NY State Senate Bill 2015-S1398

Senate Bill S1398

2015-2016 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 06, 2016	referred to insurance
Jan 12, 2015	referred to insurance

2015-S1398 (ACTIVE) - Details

See Assembly Version of this Bill:: A4458
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §2616, Ins L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S3413, A1092
2017-2018: S1476, A1568
2019-2020: S3553, A7097
2021-2022: S6595, A2236
2023-2024: S5201, A2078

2015-S1398 (ACTIVE) - Summary

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

2015-S1398 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S1398

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:

Section 1. Adds a new section 2616 to the insurance law to 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.

Section 2. Effective date.

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:

S3413-A/A1092-A: 2013 - Insurance Committee/Passed Assembly
2014 - Insurance Committee/Insurance Committee

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately.

2015-S1398 (ACTIVE) - Bill Text download pdf

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

                                  1398

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 12, 2015
                               ___________

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.
  (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
SYSTEMS MAY BE MADE AND ALTERNATIVE PROOF OF LOSS SUCH  AS  PHOTOGRAPHS,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03167-02-5

S. 1398                             2

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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