senate Bill S2315

Relates to the timing for giving notice of a loss under insurance contracts

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Bill Status


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

  • 15 / Jan / 2013
    • REFERRED TO INSURANCE
  • 08 / Jan / 2014
    • REFERRED TO INSURANCE

Summary

Relates to the timing for giving notice of a loss under insurance contracts.

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Bill Details

See Assembly Version of this Bill:
A453
Versions:
S2315
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยง3407, Ins L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S4714, A9282
2009-2010: S4669, S4669

Sponsor Memo

BILL NUMBER:S2315

TITLE OF BILL: An act to amend the insurance law, in relation to the
timing for giving notice of a loss under insurance contracts

PURPOSE: The purpose of this bill is to mitigate against the
potential for procedural of insurance coverage resulting in
unreasonable loss of insurance coverage for insured's

SUMMARY OF PROVISIONS:

Section 3407(c) of the insurance law is added as a new subdivision
which provides that an insurer shall not decline coverage for a claim
based on the failure of an insured to give timely notice of claim
unless the insurer can demonstrate that it has suffered substantial
prejudice as a result of the delayed notice.

JUSTIFICATION: Insurance companies registered to operate in New York
State have taken advantage of contract provisions which provide that
late notice of loss by an insured will result in the declination of
coverage. This declination of coverage which results from the filing
of an untimely notice of loss is a draconian measure which allows
insurance carriers to avoid providing coverage for their insured's
losses, even when such untimely notice of loss has failed to cause any
prejudice to the insurance carrier.

LEGISLATIVE HISTORY:

S.4669 (2009-2010); S.4714/A.9281 (2011-2012)

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect immediately.

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

                                  2315

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 15, 2013
                               ___________

Introduced  by  Sen.  DeFRANCISCO -- 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 the timing for  giving
  notice of a loss under insurance contracts

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

  Section 1. Section 3407 of the insurance law is amended  by  adding  a
new subsection (c) to read as follows:
  (C)  (1)  ANY  PROVISION  CONTAINED IN AN INSURANCE CONTRACT ISSUED OR
DELIVERED IN THIS STATE OR COVERING A PROPERTY IN  THIS  STATE  THAT  IS
CONTRARY  IN  PURPOSE  WITH,  OR IN CONFLICT WITH THE PROVISIONS OF THIS
SECTION SHALL BE NULL AND VOID IF THE  EFFECTUATION  OF  SUCH  PROVISION
WOULD  RESULT IN THE DEROGATION OF THE BENEFIT TO AN INSURED INTENDED BY
THE ENACTMENT OF THIS SECTION.
  (2) AN INSURER SHALL NOT DENY COVERAGE FOR A CLAIM BASED ON THE  FAIL-
URE OF AN INSURED TO GIVE TIMELY NOTICE OF A CLAIM UNLESS THE AUTHORIZED
INSURER  OR  OTHER INSURER CAN DEMONSTRATE THAT IT HAS SUFFERED SUBSTAN-
TIAL PREJUDICE AS A RESULT OF THE  DELAYED  NOTICE.  EVIDENCE  THAT  THE
INSURER HAD KNOWLEDGE OF THE LOSS THAT IS THE SUBJECT OF THE CLAIM SHALL
CREATE A REBUTTABLE PRESUMPTION THAT THE INSURER HAS NOT BEEN PREJUDICED
BY  DELAYED NOTICE. NOTICE GIVEN TO ANY LICENSED AGENT OF THE INSURER IN
THIS STATE WITH PARTICULARS SUFFICIENT TO IDENTIFY THE INSURED SHALL  BE
DEEMED NOTICE TO THE INSURER.
  (3)  THE  PROVISIONS  OF  THIS SECTION SHALL BE LIBERALLY CONSTRUED IN
ORDER TO EFFECTUATE THE PURPOSE HEREOF WHICH IS TO MITIGATE AGAINST  THE
POTENTIAL  FOR  PROCEDURAL  DENIAL  OF  INSURANCE  COVERAGE RESULTING IN
UNREASONABLE LOSS OF INSURANCE PROTECTION FOR INSUREDS.
  S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be  adjudged  by  any  court  of
competent  jurisdiction  to  be invalid, such judgment shall not affect,
impair or invalidate the remainder thereof, but shall be confined in its

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03104-01-3

S. 2315                             2

operation to the clause, sentence, paragraph,  subdivision,  section  or
part thereof directly involved in the controversy in which such judgment
shall  have been rendered. It is hereby declared to be the intent of the
legislature  that  this act would have been enacted even if such invalid
provisions had not been included herein.
  S 3. This act shall take effect immediately, and shall  apply  to  all
insurance  contracts,  executed, issued, reissued or renewed on or after
such date.

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