S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1231--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 13, 2023
                                ___________
 
 Introduced by M. of A. LUNSFORD -- read once and referred to the Commit-
   tee  on  Insurance  --  recommitted  to  the Committee on Insurance in
   accordance with Assembly Rule 3, sec. 2 -- committee discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee

 AN ACT to amend the insurance law, in relation to contractual  liability
   insurance policies
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subsection (c) of section 7903 of the insur-
 ance law, as amended by chapter 578 of the laws of 2000, is  amended  to
 read as follows:
   (1)  insure  the  performance of all its obligations under all service
 contracts pursuant to [a] ONE OR  MORE  service  contract  reimbursement
 insurance  [policy] POLICIES issued by [an insurer] ONE OR MORE INSURERS
 authorized to issue service contract  reimbursement  insurance  in  this
 state  or  procured  by  an excess line licensee pursuant to section two
 thousand one hundred eighteen of this chapter.   EACH  SERVICE  CONTRACT
 REIMBURSEMENT  INSURANCE  POLICY  SHALL OBLIGATE THE INSURER THAT ISSUED
 SUCH POLICY TO EITHER DISCHARGE THE OBLIGATIONS AND LIABILITIES OF  SUCH
 PROVIDER UNDER THE TERMS OF THE SERVICE CONTRACTS ISSUED BY SUCH PROVID-
 ER,  INCLUDING THE RETURN OF UNEARNED PROVIDER FEES UPON ANY TERMINATION
 OR CANCELLATION OF SERVICE CONTRACTS, IN THE EVENT OF NON-PERFORMANCE OF
 ANY SUCH OBLIGATIONS OR LIABILITIES BY SUCH PROVIDER  OR  INDEMNIFY  THE
 PROVIDER  FOR  LOSSES  SUSTAINED  BY  REASON  OF THE PERFORMANCE OF SUCH
 PROVIDER'S OBLIGATIONS UNDER SERVICE CONTRACTS ISSUED PURSUANT  TO  THIS
 ARTICLE.  In  the  event  the  provider  fails to insure its obligations
 pursuant to this paragraph or in the event  that  such  insurance  shall
 lapse  or be terminated, the provider shall comply with either paragraph
 two or three of this subsection within forty-five days of the  insurance
 lapse or termination;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01943-04-4
              

 A. 1231--A                          2
 
   §  2. Subsection (b) of section 7905 of the insurance law, as added by
 chapter 614 of the laws of 1997, is amended to read as follows:
   (b)  Service  contracts insured under [a] ONE OR MORE service contract
 reimbursement insurance [policy] POLICIES pursuant to [paragarph]  PARA-
 GRAPH one of subsection (c) of section seven thousand nine hundred three
 of this article shall contain a statement in substantially the following
 form:    "Obligations  of  the  provider under this service contract are
 insured under a service contract reimbursement insurance policy. If  the
 provider  fails  to  pay or provide service on a claim within sixty days
 after proof of loss has been filed, the contract holder is  entitled  to
 make  a  claim  directly  against the insurer under the service contract
 reimbursement insurance policy." The service contract shall  also  state
 the  name  and  address  and a toll-free telephone number of the insurer
 under [the] EACH related service contract reimbursement insurance  poli-
 cy.
   § 3. This act shall take effect immediately.