NY State Senate Bill 2021-S4977

Senate Bill S4977

2021-2022 Legislative Session

Creates a homeowners' bill of rights to inform consumers with regard to insuring against catastrophic loss

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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to insurance
Feb 22, 2021	referred to insurance

2021-S4977 (ACTIVE) - Details

See Assembly Version of this Bill:: A6981
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §§3444-a & 338, amd §2601, Ins L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S3045
2015-2016: S4048
2017-2018: S6166, A8552
2019-2020: S3866, A7300
2023-2024: S4184

2021-S4977 (ACTIVE) - Summary

Creates a homeowners' bill of rights; directs the superintendent of financial services to issue a consumer guide on insuring against catastrophic losses.

2021-S4977 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4977

SPONSOR: LANZA
 
TITLE OF BILL:

An act to amend the insurance law, in relation to creating a homeowners'
bill of rights and a consumer guide on insuring against catastrophic
loss caused by natural disasters

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to establish a Homeowners' Bill of Rights
that would educate consumers about the details of their insurance poli-
cies and their rights under the law.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill would amend the Insurance law by adding a new
section 3444-a, the "Homeowners Bill of Rights." This section would
obligate certain insurers to provide to insured or potentially insured
parties written disclosures describing: coverage or limitations on

coverage for losses caused by certain catastrophic occurrences, informa-
tion related to claims investigation and processing, the rights of the
insured under the law, that the provisions of the policy could be modi-
fied or changed pursuant to state or federal law following a disaster or
emergency, the insurer's contact information, information on obtaining
the Consumer's Guide on Insuring Against Catastrophic Losses, and any
other information deemed necessary by the Superintendent. In addition,
when the insured's policy does not include coverage for certain
catastrophic occurrences, the insurer would be required to provide
information on additional coverage options.

Section 2 of the bill would amend Section 2601 of the insurance law to
include a new paragraph (7). This paragraph would state that the knowing
misrepresentation of or failure to provide pertinent facts of policy
provisions to claimants, and the failure to comply with those policy
provisions, shall constitute an unfair claim settlement practice.

Section 3 of the bill would add a new section 338 to the Insurance law.
This section would instruct the Superintendent to create a Consumer's
Guide on Insuring Against Catastrophic Losses, and outlines the informa-
tion which the Superintendent must include in the Guide. The Guide would
include the ways in which certain occurrences can cause catastrophic
losses, the types of insurance that provide coverage against catastroph-
ic losses, information on which type of weather, and natural disasters.

Other occurrences and catastrophic losses are typically excluded from
insurance policies but it will include how a consumer may obtain cover-
age for those exclusions, steps a consumer can-take to prepare for a
natural disaster (or other catastrophic loss), steps a consumer can take
to facilitate the timely processing of an insurance claim, an explana-
tion of policyholder's rights in law and regulation, and a department
toll-free consumer hotline and website address through which consumers
may initiate complaints and request general information about insurance.
The department would be able to satisfy these requirements through sepa-
rate or supplemental publications and updates, and the Superintendent
would be required to post the "Consumer Guide on insuring Against
Catastrophic Losses" on the Department's website.

 
JUSTIFICATION:

Following Superstorm Sandy and Tropical Storms Irene and Lee, many poli-
cyholders were surprised that their insurance company either rejected
their claim or offered them a settlement amount that was significantly
lower than the cost of the damages. Many policyholders thought that
their existing insurance policy provided sufficient coverage for water
damage and other catastrophic losses caused by these storms. Often,
there were long delays in the investigation and settlement of claims,
leaving home and business owners in limbo for weeks, sometimes months.
It became clear to the victims of these storms that insurance policies
can be complex, the claims process can be burdensome for the policyhold-
er, and insurance companies can be unresponsive at a time when assist-
ance is needed the most.  Policyholders should be made aware of the
different insurance coverage options available, the benefits of each
option, and their rights under the law.

This bill would address these issues by requiring insurers to provide
insureds and prospective insureds with a notice containing a Homeowners'
Bill of Rights. The notice would inform consumers of the coverage
provided and any exclusions, how they can obtain additional coverage,
their rights under the law, and other information that will educate
consumers about their insurance coverage. This will ensure that policy-
holders have coverage that meets their needs.

 
PRIOR LEGISLATIVE HISTORY:

2019: S.3866 - Referred to Insurance / A.7300 - Referred to Insurance
2018: S.3866 -  Referred to Insurance / A.7300 -  Referred to Insurance
2017: S.6166 -  Referred to Insurance/ A.8552 - Referred to Insurance
2016: S.6166 - Referred to Insurance / A.8552 - Referred to Insurance
2015: S.4048 -   Referred to Insurance
2014: S.3045 - Referred to Insurance
2013: S.3045 - Referred to Insurance

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect on the same date and in the same manner as
section 27 of part H of chapter 60 of the laws of 2014 takes effect.

2021-S4977 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4977
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 22, 2021
                                ___________
 
 Introduced  by  Sen.  LANZA  -- 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 creating a homeowners'
   bill of rights and a consumer guide on insuring  against  catastrophic
   loss caused by natural disasters

   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 3444-a
 to read as follows:
   § 3444-A. HOMEOWNERS' BILL OF RIGHTS.  (A)  ANY  INSURER  THAT  WRITES
 PERSONAL  LINES  INSURANCE  OR  COMMERCIAL LINES INSURANCE POLICIES THAT
 COVER LOSS OF OR DAMAGE TO REAL PROPERTY, PERSONAL  PROPERTY,  OR  OTHER
 LIABILITIES  FOR  LOSS OF OR DAMAGE TO PROPERTY SHALL, UPON ISSUANCE AND
 RENEWAL OF ANY SUCH POLICY OR CONTRACT, PROVIDE TO AN INSURED OR  POTEN-
 TIAL  INSURED  WRITTEN  DETAILED  DISCLOSURE  IN  A NOTICE PRESCRIBED OR
 APPROVED BY THE SUPERINTENDENT DESCRIBING CLEARLY AND IN PLAIN  LANGUAGE
 THE FOLLOWING:
   (1)  ANY  AND  ALL  COVERAGE  FOR  LOSS CAUSED BY CERTAIN OCCURRENCES,
 INCLUDING BUT NOT LIMITED TO FIRE, WIND, WINDSTORM, MUDSLIDE, HURRICANE,
 SNOW, ICE, WATER SURGE, OR FLOOD, COVERAGES PROVIDED UNDER  THE  POLICY,
 ANY LIMITATIONS ON OR EXCLUSIONS FROM COVERAGE, CIRCUMSTANCES THAT WOULD
 INVALIDATE  COVERAGE  UNDER  THE POLICY, ANY APPLICABLE DEDUCTIBLES, AND
 WHEN SUCH DEDUCTIBLES SHALL BE TRIGGERED;
   (2) ALL INFORMATION RELATED TO CLAIMS  INVESTIGATION  AND  PROCESSING,
 INCLUDING BUT NOT LIMITED TO THE PROCESS BY WHICH THE INSURED MAY FILE A
 CLAIM,  ALL  APPLICABLE  TIME FRAMES REQUIRED BY LAW AND REGULATION, ALL
 NECESSARY PROOF OF LOSS INFORMATION AND OTHER  INFORMATION  THE  INSURER
 MAY  REQUIRE FROM THE INSURED, THE PROCESS BY WHICH THE INSURED MAY FILE
 A COMPLAINT WITH THE DEPARTMENT, AND ANY OTHER INFORMATION DEEMED NECES-
 SARY BY THE SUPERINTENDENT;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06999-01-1

 S. 4977                             2
 
   (3) ANY AND ALL RIGHTS A CLAIMANT HAS UNDER THE LAWS AND POLICY WHEN A
 CLAIM IS DENIED OR WHEN THE CLAIMANT REJECTS A SETTLEMENT OFFER FROM THE
 INSURER, INCLUDING THEIR RIGHT TO FILE A COMPLAINT WITH THE DEPARTMENT;
   (4)  THAT  THE  PROVISIONS  OF  THIS POLICY MAY BE MODIFIED OR CHANGED
 PURSUANT TO STATE OR FEDERAL LAW WHEN A  LOCAL  STATE  OF  EMERGENCY  IS
 DECLARED  PURSUANT TO SECTION TWENTY-FOUR OF THE EXECUTIVE LAW, WHEN THE
 GOVERNOR DECLARES A DISASTER EMERGENCY PURSUANT TO SECTION  TWENTY-EIGHT
 OF  THE EXECUTIVE LAW, OR WHEN THE PRESIDENT OF THE UNITED STATES ISSUES
 A MAJOR DISASTER OR EMERGENCY DECLARATION  PURSUANT  TO  THE  ROBERT  T.
 STAFFORD  DISASTER RELIEF AND EMERGENCY ASSISTANCE ACT (P.L. 93-288) AND
 HOW THE INSURED MAY OBTAIN INFORMATION ABOUT ANY SUCH  MODIFICATIONS  OR
 CHANGES;
   (5)  INFORMATION ON HOW THE INSURED MAY CONTACT THE INSURER, INCLUDING
 THE INSURER'S BUSINESS HOURS, MAILING ADDRESS, PHONE NUMBER, FAX NUMBER,
 WEBSITE ADDRESS AND EMAIL; AND
   (6) INFORMATION ON HOW THE INSURED CAN OBTAIN THE  CONSUMER  GUIDE  ON
 INSURING  AGAINST CATASTROPHIC LOSSES CREATED BY THE DEPARTMENT PURSUANT
 TO SECTION THREE HUNDRED THIRTY-EIGHT OF  THIS  CHAPTER  AND  ANY  OTHER
 GUIDES, PAMPHLETS, OR OTHER INFORMATION THE DEPARTMENT HAS MADE PUBLICLY
 AVAILABLE THAT WOULD BE BENEFICIAL TO THE INSURED.
   (B)  IN  THE  EVENT  THAT  A  POLICY SUBJECT TO SUBSECTION (A) OF THIS
 SECTION DOES NOT INCLUDE COVERAGE FOR DAMAGE  AS  A  RESULT  OF  WEATHER
 CONDITIONS,  NATURAL  DISASTERS, OR OTHER OCCURRENCES, INCLUDING BUT NOT
 LIMITED TO FIRE, WIND, WINDSTORM, MUDSLIDE, HURRICANE, SNOW, ICE,  WATER
 SURGE,  OR  FLOOD,  THE  INSURER  OR  PRODUCER  SHALL, UPON ISSUANCE AND
 RENEWAL OF ANY SUCH POLICY OR CONTRACT, PROVIDE TO AN INSURED OR  POTEN-
 TIAL  INSURED  INFORMATION ON ANY ADDITIONAL COVERAGE OPTIONS, INCLUDING
 ADDITIONAL POLICIES AND RIDERS, THE NEW YORK PROPERTY  INSURANCE  UNDER-
 WRITING ASSOCIATION, THE COASTAL MARKET ASSISTANCE PROGRAM, THE NATIONAL
 FLOOD  INSURANCE  PROGRAM,  AND ANY OTHER OPTIONS AUTHORIZED BY STATE OR
 FEDERAL LAW.
   § 2. Paragraphs 7 and 8 of subsection  (a)  of  section  2601  of  the
 insurance  law, paragraph 7 as amended and paragraph 8 as added by chap-
 ter 458 of the laws of 2018, are amended and a new paragraph 9 is  added
 to read as follows:
   (7)  submitting  reasonably rendered claims to the independent dispute
 resolution process  established  under  article  six  of  the  financial
 services law; [or]
   (8)  artificially  deflating  or otherwise lowering cost data used for
 adjusted claims, or using cost data that  is  not  appropriate  for  the
 region  of  the state where the loss occurred; this shall include but is
 not limited to claims adjusted by a person  issued  a  temporary  permit
 pursuant  to subsection (n) of section two thousand one hundred eight of
 this chapter[.]; OR
   (9) KNOWINGLY MISREPRESENTING OR FAILING TO PROVIDE PERTINENT FACTS OF
 POLICY PROVISIONS TO CLAIMANTS AS REQUIRED  BY  SECTION  THREE  THOUSAND
 FOUR  HUNDRED  FORTY-FOUR-A  OF THIS CHAPTER AND NOT COMPLYING WITH SUCH
 POLICY PROVISIONS, INCLUDING ESTABLISHED TIME FRAMES FOR  INVESTIGATION,
 CLAIMS PROCESSING AND SETTLEMENT, AND PAYMENT OF CLAIMS.
   §  3. The insurance law is amended by adding a new section 338 to read
 as follows:
   § 338. CONSUMER GUIDE ON INSURING AGAINST CATASTROPHIC LOSSES. (A) SIX
 MONTHS AFTER THE EFFECTIVE DATE  OF  THIS  SECTION,  THE  SUPERINTENDENT
 SHALL  ISSUE  AND  UPDATE,  AS  NECESSARY,  A CONSUMER GUIDE ON INSURING
 AGAINST CATASTROPHIC LOSSES THAT SHALL CONTAIN COMPREHENSIVE INFORMATION

 S. 4977                             3
 
 WRITTEN IN PLAIN LANGUAGE IN A CLEAR AND UNDERSTANDABLE FORMAT,  INCLUD-
 ING THE FOLLOWING:
   (1)  THE  WAYS IN WHICH DIFFERENT TYPES OF WEATHER CONDITIONS, NATURAL
 DISASTERS, OR OTHER OCCURRENCES CAN CAUSE CATASTROPHIC LOSSES, INCLUDING
 BUT NOT LIMITED TO DAMAGE FROM FIRE, WIND, WINDSTORM,  MUDSLIDE,  HURRI-
 CANE, SNOW, ICE, EXTREME COLD, WATER SURGE, AND FLOOD;
   (2)  THE  TYPES  OF  INSURANCE AVAILABLE THAT PROVIDE COVERAGE AGAINST
 CATASTROPHIC LOSSES FOR BOTH HOMEOWNERS AND  BUSINESSES,  A  LISTING  OF
 COMPANIES THAT PROVIDE SUCH COVERAGE, AND RECOMMENDATIONS AS TO HOW BEST
 TO  SHOP FOR AND COMPARE PRICES, SERVICE AND QUALITY OF INSURANCE COVER-
 AGE;
   (3) A LIST OF THE EXCLUSIONS TYPICALLY  FOUND  IN  SUCH  COVERAGE  AND
 INFORMATION  ON  HOW A CONSUMER MAY OBTAIN COVERAGE FOR SUCH EXCLUSIONS,
 INCLUDING A LISTING OF COMPANIES  THAT  PROVIDE  SUCH  COVERAGE  AND  AN
 EXPLANATION OF, INFORMATION ON, AND THE TYPES OF COVERAGE AVAILABLE FROM
 THE  NEW  YORK  PROPERTY INSURANCE UNDERWRITERS ASSOCIATION, THE COASTAL
 MARKET ASSISTANCE PROGRAM, AND THE NATIONAL FLOOD INSURANCE PROGRAM, AND
 OTHER OPTIONS AUTHORIZED BY STATE OR FEDERAL LAW;
   (4) STEPS A CONSUMER CAN TAKE TO PREPARE FOR  A  NATURAL  DISASTER  OR
 OTHER CATASTROPHIC LOSS;
   (5)  STEPS  A CONSUMER CAN TAKE FOLLOWING A CATASTROPHIC LOSS IN ORDER
 TO FACILITATE THE TIMELY PROCESSING OF THE  CONSUMER'S  INSURANCE  CLAIM
 AND AN EXPLANATION OF POLICYHOLDERS' RIGHTS AS PROVIDED IN LAW AND REGU-
 LATION; AND
   (6)  A  DEPARTMENT  TOLL  FREE  CONSUMER  HOT-LINE AND WEBSITE ADDRESS
 THROUGH WHICH CONSUMERS MAY INITIATE  COMPLAINTS,  AND  REQUEST  GENERAL
 INFORMATION ABOUT INSURANCE.
   (B)  THE  REQUIREMENTS SET FORTH IN SUBSECTION (A) OF THIS SECTION MAY
 BE SATISFIED BY SEPARATE OR SUPPLEMENTAL PUBLICATIONS AND UPDATES.
   (C) THE SUPERINTENDENT SHALL  POST  THE  CONSUMER  GUIDE  ON  INSURING
 AGAINST CATASTROPHIC LOSSES ON THE DEPARTMENT'S WEBSITE.
   § 4. This act shall take effect immediately.

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