frequently  rely  on  their  insurance  policies to be made whole again.
Insurance payouts are often necessary for homeowners and  businesses  to
make  repairs or to replace damaged property. in addition, repairs often
need to be made quickly in order to ensure the health and safety of  the
policyholders and the community. Moreover, a delay in insurance payments

can  result  in  a  delay  in  FEMA assistance, as FEMA will not provide
payment for damages until insurance claims are fully processed.

Following  Superstorm  Sandy  and  Tropical Storms Irene and Lee, it was
found that there were often lengthy delays in the  time  it  was  taking
insurance  companies to investigate and process claims and make payments
to policyholders. Following Sandy, the Department of Financial  Services
found it necessary to issue an emergency regulation that required insur-
ers  to  begin  an  investigation  within 6 business days of receiving a
Sandy-related claim; if the insurer sought an inspection of the  damaged
property,  the  inspection  would  have to be performed within those six
business days.

This bill would permanently address this problem by tightening the  time
frame by when an insurer must respond to a claim arising from a disaster
or an emergency to the standard which was imposed after Superstorm Sandy
and  placing additional time limits on how long an insurer has to settle
and pay a claim.

Prior Legislative History: New bill.

Fiscal implications For State And Local Governments:  Needs to be deter-
mined

Effective Date: Immediately,

2013-S3413 - Bill Text download pdf

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

                                  3413

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 1, 2013
                               ___________

Introduced  by Sen. CARLUCCI -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to standards  for  prompt
  investigation and settlement of claims arising from states of emergen-
  cy

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

  Section 1. The insurance law is amended by adding a new  section  2616
to read as follows:
  S  2616.  STANDARDS FOR PROMPT INVESTIGATION AND SETTLEMENT OF CLAIMS.
(A) THIS SECTION SHALL APPLY TO EVERY INSURER WHO WRITES  POLICIES  THAT
COVER  LOSS  OF  OR  DAMAGE TO REAL PROPERTY, PERSONAL PROPERTY OR OTHER
LIABILITIES FOR LOSS OF, DAMAGE TO, OR INJURY  TO  PERSONS  OR  PROPERTY
WHEN  A LOCAL STATE OF EMERGENCY IS DECLARED PURSUANT TO SECTION TWENTY-
FOUR OF THE EXECUTIVE LAW, WHEN THE GOVERNOR DECLARES A  DISASTER  EMER-
GENCY PURSUANT TO SECTION TWENTY-EIGHT OF THE EXECUTIVE LAW, OR WHEN THE
PRESIDENT  ISSUES  A MAJOR DISASTER OR EMERGENCY DECLARATION PURSUANT TO
THE ROBERT T. STAFFORD DISASTER  RELIEF  AND  EMERGENCY  ASSISTANCE  ACT
(P.L. 93-288), FOR CLAIMS ARISING FROM SUCH EMERGENCY.
  (B) WITHIN SIX BUSINESS DAYS OF RECEIVING NOTIFICATION OF A CLAIM:
  (1)  AN INSURER SHALL ACKNOWLEDGE THE RECEIPT OF SUCH CLAIM IN WRITING
TO THE CLAIMANT OR THE CLAIMANT'S AUTHORIZED REPRESENTATIVE;
  (2) AN INSURER SHALL COMMENCE AN INVESTIGATION OF THE  CLAIM.  IF  THE
INSURER  WISHES ITS INVESTIGATION TO INCLUDE AN INSPECTION OF DAMAGED OR
DESTROYED PROPERTY, THE INSPECTION, WHETHER PERFORMED BY THE INSURER, AN
INDEPENDENT ADJUSTER, OR OTHER REPRESENTATIVE OF THE INSURER, MUST OCCUR
WITHIN THE TIME FRAMES SPECIFIED IN THIS SUBSECTION. FURTHERMORE,  WHERE
NECESSARY  TO  PROTECT  THE HEALTH AND SAFETY OF THE CLAIMANT, IMMEDIATE
REPAIRS TO WINDOWS,  EXTERIOR  WALLS,  EXTERIOR  DOORS,  ROOFS,  HEATING
SYSTEMS,  WATER  SYSTEMS AND ELECTRICAL SYSTEMS MAY BE MADE AND ALTERNA-
TIVE PROOF OF LOSS SUCH AS PHOTOGRAPHS,  VIDEO  RECORDINGS,  INVENTORIES

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05809-01-3

S. 3413                             2

AND ALL RECEIPTS FOR REPAIRS OR REPLACEMENT PROPERTY SHALL SATISFY POLI-
CY REQUIREMENTS;
  (3)  A CLAIM FILED WITH AN AGENT OF AN INSURER SHALL BE DEEMED TO HAVE
BEEN FILED WITH THE INSURER UNLESS, CONSISTENT WITH LAW OR CONTRACT, THE
AGENT NOTIFIES THE PERSON FILING THE CLAIM THAT THE AGENT IS NOT AUTHOR-
IZED TO RECEIVE NOTICES OF CLAIM; AND
  (4) AN INSURER SHALL FURNISH TO SUCH CLAIMANT, OR  CLAIMANT'S  AUTHOR-
IZED  REPRESENTATIVE, A NOTIFICATION OF ALL ITEMS, STATEMENTS AND FORMS,
IF ANY, WHICH THE INSURER REASONABLY BELIEVES WILL BE  REQUIRED  OF  THE
CLAIMANT IN ORDER TO INVESTIGATE SUCH CLAIM WITHIN THE TIME FRAMES SPEC-
IFIED IN THIS SUBSECTION.
  (C)(1)  AN  INSURER  SHALL, WITHIN FIFTEEN BUSINESS DAYS OF RECEIPT OF
ALL ITEMS, STATEMENTS AND FORMS REQUESTED UNDER SUBSECTION (B)  OF  THIS
SECTION  FROM THE CLAIMANT, OR THE CLAIMANT'S AUTHORIZED REPRESENTATIVE,
ADVISE THE CLAIMANT IN WRITING  WHETHER  THE  INSURER  HAS  ACCEPTED  OR
REJECTED THE CLAIM.
  (2)  AN INSURER SHALL BE GRANTED A ONE-TIME EXTENSION OF FIFTEEN BUSI-
NESS DAYS TO DETERMINE WHETHER A CLAIM SHOULD BE ACCEPTED  OR  REJECTED.
IF  THE INSURER ELECTS TO UTILIZE THIS EXTENSION, IT SHALL SO NOTIFY THE
CLAIMANT, OR THE CLAIMANT'S AUTHORIZED REPRESENTATIVE. SUCH NOTIFICATION
SHALL INCLUDE THE REASONS ADDITIONAL TIME IS  NEEDED  FOR  THE  INVESTI-
GATION.
  (3)  ONCE  THE  CLAIM  IS  ACCEPTED  BY THE INSURER, THE INSURER SHALL
ADVISE THE CLAIMANT, OR THE  CLAIMANT'S  AUTHORIZED  REPRESENTATIVE,  IN
WRITING  OF  THE AMOUNT THE INSURER IS OFFERING TO SETTLE THE CLAIM. THE
INSURER SHALL ALSO PROVIDE TO THE CLAIMANT, OR THE CLAIMANT'S AUTHORIZED
REPRESENTATIVE, IN WRITING, OF ALL APPLICABLE POLICY PROVISIONS  REGARD-
ING THE CLAIMANT'S RIGHT TO REJECT AND APPEAL THE OFFER.
  (4) IN ANY CASE WHERE THE CLAIM IS REJECTED BY THE INSURER, THE INSUR-
ER  SHALL  NOTIFY  THE  CLAIMANT, OR THE CLAIMANT'S AUTHORIZED REPRESEN-
TATIVE, IN WRITING, OF ALL APPLICABLE POLICY  PROVISIONS  REGARDING  THE
CLAIMANT'S RIGHT TO APPEAL THE DECISION.
  (D)  AN INSURER SHALL PAY THE CLAIM NOT LATER THAN THREE BUSINESS DAYS
FROM THE SETTLEMENT OF THE CLAIM.
  (E) THE SUPERINTENDENT MAY PROMULGATE ANY RULES OR REGULATIONS  NECES-
SARY TO IMPLEMENT THE PROVISIONS OF THIS SECTION.
  S 2. This act shall take effect immediately.

2013-S3413A (ACTIVE) - Details

See Assembly Version of this Bill:: A1092
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §2616, Ins L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S1398, A4458
2017-2018: S1476, A1568
2019-2020: S3553, A7097
2021-2022: S6595, A2236
2023-2024: S5201, A2078

2013-S3413A (ACTIVE) - Summary

Establishes standards for the prompt investigation and settlement of claims arising out of states of emergency and disasters.

2013-S3413A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3413A

TITLE OF BILL:
An act
to amend the insurance law, in relation to standards for prompt
investigation and settlement of claims arising from states of emergency

PURPOSE:
The purpose of this bill is to establish claim investigation and
settlement standards for insurance companies to follow in the event
of a disaster.

SUMMARY OF PROVISIONS:
This bill would require every insurer authorized to write policies in
New York State that cover loss or damage to real property, personal
property, or other liabilities for loss of, damage to, or injury to
persons or property to begin investigating a claim arising from a
declared disaster or emergency and inform the insured of all items,
statements, and forms that the insurer believed will be required of
the claimant in accordance with regulations promulgated by the
Superintendent of Financial Services. If the insurer wishes the
investigation to include an inspection of damaged or destroyed
property, such inspection would have to occur in accordance with
regulations promulgated by the Superintendent. In addition, insurers
would have to allow claimants to make certain repairs necessary to
protect health and safety and to accept an alternative proof of loss

from the claimant.

Within fifteen business days after receiving all the items,
statements, and forms that the insurer required from the claimant,
the insurer would be required to advise the claimant in writing
whether the insurer has accepted or rejected the claim. An insurer
would be allowed a one-time extension of fifteen additional business
days to continue its investigation, provided that the insurer
notifies the claimant of the reasons additional time is needed for
the investigation.

If the insurer has accepted the claim, the claimant would have to be
notified of the amount the insurer is offering to settle the claim
and of all applicable policy provisions regarding the claimant's
right to reject and appeal the insurer's offer. If the insurer
rejects the claim, the insurer would have to inform the claimant of
all applicable policy provisions regarding the claimant's right to
appeal the decision.

An insurer would be required to pay the claim not later than three
business days from the settlement of the claim.

JUSTIFICATION:
When a disaster or emergency strikes, policyholders frequently rely on
their insurance policies to be made whole again. Insurance payouts
are often necessary for homeowners and businesses to make repairs or
to replace damaged property, In addition, repairs often need to be
made quickly in order to ensure the health and safety of the
policyholders and the community. Moreover, a delay in insurance
payments can result in a delay in FEMA assistance, as FEMA will not
provide payment for damages until insurance claims are fully processed.


Following Superstorm Sandy and Tropical Storms Irene and Lee, it was
found that there were often lengthy delays in the time it was taking
insurance companies to investigate and process claims and make
payments to policyholders. Following Sandy, the Department of
Financial Services found it necessary to issue an emergency
regulation that required insurers to begin an investigation within 6
business days of receiving a Sandy-related claim; if the insurer
sought an inspection of the damaged property, the inspection would
have to be performed within those 6 business days.

This bill would address this issue by requiring insurers to respond to
a claim arising from a disaster or emergency in accordance with
regulations established by the Superintendent of Financial Services,
accept or reject a claim within fifteen business days of closing the
investigation, and pay a claim within three business days of the
claim being settled.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:
This act shall take effect immediately.

2013-S3413A (ACTIVE) - Bill Text download pdf

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

                                 3413--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 1, 2013
                               ___________

Introduced  by Sen. CARLUCCI -- 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

AN  ACT  to amend the insurance law, in relation to standards for prompt
  investigation and settlement of claims arising from states of emergen-
  cy

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

  Section  1.  The insurance law is amended by adding a new section 2616
to read as follows:
  S 2616. STANDARDS FOR PROMPT INVESTIGATION AND SETTLEMENT  OF  CLAIMS.
(A)  THIS  SECTION SHALL APPLY TO EVERY INSURER WHO WRITES POLICIES THAT
COVER LOSS OF OR DAMAGE TO REAL PROPERTY,  PERSONAL  PROPERTY  OR  OTHER
LIABILITIES  FOR  LOSS  OF,  DAMAGE TO, OR INJURY TO PERSONS OR PROPERTY
WHEN A LOCAL STATE OF EMERGENCY IS DECLARED PURSUANT TO SECTION  TWENTY-
FOUR  OF  THE EXECUTIVE LAW, WHEN THE GOVERNOR DECLARES A DISASTER EMER-
GENCY PURSUANT TO SECTION TWENTY-EIGHT OF THE EXECUTIVE LAW, OR WHEN THE
PRESIDENT ISSUES A MAJOR DISASTER OR EMERGENCY DECLARATION  PURSUANT  TO
THE  ROBERT  T.  STAFFORD  DISASTER  RELIEF AND EMERGENCY ASSISTANCE ACT
(P.L. 93-288), FOR CLAIMS ARISING FROM SUCH EMERGENCY.
  (1) AN INSURER SHALL ACKNOWLEDGE THE RECEIPT OF ALL CLAIMS IN  WRITING
TO  THE  CLAIMANT OR THE CLAIMANT'S AUTHORIZED REPRESENTATIVE IN ACCORD-
ANCE WITH REGULATIONS PROMULGATED BY THE SUPERINTENDENT;
  (2) IF THE INSURER WISHES ITS INVESTIGATION TO INCLUDE  AN  INSPECTION
OF  DAMAGED  OR DESTROYED PROPERTY, THE INSPECTION, WHETHER PERFORMED BY
THE INSURER, AN INDEPENDENT ADJUSTER, OR  OTHER  REPRESENTATIVE  OF  THE
INSURER,  SHALL  OCCUR IN ACCORDANCE WITH REGULATIONS PROMULGATED BY THE
SUPERINTENDENT.  FURTHERMORE, WHERE NECESSARY TO PROTECT THE HEALTH  AND
SAFETY  OF  THE  CLAIMANT, IMMEDIATE REPAIRS TO WINDOWS, EXTERIOR WALLS,
EXTERIOR DOORS, ROOFS, HEATING SYSTEMS,  WATER  SYSTEMS  AND  ELECTRICAL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05809-05-3

S. 3413--A                          2

SYSTEMS  MAY  BE MADE AND ALTERNATIVE PROOF OF LOSS SUCH AS PHOTOGRAPHS,
VIDEO RECORDINGS, INVENTORIES AND ALL RECEIPTS FOR REPAIRS  OR  REPLACE-
MENT PROPERTY SHALL SATISFY POLICY REQUIREMENTS;
  (3)  A CLAIM FILED WITH AN AGENT OF AN INSURER SHALL BE DEEMED TO HAVE
BEEN FILED WITH THE INSURER UNLESS, CONSISTENT WITH LAW OR CONTRACT, THE
AGENT NOTIFIES THE PERSON FILING THE CLAIM THAT THE AGENT IS NOT AUTHOR-
IZED TO RECEIVE NOTICES OF CLAIM; AND
  (4) AN INSURER SHALL FURNISH TO SUCH CLAIMANT, OR  CLAIMANT'S  AUTHOR-
IZED  REPRESENTATIVE, A NOTIFICATION OF ALL ITEMS, STATEMENTS AND FORMS,
IF ANY, WHICH THE INSURER REASONABLY BELIEVES WILL BE  REQUIRED  OF  THE
CLAIMANT  IN  ORDER  TO  INVESTIGATE SUCH CLAIM IN ACCORDANCE WITH REGU-
LATIONS PROMULGATED BY THE SUPERINTENDENT.
  (B)(1) AN INSURER SHALL, WITHIN FIFTEEN BUSINESS DAYS  OF  RECEIPT  OF
ALL  ITEMS,  STATEMENTS  AND FORMS REQUESTED UNDER THIS SECTION FROM THE
CLAIMANT, OR THE CLAIMANT'S AUTHORIZED REPRESENTATIVE, ADVISE THE CLAIM-
ANT IN WRITING WHETHER THE INSURER HAS ACCEPTED OR REJECTED THE CLAIM.
  (2) AN INSURER SHALL BE GRANTED A ONE-TIME EXTENSION OF FIFTEEN  BUSI-
NESS  DAYS  TO DETERMINE WHETHER A CLAIM SHOULD BE ACCEPTED OR REJECTED.
IF THE INSURER ELECTS TO UTILIZE THIS EXTENSION, IT SHALL SO NOTIFY  THE
CLAIMANT, OR THE CLAIMANT'S AUTHORIZED REPRESENTATIVE, IN WRITING.  SUCH
NOTIFICATION SHALL INCLUDE THE REASONS ADDITIONAL TIME IS NEEDED FOR THE
INVESTIGATION.
  (3)  ONCE  THE  CLAIM  IS  ACCEPTED  BY THE INSURER, THE INSURER SHALL
ADVISE THE CLAIMANT, OR THE  CLAIMANT'S  AUTHORIZED  REPRESENTATIVE,  IN
WRITING  OF  THE AMOUNT THE INSURER IS OFFERING TO SETTLE THE CLAIM. THE
INSURER SHALL ALSO PROVIDE TO THE CLAIMANT, OR THE CLAIMANT'S AUTHORIZED
REPRESENTATIVE, IN WRITING, OF ALL APPLICABLE POLICY PROVISIONS  REGARD-
ING THE CLAIMANT'S RIGHT TO REJECT AND APPEAL THE OFFER.
  (4) IN ANY CASE WHERE THE CLAIM IS REJECTED BY THE INSURER, THE INSUR-
ER  SHALL  NOTIFY  THE  CLAIMANT, OR THE CLAIMANT'S AUTHORIZED REPRESEN-
TATIVE, IN WRITING, OF ALL APPLICABLE POLICY  PROVISIONS  REGARDING  THE
CLAIMANT'S RIGHT TO APPEAL THE DECISION.
  (C)  AN INSURER SHALL PAY THE CLAIM NOT LATER THAN THREE BUSINESS DAYS
FROM THE SETTLEMENT OF THE CLAIM.
  (D) THE SUPERINTENDENT MAY PROMULGATE ANY RULES OR REGULATIONS  NECES-
SARY TO IMPLEMENT THE PROVISIONS OF THIS SECTION.
  S 2. This act shall take effect immediately.

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