senate Bill S1686

Provides that payment of interest payment and attorney fees to claimant when payment of a claim is overdue shall be exclusive remedy

download pdf

Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
view actions

actions

  • 11 / Jan / 2011
    • REFERRED TO INSURANCE
  • 04 / Jan / 2012
    • REFERRED TO INSURANCE

Summary

Provides that payment of interest payment and attorney fees to claimant when payment of a claim is overdue shall be exclusive remedy when insurer fails to make timely payment; such failure of insurer to make timely payment or issue denial within 30 days after proof of claim has been submitted to insurer shall not preclude such insurer from issuing a denial or asserting a defense after the 30 day period has elapsed.

do you support this bill?

Bill Details

See Assembly Version of this Bill:
A2363
Versions:
S1686
Legislative Cycle:
2011-2012
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยง5106, Ins L
Versions Introduced in Previous Legislative Cycles:
2009-2010: S2638, S6448, A4348
2007-2008: A3387, S2638, A3387

Sponsor Memo

BILL NUMBER:S1686

TITLE OF BILL:
An act
to amend the insurance law, in relation to payment of interest penalty
and attorney fees to a claimant when a claim is overdue and the ability
of an insurer to assert a defense or deny a claim if timely payment is
not made within thirty days after proof of claim has been submitted

PURPOSE:
This bill would amend the insurance law law and would allow
insurers additional time to investigate potentially fraudulent
no-fault automobile insurance claims.

SUMMARY OF PROVISIONS:
Section 1 amends subsection (a) of section 5106
of the insurance law to include "payment of the interest and
reasonable attorney fees to a claimant when payment of a claim is
overdue shall be the exclusive remedy when an insurer fails to make
timely payment. The failure of an insurer to make timely payment or
issue a denial within thirty days after proof of claim has been
submitted to an insurer shall not preclude such insurer from issuing
a denial or asserting a defense after the thirty day period has
elapsed."

Section 2 of this bill states that this act shall take effect sixty
days after it shall become a law.

JUSTIFICATION:
This bill will help to reduce no fault insurance fraud
thereby reducing premiums paid by consumers. This legislation
clarifies the exclusive penalty for an overdue payment to be interest
and reasonable attorney fees. Additionally, the legislation permits
the insurer to issue a denial after the thirty days and assert a
defense after the thirty day period. Often times in cases of fraud
the investigation takes longer than thirty days and requires
additional time to determine the appropriate course of action.

LEGISLATIVE HISTORY:
S.6448 of 2010; S.2638 of 2007-08

FISCAL IMPLICATIONS:
Minimal.

EFFECTIVE DATE:
This act shall take effect sixty days after it shall
become a law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1686

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 11, 2011
                               ___________

Introduced  by  Sen.  SEWARD -- 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  payment  of  interest
  penalty  and  attorney  fees to a claimant when a claim is overdue and
  the ability of an insurer to assert a defense or deny a claim if time-
  ly payment is not made within thirty days after  proof  of  claim  has
  been submitted

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsection (a) of section 5106  of  the  insurance  law  is
amended to read as follows:
  (a)  Payments of first party benefits and additional first party bene-
fits shall be made as the loss is incurred. Such benefits are overdue if
not paid within thirty days after the claimant  supplies  proof  of  the
fact  and  amount  of loss sustained. If proof is not supplied as to the
entire claim, the amount which is supported by proof is overdue  if  not
paid  within  thirty  days  after  such  proof  is supplied. All overdue
payments shall bear interest at the rate of two percent per month. If  a
valid  claim or portion was overdue, the claimant shall also be entitled
to recover his  attorney's  reasonable  fee,  for  services  necessarily
performed  in  connection  with  securing  payment of the overdue claim,
subject to limitations promulgated by the superintendent in regulations.
PAYMENT OF THE INTEREST PENALTY AND REASONABLE ATTORNEY FEES TO A CLAIM-
ANT WHEN PAYMENT OF A CLAIM IS OVERDUE SHALL  BE  THE  EXCLUSIVE  REMEDY
WHEN  AN INSURER FAILS TO MAKE TIMELY PAYMENT. THE FAILURE OF AN INSURER
TO MAKE TIMELY PAYMENT OR ISSUE A DENIAL WITHIN THIRTY DAYS AFTER  PROOF
OF CLAIM HAS BEEN SUBMITTED TO AN INSURER SHALL NOT PRECLUDE SUCH INSUR-
ER  FROM  ISSUING  A  DENIAL OR ASSERTING A DEFENSE AFTER THE THIRTY DAY
PERIOD HAS ELAPSED.
  S 2. This act shall take effect on the sixtieth  day  after  it  shall
have become a law.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05836-01-1

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.