senate Bill S2892

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

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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

  • 24 / Jan / 2013
    • REFERRED TO INSURANCE
  • 08 / Jan / 2014
    • 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.

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Bill Details

See Assembly Version of this Bill:
A932
Versions:
S2892
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยง5106, Ins L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S1686, A2363
2009-2010: S2638, S6448, A4348
2007-2008: A3387, S2638, A3387

Sponsor Memo

BILL NUMBER:S2892

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 by adding a new section
5106 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 reason-
able 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.1686 of 2011-12; S.6448 of 2009-10; 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
________________________________________________________________________

                                  2892

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 24, 2013
                               ___________

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.
                                                           LBD04288-01-3

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