senate Bill S6526A

Relates to enacting the "insurance modernization act of 2014"

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Sponsor

Bill Status


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

  • 03 / Feb / 2014
    • REFERRED TO INSURANCE
  • 10 / Mar / 2014
    • 1ST REPORT CAL.241
  • 11 / Mar / 2014
    • 2ND REPORT CAL.
  • 12 / Mar / 2014
    • ADVANCED TO THIRD READING
  • 29 / Apr / 2014
    • AMENDED ON THIRD READING (T) 6526A
  • 19 / May / 2014
    • PASSED SENATE
  • 19 / May / 2014
    • DELIVERED TO ASSEMBLY
  • 19 / May / 2014
    • REFERRED TO INSURANCE

Summary

Enacts the "insurance modernization act of 2014" which relates to permitting all forms of signatures for continuing insurance education course providers; relates to expanding immunity protection for companies reporting certain fire losses; relates to allowing advance premium cooperative investment in certificates of deposit.

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Bill Details

Versions:
S6526
S6526A
Legislative Cycle:
2013-2014
Current Committee:
Assembly Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยงยง2132, 3432 & 6623, Ins L

Sponsor Memo

BILL NUMBER:S6526A

TITLE OF BILL: An act to amend the insurance law, in relation to
enacting the "insurance modernization act of 2014"

PURPOSE: There are three areas of the insurance law where the current
law does not accurately reflect the realities of insurance operations.
First, with the advent of electronic signatures and the ubiquitous
nature of faxed or scanned documents with copies of signatures, the
current Department of Financial Services' (DFS) requirement that
applications by continuing insurance education providers must have
original signatures is anachronistic. This bill would permit both
original signatures and copies of signatures.

Second, insurance companies providing information regarding certain
fire claim losses are immunized from liability for providing such
information to the New York City fire agency but not any other local
fire agency in the state. This measure corrects that by amending the
law to include any local fire agency within the law's definition of a
local fire agency for purposes of such reporting.

Third, current law through an oversight does not expressly include
advance premium cooperatives as a type of cooperative allowed to
invest in certificates of deposit in a certain manner that is
presently allowed for assessment cooperatives. This bill would correct
this oversight by stating that all co-operative property/casualty
insurance companies may invest in certificates of deposit under this
applicable section of law.

SUMMARY OF PROVISIONS:

Section 1 and 2 of the bill provide for the title and legislative
intent.

Section 3. Amend Insurance Law section 2132 (i) (3) by stipulating
that a continuing education course provider under the insurance law
may satisfy signature requirements through compliance with New York
General Construction Law section 46, Signature.

Section 4. Insurance Law section 3432 (b) (6) is amended by including
a local fire investigation agency of any municipal corporation in the
state within the clause providing immunity for a property/casualty
insurance company's report of a fire claim loss.

Section 5. Amends Insurance Law section 6623 (c) to delete the words
"an assessment corporation" and replace them with the words "a
co-operative property/casualty insurance company".

Section 6. Effective date is immediately upon enactment.

JUSTIFICATION: DFS currently requires continuing education course
providers to submit all documents with original, or "wet", signatures.
Modern technology with its extensive use of faxed documents, scanned
documents and even electronic signatures has overtaken the
anachronistic practice of obtaining original signatures in all cases.
In fact, DFS's predecessor agency, the Department of Insurance, opined
in a 2007 office of general counsel opinion (Opinion No. 07-02-11)


that an insurance producer may use a stamped signature on an
application for group insurance. Furthermore, New York has the
Electronic Signatures and Records Act (New York Technology Law
sections 101-109), which authorizes the use and acceptance of
electronic signatures in commercial transactions throughout New York
state. This bill would modernize DFS's practices regarding signatures
submitted by continuing education providers by allowing a copy of a
signature or an electronic signature, as well as an original
signature, on documents submitted by such providers.

Insurance Law sections 3415 and 3432 created a reporting system for
reporting fire loss claims in excess of $10,000 in order to provide
more information for arson investigations and insurance fraud
investigators. An insurer submitting the required report to a "local
fire investigation agency" (defined in law as the fire investigation
agency for New York City) is immune from liability for the information
they provided so long as they did not act fraudulently or in bad
faith. Unfortunately, this immunity does not extend to such reports
made by insurers to fire investigation agencies outside of New York
City. Fundamental fairness dictates that the public policy reasons for
this immunity similarly apply to reports made to non-New York City
fire investigation agencies. Accordingly, this legislation extends the
current immunity to reports made to any local fire investigation
agency in New York State.

One of the chapter laws of 2000 amended Insurance Law section 6623 to
allow assessment corporations, one of the two types of cooperative
insurance companies in New York with the other one being advance
premium corporations, to invest in certificates of deposit (CDs) with
any one institution in an amount not to exceed the amount guaranteed
by the Federal Deposit Insurance Corporation (FDIC). The impetus for
this change was the prohibition, prior to this 2000 law, on
cooperative insurers investing more than 10% of their admitted assets
in any one financial institution. According to the sponsor memorandum
for the 2000 law, the change in the statute was necessitated by the
fact that assessment corporations are often located in small, rural
areas with few investment opportunities. Since this fact also exists
for many advance premium corporations, they should similarly be
included within this authorization to invest in certificates of
deposit. This measure would resolve that inequity by including advance
premium corporations under the section of law authorizing investments
in CDs.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.

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

                                 6526--A
    Cal. No. 241

                            I N  S E N A T E

                            February 3, 2014
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the  Committee  on  Insurance  --  reported
  favorably  from  said  committee,  ordered to first and second report,
  ordered to a third reading, amended and ordered  reprinted,  retaining
  its place in the order of third reading

AN  ACT  to amend the insurance law, in relation to enacting the "insur-
  ance modernization act of 2014"

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

  Section  1.  This act shall be known, and may be cited as, the "insur-
ance modernization act of 2014."
  S 2. The legislature finds and declares  that  there  is  a  need  for
modernizing  three  discrete provisions of the insurance law in order to
streamline the conduct of the business of insurance  in  New  York.  The
"insurance  modernization  act of 2014" would permit all forms of signa-
tures for continuing insurance education course providers, expand  immu-
nity  protection  for  companies reporting certain fire losses and allow
advance premium cooperative investment in certificates of deposit.
  S 3. Paragraph 3 of subsection (i) of section 2132  of  the  insurance
law,  as added by chapter 656 of the laws of 1992, is amended to read as
follows:
  (3) The completed applications shall be returned in a  timely  manner,
as specified by the superintendent, PROVIDED THAT ANY SIGNATURE REQUIRE-
MENTS  SHALL  BE  DEEMED SATISFIED IF THE SIGNATURES COMPLY WITH SECTION
FORTY-SIX OF THE GENERAL CONSTRUCTION LAW, with a non-refundable  filing
fee  of  two hundred dollars per organization, fifty dollars per course,
program and seminar, and fifty dollars per instructor.
  S 4. Paragraph 6 of subsection (b) of section 3432  of  the  insurance
law,  as added by chapter 778 of the laws of 1986, is amended to read as
follows:
  (6) information required by the insurer or provided by the insurer  in
the  absence  of fraud or bad faith to a local fire investigation agency
[pursuant to section three thousand four hundred fifteen of  this  arti-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13788-02-4

S. 6526--A                          2

cle]  OF  A  "MUNICIPAL  CORPORATION"  AS  DEFINED IN SECTION TWO OF THE
GENERAL MUNICIPAL LAW.
  S  5. Subsection (c) of section 6623 of the insurance law, as added by
chapter 431 of the laws of 2000, is amended to read as follows:
  (c) Notwithstanding the limitation of investments in  certificates  of
deposit set forth in subsection (a) of section one thousand four hundred
nine  of  this  chapter,  [an  assessment  corporation]  A  CO-OPERATIVE
PROPERTY/CASUALTY INSURANCE COMPANY may invest in certificates of depos-
it of any one institution in an amount not to exceed the amount  guaran-
teed by the Federal Deposit Insurance Corporation.
  S 6. This act shall take effect immediately.

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