Bill Text: NY A06709 | 2009-2010 | General Assembly | Introduced

---

Bill Title: 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 29-0)

Status: (Introduced - Dead) 2010-01-06 - referred to insurance [A06709 Detail]

Download: New_York-2009-A06709-Introduced.html

---

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         6709
                              2009-2010 Regular Sessions
                                 I N  A S S E M B L Y
                                    March 11, 2009
                                      ___________
       Introduced  by  M.  of  A. BRENNAN, COOK, SCHROEDER, LANCMAN, ZEBROWSKI,
         ROSENTHAL, JAFFEE, FIELDS, KELLNER, GUNTHER, JOHN, ROBINSON, KAVANAGH,
         HOOPER, REILLY -- Multi-Sponsored by -- M. of A. BOYLAND,  BROOK-KRAS-
         NY,  CAHILL,  CUSICK,  GOTTFRIED, HYER-SPENCER, KOON, MAISEL, MILLMAN,
         PHEFFER, SWEENEY, TITONE, TOWNS, WEISENBERG -- read once and  referred
         to the Committee on Insurance
       AN  ACT  to amend the insurance law, in relation to unfair claim settle-
         ment practices
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. The insurance law is amended by adding a new section 2601-a
    2  to read as follows:
    3    S  2601-A.  UNFAIR  CLAIM  SETTLEMENT  PRACTICES; CIVIL REMEDY. (A) AN
    4  INSURER DOING BUSINESS IN THIS STATE SHALL BE LIABLE TO THE HOLDER OF  A
    5  POLICY ISSUED OR RENEWED PURSUANT TO ARTICLE THIRTY-FOUR OF THIS CHAPTER
    6  FOR  DAMAGES AS PROVIDED IN THIS SECTION UPON SUCH POLICY HOLDER PROVING
    7  BY A PREPONDERANCE OF THE EVIDENCE THAT SUCH INSURER'S REFUSAL TO PAY OR
    8  UNREASONABLE DELAY IN PAYMENT TO THE POLICY HOLDER OF AMOUNTS CLAIMED TO
    9  BE DUE UNDER A POLICY WAS NOT SUBSTANTIALLY JUSTIFIED.   AN  INSURER  IS
   10  NOT SUBSTANTIALLY JUSTIFIED IN REFUSING TO PAY OR IN UNREASONABLY DELAY-
   11  ING PAYMENT WHEN THE INSURER:
   12    (1) INTENTIONALLY, RECKLESSLY OR BY GROSS NEGLIGENCE FAILED TO PROVIDE
   13  THE POLICY HOLDER WITH ACCURATE INFORMATION CONCERNING POLICY PROVISIONS
   14  RELATING TO THE COVERAGE AT ISSUE;
   15    (2)  FAILED  TO  EFFECTUATE IN GOOD FAITH A PROMPT, FAIR AND EQUITABLE
   16  SETTLEMENT OF A CLAIM SUBMITTED BY SUCH POLICY HOLDER IN WHICH LIABILITY
   17  OF SUCH INSURER TO SUCH POLICY HOLDER WAS REASONABLY CLEAR;
   18    (3) FAILED TO PROVIDE A WRITTEN DENIAL OF A POLICY HOLDER'S CLAIM WITH
   19  A FULL AND COMPLETE EXPLANATION OF SUCH DENIAL, INCLUDING REFERENCES  TO
   20  SPECIFIC POLICY PROVISIONS WHEREVER POSSIBLE;
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD02831-02-9
       A. 6709                             2
    1    (4)  FAILED TO MAKE A FINAL DETERMINATION AND NOTIFY THE POLICY HOLDER
    2  IN WRITING OF ITS POSITION ON BOTH  LIABILITY  FOR,  AND  THE  INSURER'S
    3  VALUATION OF, A CLAIM WITHIN SIX MONTHS OF THE DATE ON WHICH IT RECEIVED
    4  ACTUAL OR CONSTRUCTIVE NOTICE OF THE LOSS UPON WHICH THE CLAIM IS BASED;
    5  OR
    6    (5)  FAILED TO ACT IN GOOD FAITH BY COMPELLING POLICY HOLDER TO INSTI-
    7  TUTE SUIT TO RECOVER AMOUNTS DUE UNDER ITS POLICY BY  OFFERING  SUBSTAN-
    8  TIALLY  LESS  THAN  THE  AMOUNTS ULTIMATELY RECOVERED IN SUIT BROUGHT BY
    9  SUCH POLICY HOLDER.
   10    (B) ANY POLICY HOLDER WHO ESTABLISHES LIABILITY PURSUANT TO SUBSECTION
   11  (A) OF THIS SECTION SHALL BE ENTITLED TO RECOVER, IN ADDITION TO AMOUNTS
   12  DUE UNDER THE POLICY, INTEREST, COSTS, AND  DISBURSEMENTS,  COMPENSATORY
   13  DAMAGES  AND  REASONABLE  ATTORNEYS'  FEES INCURRED BY THE POLICY HOLDER
   14  FROM THE DATE OF THE LOSS, IN RECOVERING  MONIES  DUE  PURSUANT  TO  THE
   15  TERMS OF THE POLICY.
   16    (C)  ANY POLICY HOLDER MAY RECOVER DAMAGES FROM AN INSURER DOING BUSI-
   17  NESS IN THIS STATE PURSUANT TO THIS SECTION EITHER AS PART OF AN  ACTION
   18  TO  RECOVER  UNDER  THE  TERMS  OF  AN INSURANCE POLICY OR IN A SEPARATE
   19  ACTION.
   20    (D) IN ANY TRIAL OF A CAUSE OF  ACTION  ASSERTED  AGAINST  AN  INSURER
   21  PURSUANT TO THIS SECTION, EVIDENCE OF SETTLEMENT DISCUSSIONS WRITTEN AND
   22  VERBAL  OFFERS  TO  COMPROMISE AND OTHER EVIDENCE RELATING TO THE CLAIMS
   23  PROCESS SHALL BE ADMISSIBLE. IF CAUSES OF ACTION RELATING  TO  LIABILITY
   24  OF  THE  INSURER  UNDER THE POLICY AND UNDER THIS SECTION ARE ALLEGED IN
   25  THE SAME ACTION, THE COURT MAY BIFURCATE THE TRIAL OF ISSUES  SO  AS  TO
   26  AVOID PREJUDICE TO THE INSURER ON THE ISSUE OF LIABILITY UNDER THE POLI-
   27  CY  AND  FACILITATE  ADMISSIBILITY  OF  EVIDENCE ON THE CAUSES OF ACTION
   28  ASSERTED PURSUANT TO THIS SECTION.
   29    (E) ALL AMOUNTS RECOVERED  FROM  AN  INSURER  AS  ACTUAL  DAMAGES  AND
   30  REASONABLE  ATTORNEYS'  FEES  IN  ANY  ACTION AUTHORIZED IN THIS SECTION
   31  SHALL BE EXCLUDED BY THE INSURER IN ITS DETERMINATIONS OF  THE  PREMIUMS
   32  IT WILL CHARGE ALL POLICY HOLDERS ON ALL POLICIES ISSUED BY IT.
   33    S  2. This act shall take effect on the first of January next succeed-
   34  ing the date on which it shall have become a law, and shall apply to all
   35  acts and omissions by insurers occurring  on  or  after  such  effective
   36  date.