Bill Text: NY A00147 | 2015-2016 | General Assembly | Introduced

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Bill Title: Enacts the "abusive insurance practices remedy act"; enacts provisions relating to unfair claim settlement practices; provides that an insurer doing business in this state shall be liable to a policy holder for such insurer's refusal to pay or unreasonable delay of payment to the policy holder if such refusal or delay was not substantially justified; enumerates instances whereby an insurer's refusal or delay of payment is not substantially justified including intentional negligence, failure to act in good faith, failure to provide written denial of claim and failure to make final determination of claim within six months.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2016-01-06 - referred to insurance [A00147 Detail]

Download: New_York-2015-A00147-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          147
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                      (PREFILED)
                                    January 7, 2015
                                      ___________
       Introduced  by M. of A. ROZIC, ABINANTI -- read once and referred to the
         Committee on Insurance
       AN ACT to amend the insurance law, in relation to enacting the  "abusive
         insurance practices remedy act"
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Short title. This act shall be known and may  be  cited  as
    2  the "abusive insurance practices remedy act".
    3    S  2.  The  insurance law is amended by adding a new section 2601-a to
    4  read as follows:
    5    S 2601-A. UNFAIR CLAIM SETTLEMENT  PRACTICES;  CIVIL  REMEDY.  (A)  AN
    6  INSURER  DOING BUSINESS IN THIS STATE SHALL BE LIABLE TO THE HOLDER OF A
    7  POLICY ISSUED OR RENEWED PURSUANT TO ARTICLE THIRTY-FOUR OF THIS CHAPTER
    8  FOR DAMAGES AS PROVIDED IN THIS SECTION UPON SUCH POLICY HOLDER  PROVING
    9  BY A PREPONDERANCE OF THE EVIDENCE THAT SUCH INSURER'S REFUSAL TO PAY OR
   10  UNREASONABLE DELAY IN PAYMENT TO THE POLICY HOLDER OF AMOUNTS CLAIMED TO
   11  BE  DUE  UNDER  A POLICY WAS NOT SUBSTANTIALLY JUSTIFIED.  AN INSURER IS
   12  NOT SUBSTANTIALLY JUSTIFIED IN REFUSING TO PAY OR IN UNREASONABLY DELAY-
   13  ING PAYMENT WHEN THE INSURER:
   14    (1) INTENTIONALLY, RECKLESSLY OR BY GROSS NEGLIGENCE FAILED TO PROVIDE
   15  THE POLICY HOLDER WITH ACCURATE INFORMATION CONCERNING POLICY PROVISIONS
   16  RELATING TO THE COVERAGE AT ISSUE;
   17    (2) FAILED TO EFFECTUATE IN GOOD FAITH A PROMPT,  FAIR  AND  EQUITABLE
   18  SETTLEMENT OF A CLAIM SUBMITTED BY SUCH POLICY HOLDER IN WHICH LIABILITY
   19  OF SUCH INSURER TO SUCH POLICY HOLDER WAS REASONABLY CLEAR;
   20    (3) FAILED TO PROVIDE A WRITTEN DENIAL OF A POLICY HOLDER'S CLAIM WITH
   21  A  FULL AND COMPLETE EXPLANATION OF SUCH DENIAL, INCLUDING REFERENCES TO
   22  SPECIFIC POLICY PROVISIONS WHEREVER POSSIBLE;
   23    (4) FAILED TO MAKE A FINAL DETERMINATION AND NOTIFY THE POLICY  HOLDER
   24  IN  WRITING  OF  ITS  POSITION  ON BOTH LIABILITY FOR, AND THE INSURER'S
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD00627-01-5
       A. 147                              2
    1  VALUATION OF, A CLAIM WITHIN SIX MONTHS OF THE DATE ON WHICH IT RECEIVED
    2  ACTUAL OR CONSTRUCTIVE NOTICE OF THE LOSS UPON WHICH THE CLAIM IS BASED;
    3  OR
    4    (5)  FAILED TO ACT IN GOOD FAITH BY COMPELLING POLICY HOLDER TO INSTI-
    5  TUTE SUIT TO RECOVER AMOUNTS DUE UNDER ITS POLICY BY  OFFERING  SUBSTAN-
    6  TIALLY  LESS  THAN  THE  AMOUNTS ULTIMATELY RECOVERED IN SUIT BROUGHT BY
    7  SUCH POLICY HOLDER.
    8    (B) ANY POLICY HOLDER WHO ESTABLISHES LIABILITY PURSUANT TO SUBSECTION
    9  (A) OF THIS SECTION AND THAT SUCH LIABILITY AROSE AS A RESULT OF  INTEN-
   10  TIONAL,  RECKLESS  OR  GROSSLY  NEGLIGENT  CONDUCT  BY THE INSURER OR AN
   11  EXPRESS OR IMPLIED POLICY OF THE INSURER FOR PROCESSING CLAIMS SHALL  BE
   12  ENTITLED  TO  RECOVER  PUNITIVE  DAMAGES  IN AN AMOUNT NOT MORE THAN THE
   13  TOTAL AMOUNT RECOVERED IN THE ACTION.
   14    (C) ANY POLICY HOLDER WHO ESTABLISHES LIABILITY PURSUANT TO SUBSECTION
   15  (A) OF THIS SECTION SHALL BE ENTITLED TO RECOVER, IN ADDITION TO AMOUNTS
   16  DUE UNDER THE POLICY, INTEREST, COSTS, AND  DISBURSEMENTS,  COMPENSATORY
   17  DAMAGES  AND  REASONABLE  ATTORNEYS'  FEES INCURRED BY THE POLICY HOLDER
   18  FROM THE DATE OF THE LOSS, IN RECOVERING  MONIES  DUE  PURSUANT  TO  THE
   19  TERMS OF THE POLICY.
   20    (D)  ANY POLICY HOLDER MAY RECOVER DAMAGES FROM AN INSURER DOING BUSI-
   21  NESS IN THIS STATE PURSUANT TO THIS SECTION EITHER AS PART OF AN  ACTION
   22  TO  RECOVER  UNDER  THE  TERMS  OF  AN INSURANCE POLICY OR IN A SEPARATE
   23  ACTION.
   24    (E) IN ANY TRIAL OF A CAUSE OF  ACTION  ASSERTED  AGAINST  AN  INSURER
   25  PURSUANT  TO  THIS  SECTION, EVIDENCE OF SETTLEMENT DISCUSSIONS, WRITTEN
   26  AND VERBAL OFFERS TO COMPROMISE  AND  OTHER  EVIDENCE  RELATING  TO  THE
   27  CLAIMS  PROCESS  SHALL  BE  ADMISSIBLE.  IF CAUSES OF ACTION RELATING TO
   28  LIABILITY OF THE INSURER UNDER THE POLICY AND  UNDER  THIS  SECTION  ARE
   29  ALLEGED  IN THE SAME ACTION, THE COURT MAY BIFURCATE THE TRIAL OF ISSUES
   30  SO AS TO AVOID PREJUDICE TO THE INSURER ON THE ISSUE OF LIABILITY  UNDER
   31  THE  POLICY  AND  FACILITATE  ADMISSIBILITY OF EVIDENCE ON THE CAUSES OF
   32  ACTION ASSERTED PURSUANT TO THIS SECTION.
   33    (F) ALL AMOUNTS RECOVERED  FROM  AN  INSURER  AS  ACTUAL  DAMAGES  AND
   34  REASONABLE  ATTORNEYS'  FEES  IN  ANY  ACTION AUTHORIZED IN THIS SECTION
   35  SHALL BE EXCLUDED BY THE INSURER IN ITS DETERMINATIONS OF  THE  PREMIUMS
   36  IT WILL CHARGE ALL POLICY HOLDERS ON ALL POLICIES ISSUED BY IT.
   37    S  3. This act shall take effect on the first of January next succeed-
   38  ing the date on which it shall have become a law, and shall apply to all
   39  acts and omissions by insurers occurring on or after such date.