senate Bill S3045

Creates a homeowners' bill of rights to inform consumers with regards to insuring against catastrophic loss

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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

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

Summary

Creates a homeowners' bill of rights; directs the superintendent of financial services to issue a consumers guide on insuring against catastrophic loss.

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Bill Details

Versions:
S3045
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Add §§3444-a & 338, amd §2601, Ins L

Sponsor Memo

BILL NUMBER:S3045

TITLE OF BILL: An act to amend the insurance law, in relation to
creating a homeowners' bill of rights and a consumer guide on insuring
against catastrophic loss caused by natural disasters

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to
establish a Homeowners' Bill of Rights that would educate consumers
about the details of their insurance policies and their rights under
the law.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill would amend the Insurance law by adding a new
section 3444-a, the "Homeowners Bill of Rights." This section would
obligate certain insurers to provide to insured or potentially insured
parties written disclosures describing: coverage or limitations on
coverage for losses caused by certain catastrophic occurrences,
information related to claims investigation and processing, the rights
of the insured under the law, that the provisions of the policy could
be modified or changed pursuant to state or federal law following a
disaster or emergency, the insurer's contact information, information
on obtaining the Consumer's Guide on Insuring Against Catastrophic
Losses, and any other information deemed necessary by the
Superintendent. In addition, when the insured's policy does not
include coverage for certain catastrophic occurrences, the insurer
would be required to provide information on additional coverage
options.

Section 2 of the bill would amend Section 2601 of the insurance law to
include a new paragraph (7). This paragraph would state that the
knowing misrepresentation of or failure to provide pertinent facts of
policy provisions to claimants, and the failure to comply with those
policy provisions, shall constitute an unfair claim settlement
practice.

Section 3 of the bill would add a new section 338 to the Insurance
law. This section would instruct the Superintendent to create a
Consumer's Guide on Insuring Against Catastrophic Losses, and outlines
the information which the Superintendent must include in the Guide.
The Guide would include the ways in which certain occurrences can
cause catastrophic losses, the types of insurance that provide
coverage against catastrophic losses, information on which type of
weather, natural disasters, and other occurrences and catastrophic
losses are typically excluded from insurance policies and how a
consumer may obtain coverage for those exclusions, steps a consumer
can take to prepare for a natural disaster or other catastrophic loss,
steps a consumer can take to facilitate the timely processing of an
insurance claim and an explanation of policyholder's rights in law and
regulation, and a department toll-free consumer hotline and website
address through which consumers may initiate complaints and request
general information about insurance. The department would be able to
satisfy these requirements through separate or supplemental
publications and updates, and the Superintendent would be required to
post the "Consumer Guide on insuring Against Catastrophic Losses" on
the Department's website.


JUSTIFICATION: Following Superstorm Sandy and Tropical Storms Irene
and Lee, many policyholders were surprised that their insurance
company either rejected their claim or offered them a settlement
amount that was significantly lower than the cost of the damages. Many
policyholders thought that their existing insurance policy provided
sufficient coverage for water damage and other catastrophic losses
caused by these storms. Often, there were long delays in the
investigation and settlement of claims, leaving home and business
owners in limbo for weeks, sometimes months. It became clear to the
victims of these storms that insurance policies can be complex, the
claims process can be burdensome for the policyholder, and insurance
companies can be unresponsive at a time when assistance is needed the
most. Policyholders should be made aware of the different insurance
coverage options available, the benefits of each option, and their
rights under the law.

This bill would address these issues by requiring insurers to provide
insureds and prospective insureds with a notice containing a
Homeowners' Bill of Rights. The notice would inform consumers of the
coverage provided and any exclusions, how they can obtain additional
coverage, their rights under the law, and other information that will
educate consumers about their insurance coverage. This will ensure
that policyholders have coverage that meets their needs.

PRIOR LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be
determined.

EFFECTIVE DATE: Immediately.

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

                                  3045

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 29, 2013
                               ___________

Introduced  by  Sen.  LANZA  -- 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 creating a homeowners'
  bill of rights and a consumer guide on insuring  against  catastrophic
  loss caused by natural disasters

  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 3444-a
to read as follows:
  S 3444-A. HOMEOWNERS' BILL OF RIGHTS.  (A)  ANY  INSURER  THAT  WRITES
PERSONAL  LINES  INSURANCE  OR  COMMERCIAL LINES INSURANCE POLICIES THAT
COVER LOSS OF OR DAMAGE TO REAL PROPERTY, PERSONAL  PROPERTY,  OR  OTHER
LIABILITIES  FOR  LOSS OF OR DAMAGE TO PROPERTY SHALL, UPON ISSUANCE AND
RENEWAL OF ANY SUCH POLICY OR CONTRACT, PROVIDE TO AN INSURED OR  POTEN-
TIAL  INSURED  WRITTEN  DETAILED  DISCLOSURE  IN  A NOTICE PRESCRIBED OR
APPROVED BY THE SUPERINTENDENT DESCRIBING CLEARLY AND IN PLAIN  LANGUAGE
THE FOLLOWING:
  (1)  ANY  AND  ALL  COVERAGE  FOR  LOSS CAUSED BY CERTAIN OCCURRENCES,
INCLUDING BUT NOT LIMITED TO FIRE, WIND, WINDSTORM, MUDSLIDE, HURRICANE,
SNOW, ICE, WATER SURGE, OR FLOOD, COVERAGES PROVIDED UNDER  THE  POLICY,
ANY LIMITATIONS ON OR EXCLUSIONS FROM COVERAGE, CIRCUMSTANCES THAT WOULD
INVALIDATE  COVERAGE  UNDER  THE POLICY, ANY APPLICABLE DEDUCTIBLES, AND
WHEN SUCH DEDUCTIBLES SHALL BE TRIGGERED;
  (2) ALL INFORMATION RELATED TO CLAIMS  INVESTIGATION  AND  PROCESSING,
INCLUDING BUT NOT LIMITED TO THE PROCESS BY WHICH THE INSURED MAY FILE A
CLAIM,  ALL  APPLICABLE  TIME FRAMES REQUIRED BY LAW AND REGULATION, ALL
NECESSARY PROOF OF LOSS INFORMATION AND OTHER  INFORMATION  THE  INSURER
MAY  REQUIRE FROM THE INSURED, THE PROCESS BY WHICH THE INSURED MAY FILE
A COMPLAINT WITH THE DEPARTMENT, AND ANY OTHER INFORMATION DEEMED NECES-
SARY BY THE SUPERINTENDENT;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07472-02-3

S. 3045                             2

  (3) ANY AND ALL RIGHTS A CLAIMANT HAS UNDER THE LAWS AND POLICY WHEN A
CLAIM IS DENIED OR WHEN THE CLAIMANT REJECTS A SETTLEMENT OFFER FROM THE
INSURER, INCLUDING THEIR RIGHT TO FILE A COMPLAINT WITH THE DEPARTMENT;
  (4)  THAT  THE  PROVISIONS  OF  THIS POLICY MAY BE MODIFIED OR CHANGED
PURSUANT TO STATE OR FEDERAL LAW WHEN A  LOCAL  STATE  OF  EMERGENCY  IS
DECLARED  PURSUANT TO SECTION TWENTY-FOUR OF THE EXECUTIVE LAW, WHEN THE
GOVERNOR DECLARES A DISASTER EMERGENCY PURSUANT TO SECTION  TWENTY-EIGHT
OF  THE EXECUTIVE LAW, OR WHEN THE PRESIDENT OF THE UNITED STATES ISSUES
A MAJOR DISASTER OR EMERGENCY DECLARATION  PURSUANT  TO  THE  ROBERT  T.
STAFFORD  DISASTER RELIEF AND EMERGENCY ASSISTANCE ACT (P.L. 93-288) AND
HOW THE INSURED MAY OBTAIN INFORMATION ABOUT ANY SUCH  MODIFICATIONS  OR
CHANGES;
  (5)  INFORMATION ON HOW THE INSURED MAY CONTACT THE INSURER, INCLUDING
THE INSURER'S BUSINESS HOURS, MAILING ADDRESS, PHONE NUMBER, FAX NUMBER,
WEBSITE ADDRESS AND EMAIL; AND
  (6) INFORMATION ON HOW THE INSURED CAN OBTAIN THE CONSUMERS  GUIDE  ON
INSURING  AGAINST CATASTROPHIC LOSSES CREATED BY THE DEPARTMENT PURSUANT
TO SECTION THREE HUNDRED THIRTY-EIGHT OF  THIS  CHAPTER  AND  ANY  OTHER
GUIDES, PAMPHLETS, OR OTHER INFORMATION THE DEPARTMENT HAS MADE PUBLICLY
AVAILABLE THAT WOULD BE BENEFICIAL TO THE INSURED.
  (B)  IN  THE  EVENT  THAT  A  POLICY SUBJECT TO SUBSECTION (A) OF THIS
SECTION DOES NOT INCLUDE COVERAGE FOR DAMAGE  AS  A  RESULT  OF  WEATHER
CONDITIONS,  NATURAL  DISASTERS, OR OTHER OCCURRENCES, INCLUDING BUT NOT
LIMITED TO FIRE, WIND, WINDSTORM, MUDSLIDE, HURRICANE, SNOW, ICE,  WATER
SURGE,  OR  FLOOD,  THE  INSURER  OR  PRODUCER  SHALL, UPON ISSUANCE AND
RENEWAL OF ANY SUCH POLICY OR CONTRACT, PROVIDE TO AN INSURED OR  POTEN-
TIAL  INSURED  INFORMATION ON ANY ADDITIONAL COVERAGE OPTIONS, INCLUDING
ADDITIONAL POLICIES AND RIDERS, THE NEW YORK PROPERTY  INSURANCE  UNDER-
WRITING ASSOCIATION, THE COASTAL MARKET ASSISTANCE PROGRAM, THE NATIONAL
FLOOD  INSURANCE  PROGRAM,  AND ANY OTHER OPTIONS AUTHORIZED BY STATE OR
FEDERAL LAW.
  S 2. Paragraph 6 of subsection (a) of section 2601  of  the  insurance
law, as amended by chapter 388 of the laws of 2008, is amended and a new
paragraph 7 is added to read as follows:
  (6)  failing  to promptly disclose coverage pursuant to subsection (d)
or subparagraph (A) of paragraph two of subsection (f) of section  three
thousand four hundred twenty of this chapter[.]; OR
  (7) KNOWINGLY MISREPRESENTING OR FAILING TO PROVIDE PERTINENT FACTS OF
POLICY  PROVISIONS  TO  CLAIMANTS  AS REQUIRED BY SECTION THREE THOUSAND
FOUR HUNDRED FORTY-FOUR-A OF THIS CHAPTER AND NOT  COMPLYING  WITH  SUCH
POLICY  PROVISIONS, INCLUDING ESTABLISHED TIME FRAMES FOR INVESTIGATION,
CLAIMS PROCESSING AND SETTLEMENT, AND PAYMENT OF CLAIMS.
  S 3. The insurance law is amended by adding a new section 338 to  read
as follows:
  S 338. CONSUMER GUIDE ON INSURING AGAINST CATASTROPHIC LOSSES. (A) SIX
MONTHS  AFTER  THE  EFFECTIVE  DATE  OF THIS SECTION, THE SUPERINTENDENT
SHALL ISSUE AND UPDATE, AS  NECESSARY,  A  CONSUMER  GUIDE  ON  INSURING
AGAINST CATASTROPHIC LOSSES THAT SHALL CONTAIN COMPREHENSIVE INFORMATION
WRITTEN  IN PLAIN LANGUAGE IN A CLEAR AND UNDERSTANDABLE FORMAT, INCLUD-
ING THE FOLLOWING:
  (1) THE WAYS IN WHICH DIFFERENT TYPES OF WEATHER  CONDITIONS,  NATURAL
DISASTERS, OR OTHER OCCURRENCES CAN CAUSE CATASTROPHIC LOSSES, INCLUDING
BUT  NOT  LIMITED TO DAMAGE FROM FIRE, WIND, WINDSTORM, MUDSLIDE, HURRI-
CANE, SNOW, ICE, EXTREME COLD, WATER SURGE, AND FLOOD;
  (2) THE TYPES OF INSURANCE AVAILABLE  THAT  PROVIDE  COVERAGE  AGAINST
CATASTROPHIC  LOSSES  FOR  BOTH  HOMEOWNERS AND BUSINESSES, A LISTING OF

S. 3045                             3

COMPANIES THAT PROVIDE SUCH COVERAGE, AND RECOMMENDATIONS AS TO HOW BEST
TO SHOP FOR AND COMPARE PRICES, SERVICE AND QUALITY OF INSURANCE  COVER-
AGE;
  (3)  A  LIST  OF  THE  EXCLUSIONS TYPICALLY FOUND IN SUCH COVERAGE AND
INFORMATION ON HOW A CONSUMER MAY OBTAIN COVERAGE FOR  SUCH  EXCLUSIONS,
INCLUDING  A  LISTING  OF  COMPANIES  THAT  PROVIDE SUCH COVERAGE AND AN
EXPLANATION OF, INFORMATION ON, AND THE TYPES OF COVERAGE AVAILABLE FROM
THE NEW YORK PROPERTY INSURANCE UNDERWRITERS  ASSOCIATION,  THE  COASTAL
MARKET ASSISTANCE PROGRAM, AND THE NATIONAL FLOOD INSURANCE PROGRAM, AND
OTHER OPTIONS AUTHORIZED BY STATE OR FEDERAL LAW;
  (4)  STEPS  A  CONSUMER  CAN TAKE TO PREPARE FOR A NATURAL DISASTER OR
OTHER CATASTROPHIC LOSS;
  (5) STEPS A CONSUMER CAN TAKE FOLLOWING A CATASTROPHIC LOSS  IN  ORDER
TO  FACILITATE  THE  TIMELY PROCESSING OF THE CONSUMER'S INSURANCE CLAIM
AND AN EXPLANATION OF POLICYHOLDERS' RIGHTS AS PROVIDED IN LAW AND REGU-
LATION; AND
  (6) A DEPARTMENT TOLL  FREE  CONSUMER  HOT-LINE  AND  WEBSITE  ADDRESS
THROUGH  WHICH  CONSUMERS  MAY  INITIATE COMPLAINTS, AND REQUEST GENERAL
INFORMATION ABOUT INSURANCE.
  (B) THE REQUIREMENTS SET FORTH IN SUBSECTION (A) OF THIS  SECTION  MAY
BE SATISFIED BY SEPARATE OR SUPPLEMENTAL PUBLICATIONS AND UPDATES.
  (C)  THE  SUPERINTENDENT  SHALL  POST  THE  CONSUMER GUIDE ON INSURING
AGAINST CATASTROPHIC LOSSES ON THE DEPARTMENT'S WEBSITE.
  S 4. This act shall take effect immediately.

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