NY State Senate Bill 2019-S8853

Archive: Last Bill Status - In Senate Committee Rules 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 29, 2020	referred to rules

co-Sponsors

2019-S8853 (ACTIVE) - Details

See Assembly Version of this Bill:: A10837
Current Committee:: Senate Rules
Law Section:: Insurance Law
Laws Affected:: Add §346, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S847, A498
2023-2024: S18, A418

2019-S8853 (ACTIVE) - Summary

Relates to requiring business interruption insurance to cover disease outbreaks as denying such coverage based on a disease outbreak is against public policy.

2019-S8853 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8853

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend the insurance law, in relation to requiring business
interruption insurance to cover disease outbreaks

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would require business interruption insurance offered to small
businesses and/or not-for profits of 250 or less employees to cover
disease. outbreaks.

 
SUMMARY OF PROVISIONS:

Section 1 amends the insurance law by adding section 346. Section 346
defines terms and declares that every clause or provision of insurance
insuring against loss or damage to property, which allows the insurer to
deny coverage based on a virus, bacterium or other microorganism shall
be null and void against public policy. This bill applies to businesses

and not-for-profits covered by such a policy with less than 250 eligible
employees in the State of New York.

Section 346 provides that an insurer which indemnifies an insured who
has filed a claim pursuant to its provisions may apply to the Super-
intendent of the Department of Financial Services for relief and
reimbursement from funds collected and made available for this purpose
as provided in the bill, pursuant to an additional special purpose
assessment under the general scheme already established by law to
recover the general expenses of the Department of Financial Services as
the regulator of the insurance industry in this State.  The superinten-
dent shall establish procedures for the submission and qualification of
claims by insurers which are eligible for reimbursement, incorporating
such standards as are necessary to protect against the submission of
fraudulent claims by insureds, and appropriate safeguards for insurers
to employ in the review and payment of such claims.

Section 346 authorizes the superintendent to impose upon, distribute
among, and collect from insurance companies, other than life and health
insurance companies, the additional amounts as may be necessary to
recover the amounts paid pursuant to the bill.

Section 2 states that this act shall take effect immediately and shall
apply to all business interruption insurance claims filed by an insured
and all policies or contracts issued, renewed, modified, altered or
amended on and after such effective date.

 
JUSTIFICATION:

COVID-19 has had a devastating impact on small business owners across
the state. Most small business owners have been paying for business
interruption insurance premiums for years with the thinking that they
would have coverage if a business interruption of the nature caused by
the COVID-19 pandemic were to take place. Unfortunately most of them
found out when the pandemic hit and they filed a claim that their insur-
ance company refused to pay out these claims and as a consequence so
many of our small businesses across the state and particularly in New
York City were forced to close. This bill would help address this issue
by stopping insurance companies from refusing to pay out claims based on
their virus and bacterium exclusion.

 
PRIOR LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

TBD

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all business
interruption insurance claims filed by an insured and all policies or
contracts issued, renewed, modified, altered or amended on and after
such effective date.

2019-S8853 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8853
 
                             I N  S E N A T E
 
                               July 29, 2020
                                ___________
 
 Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN  ACT  to  amend  the insurance law, in relation to requiring business
   interruption insurance to cover disease outbreaks
 
   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 346
 to read as follows:
   § 346. BUSINESS INTERRUPTION INSURANCE; DISEASE OUTBREAK. (A) FOR  THE
 PURPOSES OF THIS SECTION:
   (1) "BUSINESS" SHALL MEAN A BUSINESS REGISTERED WITH THE DEPARTMENT OF
 TAX AND FINANCE OR NOT-FOR-PROFIT CORPORATION REGISTERED WITH THE ATTOR-
 NEY GENERAL'S CHARITIES BUREAU.
   (2)  "ELIGIBLE  EMPLOYEE"  SHALL MEAN A FULL-TIME EMPLOYEE WHO WORKS A
 NORMAL WORK WEEK OF TWENTY-FIVE OR MORE HOURS.
   (3) "INCOME" SHALL MEAN TRADITIONAL BUSINESS INCOME AS  WELL  AS  NOT-
 FOR-PROFIT REVENUE FROM DONATIONS, SPONSORSHIPS, AND GRANTS.
   (4)  "NET  WRITTEN PREMIUMS RECEIVED" SHALL MEAN GROSS DIRECT PREMIUMS
 WRITTEN, LESS RETURN PREMIUMS THEREON AND DIVIDENDS CREDITED OR PAID  TO
 POLICYHOLDERS, AS REPORTED ON THE COMPANY'S ANNUAL FINANCIAL STATEMENT.
   (5)  "PREMIUM TAXES" SHALL MEAN PAYMENTS REQUIRED UNDER SUBSECTION (D)
 OF SECTION TWO THOUSAND ONE HUNDRED EIGHTEEN OF THIS CHAPTER.
   (B) (1) NOTWITHSTANDING ANY PROVISIONS OF LAW, RULE OR  REGULATION  TO
 THE  CONTRARY, EVERY CLAUSE OR PROVISION OF A POLICY OF INSURANCE INSUR-
 ING AGAINST LOSS OR DAMAGE TO  PROPERTY,  WHICH  INCLUDES,  BUT  IS  NOT
 LIMITED  TO, THE LOSS OF USE AND OCCUPANCY AND BUSINESS INTERRUPTION AND
 CONTINGENT BUSINESS INTERRUPTION,  WHICH  ALLOWS  THE  INSURER  TO  DENY
 COVERAGE BASED ON A VIRUS, BACTERIUM, OR OTHER MICROORGANISM THAT CAUSES
 DISEASE,  ILLNESS,  OR  PHYSICAL  DISTRESS OR THAT IS CAPABLE OF CAUSING
 DISEASE, ILLNESS, OR PHYSICAL DISTRESS SHALL BE NULL AND VOID AS AGAINST
 PUBLIC POLICY; PROVIDED, HOWEVER, THE REMAINING CLAUSES  AND  PROVISIONS
 OF  THE CONTRACT SHALL REMAIN IN EFFECT FOR THE DURATION OF THE CONTRACT
 TERM.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD16896-03-0

 S. 8853                             2
 
   (2) THE COVERAGE REQUIRED  BY  THIS  SUBSECTION  SHALL  INDEMNIFY  THE
 INSURED,  SUBJECT  TO THE LIMITS UNDER THE POLICY, FOR ANY LOSS OF BUSI-
 NESS OR BUSINESS INTERRUPTION AND CONTINGENT BUSINESS INTERRUPTION.
   (3)  THIS  SUBSECTION  SHALL APPLY TO POLICIES ISSUED TO INSUREDS WITH
 LESS THAN TWO HUNDRED FIFTY ELIGIBLE EMPLOYEES.
   (C)(1) AN INSURER, INCLUDING EXCESS LINES INSURERS, WHICH  INDEMNIFIES
 AN  INSURED  WHO  HAS  FILED  A CLAIM PURSUANT TO SUBSECTION (B) OF THIS
 SECTION MAY APPLY TO THE SUPERINTENDENT FOR RELIEF AND REIMBURSEMENT  BY
 THE  DEPARTMENT FROM FUNDS COLLECTED AND MADE AVAILABLE FOR THIS PURPOSE
 AS PROVIDED IN SUBSECTION (D) OF THIS SECTION.
   (2) THE SUPERINTENDENT SHALL ESTABLISH PROCEDURES FOR  THE  SUBMISSION
 AND   QUALIFICATION  OF  CLAIMS  BY  INSURERS  WHICH  ARE  ELIGIBLE  FOR
 REIMBURSEMENT PURSUANT TO THIS SECTION. THE SUPERINTENDENT SHALL  INCOR-
 PORATE  IN  THESE  PROCEDURES SUCH STANDARDS AS ARE NECESSARY TO PROTECT
 AGAINST THE SUBMISSION OF FRAUDULENT CLAIMS BY INSUREDS, AND APPROPRIATE
 SAFEGUARDS FOR INSURERS TO EMPLOY IN THE  REVIEW  AND  PAYMENT  OF  SUCH
 CLAIMS.
   (D)(1)  THE  SUPERINTENDENT  IS  AUTHORIZED TO IMPOSE UPON, DISTRIBUTE
 AMONG, AND COLLECT FROM THE COMPANIES, INCLUDING EXCESS LINES  INSURERS,
 ENGAGED IN BUSINESS PURSUANT TO THIS CHAPTER, SUCH ADDITIONAL AMOUNTS AS
 MAY  BE  NECESSARY  TO  RECOVER THE AMOUNTS PAID TO INSURERS PURSUANT TO
 SUBSECTION (C) OF THIS SECTION.
   (2) THE ADDITIONAL SPECIAL PURPOSE APPORTIONMENT  AUTHORIZED  PURSUANT
 TO  PARAGRAPH ONE OF THIS SUBSECTION SHALL BE DISTRIBUTED IN THE PROPOR-
 TION THAT THE NET WRITTEN PREMIUMS, OR PREMIUM  TAXES  IN  THE  CASE  OF
 EXCESS  LINES  INSURERS,  RECEIVED BY EACH COMPANY SUBJECT TO THE APPOR-
 TIONMENT AUTHORIZED BY THIS SECTION FOR INSURANCE WRITTEN OR RENEWED  ON
 RISKS  IN  THIS  STATE  DURING  THE CALENDAR YEAR IMMEDIATELY PRECEDING,
 BEARS TO THE SUM TOTAL OF ALL SUCH  NET  WRITTEN  PREMIUMS,  OR  PREMIUM
 TAXES  IN  THE  CASE OF EXCESS LINES INSURERS, RECEIVED BY ALL COMPANIES
 WRITING THAT INSURANCE OR COVERAGE WITHIN THE STATE DURING THAT CALENDAR
 YEAR, AS REPORTED.
   § 2. This act shall take effect immediately and  shall  apply  to  all
 business interruption insurance claims filed by an insured and all poli-
 cies  or  contracts issued, renewed, modified, altered or amended on and
 after such effective date.

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Senate Bill S8853

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

co-Sponsors

2019-S8853 (ACTIVE) - Details

2019-S8853 (ACTIVE) - Summary

2019-S8853 (ACTIVE) - Sponsor Memo

2019-S8853 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8853

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Sponsored By

Andrew Gounardes

Archive: Last Bill Status - In Senate Committee Rules Committee

co-Sponsors

Zellnor Myrie

2019-S8853 (ACTIVE) - Details

2019-S8853 (ACTIVE) - Summary

2019-S8853 (ACTIVE) - Sponsor Memo

2019-S8853 (ACTIVE) - Bill Text download pdf

Comments