NY State Senate Bill 2021-S1291

Senate Bill S1291

2021-2022 Legislative Session

Relates to continuing education for licensed persons and qualifications for independent adjusters

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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

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to insurance returned to senate died in assembly
Mar 22, 2021	referred to insurance delivered to assembly passed senate
Mar 18, 2021	advanced to third reading
Mar 17, 2021	2nd report cal.
Mar 16, 2021	1st report cal.569
Jan 11, 2021	referred to insurance

Votes

- Mar 22, 2021 - Floor Vote
  S1291
  
  45
  
  Aye
  
  18
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Mar 22, 2021
      
      aye (45)
      
      Addabbo Jr.
      
      Bailey
      
      Benjamin
      
      Biaggi
      
      Breslin
      
      Brisport
      
      Brooks
      
      Brouk
      
      Comrie
      
      Cooney
      
      Felder
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Harckham
      
      Hinchey
      
      Hoylman-Sigal
      
      Jackson
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      Liu
      
      Mannion
      
      Mattera
      
      May
      
      Mayer
      
      Myrie
      
      Palumbo
      
      Parker
      
      Persaud
      
      Ramos
      
      Reichlin-Melnick
      
      Rivera
      
      Ryan
      
      Salazar
      
      Sanders Jr.
      
      Savino
      
      Sepúlveda
      
      Serrano
      
      Skoufis
      
      Stavisky
      
      Stewart-Cousins
      
      Thomas
      
      nay (18)
      
      Akshar
      
      Borrello
      
      Boyle
      
      Gallivan
      
      Griffo
      
      Helming
      
      Jordan
      
      Lanza
      
      Martucci
      
      O'Mara
      
      Oberacker
      
      Ortt
      
      Rath III
      
      Ritchie
      
      Serino
      
      Stec
      
      Tedisco
      
      Weik
  Mar 16, 2021 - Insurance Committee Vote
  S1291
  
  8
  
  Aye
  
  2
  
  Nay
  
  1
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Insurance Committee Vote: Mar 16, 2021
      
      aye (8)
      
      Breslin
      
      Brooks
      
      Cooney
      
      Gounardes
      
      Harckham
      
      Kennedy
      
      Parker
      
      Sanders Jr.
      
      nay (2)
      
      Helming
      
      O'Mara
      
      aye wr (1)
      
      Serino

co-Sponsors

2021-S1291 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §2618, amd §§2108, 2110 & 2132, Ins L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S7802
2013-2014: S5183
2015-2016: S7814
2017-2018: S1506
2019-2020: S4454
2023-2024: S9862

2021-S1291 (ACTIVE) - Summary

Relates to claims for loss or damage to real property; creates continuing education requirements for licensed persons and qualifications for public and independent adjusters; allows for a revocation of licenses with an opportunity to reapply for such licenses.

2021-S1291 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S1291

SPONSOR: BROOKS
 
TITLE OF BILL:

An act to amend the insurance law, in relation to claims for loss or
damage to real property, continuing education for licensed persons and
qualifications for independent adjusters

 
PURPOSE:

This bill intends to curb the potential for fraud and abuse by unscrupu-
lous public or independent insurance adjusters. It does so by:

*Requiring continuing education for public and independent insurance
adjusters;

*Prohibiting an adjuster from receiving anything of value in exchange
for a referral of a potential client; and

*Allowing and setting the conditions under which the Insurance Super-
intendent may revoke, suspend or refuse or renew the license of public

or independent adjusters.

 
SUMMARY OF PROVISIONS:

Section 1. adds a new section 2617 to the Insurance law, to prohibit an
insurer from requiring repairs to be completed by any particular entity
or individual. Further this section provides that when an insurer,
third-party administrator, independent adjuster, or public
adjuster_suggests or recommends repairs be made by a particular entity
or individual, the insurer would have to disclose any controlling or
business interest that it has in any entity or individual that it recom-
mends or suggests.

Sections 2 and 3. amend various subsections of § 2108 of the Insurance
Law, to require that independent adjusters participate in continuing
education.

Section 4. amends subsection (a) of § 2110 of the Insurance Law and
allows the superintendent of the Insurance Department to refuse to
renew, revoke, or suspend the license of any insurance agent, insurance
broker, reinsurance intermediary, insurance consultant or adjuster that
has violated any law regarding his or her professional capacity, for a
duration the superintendent deems appropriate. The superintendent can
also suspend or refuse to renew a license for a duration that he or she
determines adequate to discipline a violation of this section.

Section 5. amends paragraph 2 of subsection (c) of § 2132 of the insur-
ance law to indicate that during the same calendar year biennial licens-
ing period, independent adjusters may use accumulated continuing educa-
tion credits to meet the requirements of similar classes of licenses. In
doing so, independent adjusters are provided the same benefit as public
adjusters.

Section 6. is the enacting clause.

 
JUSTIFICATION:

In the past decade, fraud committed by a small number of unscrupulous
public and independent adjusters has placed a black cloud over much of
the insurance industry. The actions of these few have caused undue harm
to both policy holders and adjusters who operate under the highest
professional standards. Most of those accused of committing fraud have
pled guilty, received fines and or jail time. To date, many of them
retain their New York State licenses.

This legislation will help the adjusting industry rid itself of "bad
apples" by imposing continuing education requirements and imposing revo-
cation and suspension guidelines for public and independent adjusters
alike.

The bill will also prevent conflicts of interest that may arise when an
insurer or adjuster has controlling interest in a construction firm. For
example, an insurance company may consult a sister construction firm in
which it has controlling interest -- to adjust housing repair claims.

In return for the free adjustment, the construction firm may receive the
contract for the repairs or other construction. A conflict of interest
arises when the construction company receives such a contract and
inflates the estimate, resulting in higher premiums to policy holders.
This practice causes a public interest to be violated due to the lack of
objectivity.

The bill helps avoid such conflicts in three ways. First, it prevents
insurers from requiring repairs be made by a particular construction
firm. If recommendations are made that repairs be done by a particular
firm, the insurer must disclose to the insured whether the insurer has a
controlling interest in such firm. Second, it prohibits public and inde-
pendent adjusters from paying or giving gifts to people or companies in
exchange for potential client referral. Third, it prohibits public or
independent adjusters from having any controlling interest in a
construction, salvage or appraisal firm.

 
FISCAL IMPLICATIONS:

None to the state

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.

2021-S1291 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1291
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 11, 2021
                                ___________
 
 Introduced  by  Sen.  BROOKS -- 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  claims  for  loss  or
   damage to real property, continuing education for licensed persons and
   qualifications for independent adjusters

   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  2618
 to read as follows:
   §  2618.  CLAIMS  FOR  LOSS  OR  DAMAGE TO REAL PROPERTY; REPAIRS. (A)
 UNLESS OTHERWISE PRESCRIBED WITHIN THE  INSURANCE  POLICY,  WHENEVER  AN
 INSURED  SUFFERS A LOSS OR DAMAGE TO REAL PROPERTY, NO INSURER PROVIDING
 COVERAGE THEREFOR SHALL REQUIRE THAT REPAIRS BE COMPLETED BY  A  PARTIC-
 ULAR ENTITY OR INDIVIDUAL.
   (B) NOTWITHSTANDING SUBSECTION (A) OF THIS SECTION, AN INSURER, THIRD-
 PARTY ADMINISTRATOR, INDEPENDENT ADJUSTER, OR PUBLIC ADJUSTER MAY RECOM-
 MEND  OR  SUGGEST  REPAIRS BE MADE BY A PARTICULAR ENTITY OR INDIVIDUAL,
 PROVIDED THAT ANY FINANCIAL INTEREST IN SUCH ENTITY OR  INDIVIDUAL  THAT
 THEY RECOMMEND OR SUGGEST IS ALSO DISCLOSED.
   §  2.  Paragraph  1 of subsection (f) of section 2108 of the insurance
 law is amended to read as follows:
   (1) The superintendent shall, in order to determine  the  trustworthi-
 ness and competency to act as an independent adjuster of each individual
 applicant for such license, and of each proposed sub-licensee, except in
 the case of a renewal license, require every such individual to take and
 pass,  to  the  satisfaction  of  the superintendent, a personal written
 examination.  AN INDIVIDUAL SHALL NOT BE DEEMED QUALIFIED  TO  TAKE  THE
 EXAMINATION  WITHOUT HAVING DEMONSTRATED BY EVIDENCE SATISFACTORY TO THE
 SUPERINTENDENT THAT: (A) THE  INDIVIDUAL  POSSESSES  A  MINIMUM  OF  ONE
 YEAR'S  EXPERIENCE IN THE INSURANCE BUSINESS, WITH INVOLVEMENT IN SALES,
 UNDERWRITING, CLAIMS, OR OTHER EXPERIENCE CONSIDERED SUFFICIENT  BY  THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD03591-01-1

 S. 1291                             2
 
 SUPERINTENDENT; OR (B) THE INDIVIDUAL SUCCESSFULLY COMPLETED FORTY HOURS
 OF  FORMAL  TRAINING  IN  A  COURSE, PROGRAM OF INSTRUCTION, OR SEMINARS
 APPROVED BY THE SUPERINTENDENT. The  superintendent  may  prescribe  the
 types  of  written examinations according to the kind or kinds of insur-
 ance claims [which] THAT the applicant is to be licensed to  investigate
 and adjust.
   §  3. Subsection (r) of section 2108 of the insurance law, as added by
 chapter 264 of the laws of 1998, is amended to read as follows:
   (r) (1) The following continuing education requirements shall apply to
 resident and non-resident persons  licensed  as  public  OR  INDEPENDENT
 adjusters.
   (2)  Resident and non-resident persons licensed as public OR INDEPEND-
 ENT adjusters and any person previously so licensed  whose  license  was
 not  in  effect  on  the  effective  date of this subsection and who has
 subsequently been relicensed pursuant to the provisions of this article,
 shall biennially satisfactorily complete such courses or programs as may
 be approved by the superintendent, as follows:
   (A) Any person holding a license as a public OR  INDEPENDENT  adjuster
 shall,  during  each  full  biennial  licensing  period,  satisfactorily
 complete courses or programs of instruction or attend seminars as may be
 approved by the superintendent equivalent to  fifteen  credit  hours  of
 instruction.
   (B)  During the same calendar year biennial licensing period, a licen-
 see may  use  accumulated  continuing  education  credits  to  meet  the
 requirements  of  similar classes of licenses including those authorized
 by subsection (b) of section two thousand one hundred three, section two
 thousand one hundred four, section two thousand  one  hundred  seven  of
 this  article  with  respect  to general insurance consultants, and THIS
 section [two thousand one hundred eight of this article] with respect to
 public AND INDEPENDENT adjusters.
   (C) Excess credit hours  accumulated  during  any  biennial  licensing
 period shall not carry forward to the next biennial licensing period for
 that same class of license.
   (3) (A) The courses or programs of instruction successfully completed,
 which shall be deemed to meet the superintendent's standards for contin-
 uing education shall be:
   (i) Courses, programs of instruction or seminars, approved as to meth-
 od and content by the superintendent, covering portions of the principal
 branches  of  insurance related to the kinds of insurance covered by the
 public OR INDEPENDENT adjusting license, and given by a  degree  confer-
 ring college or university whose curriculum is registered with the state
 education  department  at  the time the person takes the course, whether
 such course be given as part of such curriculum or separately, or by any
 other institution, association,  trade  association  or  insurer,  which
 maintains  equivalent standards of instruction and which shall have been
 approved for such purpose by the superintendent.
   (ii) Continuing education as required by the state in which a  non-re-
 sident  licensee  resides  and  maintains an office, provided the super-
 intendent  deems  them  equivalent  to  New  York  continuing  education
 requirements.  If  the  state in which the non-resident licensee resides
 and maintains an office has no continuing education requirements, or the
 superintendent does not deem them equivalent, the licensee must  satisfy
 New York continuing education requirements.
   (B)  The  number  of  credit  hours assigned to each of the courses or
 programs of instruction set forth in paragraph one  of  this  subsection
 shall be determined by the superintendent.

 S. 1291                             3
 
   (4)  A  person  who  teaches any approved course of instruction or who
 lectures at any approved seminar, and who is subject to these continuing
 education requirements shall be granted the same number of credit  hours
 as  would be granted to a person taking and successfully completing such
 course,  seminar  or  program,  provided that such credit hours shall be
 credited only once per approved course  during  any  biennial  licensing
 period.
   (5)  Every  person  subject to these continuing education requirements
 shall furnish, in a form satisfactory  to  the  superintendent,  written
 certification  attesting  to the course or programs of instruction taken
 and successfully completed by such person, and executed by the  sponsor-
 ing organization or its authorizing representative.
   (6)  (A)  Any  person  failing to meet applicable continuing education
 requirements shall not be eligible to renew the license.
   (B) Any person whose license was not renewed shall not be eligible  to
 become  relicensed during  the next biennial licensing period until that
 person has demonstrated to the satisfaction of the  superintendent  that
 continuing education requirements for the last biennial licensing period
 were met.
   (C)  Any person whose license was not renewed pursuant to subparagraph
 (A) of this paragraph, who accumulates sufficient credit hours  for  the
 prior licensing period to qualify for relicensing in the biennial period
 following such non-renewal, may not apply those same credit hours toward
 the continuing education requirements for the current biennial licensing
 period.
   (7)  (A)  Any entity eligible to provide continuing education courses,
 programs of instruction, or seminars shall  file  for  approval  by  the
 superintendent  on  a  biennial  basis,  to  conform  with  its areas of
 instruction, a provider organization application and a course submission
 application for each course, program, and seminar.
   (B) The provider organization application shall include the  names  of
 all  instructors  to be used during the contract period, and instructors
 may be added during the  period  by  notifying  the  superintendent  and
 paying the appropriate filing fee.
   (C)  The  completed applications shall be returned in a timely manner,
 as specified by the superintendent with a non-refundable filing  fee  of
 two hundred dollars per organization, fifty dollars per course, program,
 and seminar, and fifty dollars per instructor.
   (D)  Approval  of  the  application  shall be at the discretion of the
 superintendent.
   (8) Each licensee shall pay a biennial fee of ten dollars per license,
 for continuing education certificate filing and  recording  charges,  to
 the superintendent, or, at the direction of the superintendent, directly
 to an organization under contract to provide continuing education admin-
 istrative services.
   §  4.  The  opening paragraph of subsection (a) of section 2110 of the
 insurance law, as amended by chapter 499 of the laws of 2009, is amended
 to read as follows:
   The superintendent may refuse to renew, revoke, or may suspend  for  a
 period  the  superintendent  determines  the  license  of  any insurance
 producer, insurance consultant, PUBLIC OR INDEPENDENT adjuster  or  life
 settlement  broker,  if,  after  notice  and hearing, the superintendent
 determines that the licensee or any sub-licensee has:
   § 5. Paragraph 2 of subsection (c) of section 2132  of  the  insurance
 law,  as  amended by chapter 264 of the laws of 1998, is amended to read
 as follows:

 S. 1291                             4
 
   (2) During the same calendar year biennial licensing period, a  licen-
 see  may  use  accumulated  continuing  education  credits  to  meet the
 requirements of similar classes of licenses, as follows: (A)  subsection
 (a)  of  section two thousand one hundred three and section two thousand
 one  hundred  seven  of  this  article  with  respect  to life insurance
 consultants; or (B) subsection (b) of section two thousand  one  hundred
 three,  section  two thousand one hundred four, section two thousand one
 hundred seven of this article with respect to general insurance consult-
 ants, and section two thousand one hundred eight of  this  article  with
 respect to public AND INDEPENDENT adjusters.
   §  6. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.

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Senate Bill S1291

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Sponsored By

John E. Brooks