S T A T E O F N E W Y O R K
2011-2012 Regular Sessions
I N S E N A T E
April 8, 2011
Introduced by Sen. GOLDEN -- 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 permitting an insurer
to rescind or retroactively cancel a policy in certain circumstances
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 3455
to read as follows:
S 3455. CANCELLATION OF POLICY. (A) NOTWITHSTANDING ANY RULE, LAW OR
REGULATION TO THE CONTRARY, AN INSURER MAY RESCIND OR RETROACTIVELY
CANCEL TO THE INCEPTION OF THE POLICY, A NEWLY ISSUED COVERED POLICY
SUBJECT TO SUBSECTION (A) OF SECTION THREE THOUSAND FOUR HUNDRED TWEN-
TY-FIVE OF THIS CHAPTER OR A NEWLY ISSUED COMMERCIAL AUTOMOBILE INSUR-
ANCE POLICY SUBJECT TO SECTION THREE THOUSAND FOUR HUNDRED TWENTY-SIX OF
THIS CHAPTER, IF THE INITIAL PREMIUM PAYMENT IS NOT HONORED BY A FINAN-
CIAL INSTITUTION DUE TO NON-SUFFICIENT FUNDS, THE NONEXISTENCE OF A BANK
ACCOUNT OR THE UNAUTHORIZED USE OF THE ACCOUNT.
(B) A PERSON WHO IS INJURED DURING THIS PERIOD MAY HAVE RECOURSE TO
HIS OR HER OWN POLICY, OR THE MOTOR VEHICLE ACCIDENT INDEMNIFICATION
CORPORATION, PROVIDED SUCH PERSON DID NOT PARTICIPATE IN ANY FRAUDULENT
ACTIVITY, INCLUDING, BUT NOT LIMITED TO, A STAGED OR CAUSED ACCIDENT.
THE MOTOR VEHICLE ACCIDENT INDEMNIFICATION CORPORATION MAY NOT SUBROGATE
ITS CLAIM AGAINST THE RESCINDING INSURER.
S 2. This act shall take effect immediately.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.