S T A T E O F N E W Y O R K
________________________________________________________________________
10275
I N A S S E M B L Y
May 17, 2012
___________
Introduced by M. of A. LAVINE -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to unfair claims prac-
tices
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 2601 of the insurance law is amended by adding a
new subsection (a-1) to read as follows:
(A-1) (1) NO REPRESENTATIVE OF AN INSURER SHALL TAKE ANY WRITTEN OR
RECORDED STATEMENT FROM AN UNREPRESENTED CLAIMANT UNTIL AT LEAST SIXTY
DAYS HAVE PASSED SINCE THE DATE OF THE EVENT GIVING RISE TO A CLAIM,
EXCEPT IN A CLAIM WHICH IS FOR LOSS OR DAMAGE TO PROPERTY ONLY, OR AS IS
PERMITTED BY THE WORKERS' COMPENSATION LAW. IN THE EVENT THAT AN INSURER
VIOLATES THIS PARAGRAPH, THE STATEMENT SHALL BE INADMISSIBLE AT TRIAL
AND SHALL NOT BE USED DURING ANY COURSE OF THE CAUSE OF ACTION FOR ANY
PURPOSE, EXCEPT IF BENEFICIAL TO THE CLAIMANT. IF AN INSURER TAKES A
WRITTEN OR RECORDED STATEMENT AFTER THE PROHIBITED TIME PERIOD HAS
EXPIRED, IT SHALL ADVISE THE CLAIMANT OF HIS OR HER RIGHT TO REFUSE TO
GIVE THE STATEMENT AND THE RIGHT TO SEEK ADVICE FROM COUNSEL REGARDING
THE REQUEST FOR SUCH STATEMENT. A COPY OF THE TRANSCRIPT OF ANY RECORDED
STATEMENT SHALL BE PROVIDED TO THE CLAIMANT WITHIN THIRTY DAYS OF THE
DATE OF THE RECORDING.
FOR THE PURPOSE OF THIS SUBSECTION THE TERM "REPRESENTATIVE" MEANS ANY
REPRESENTATIVE WORKING FOR OR ON BEHALF OF A LIABILITY INSURER, SELF-IN-
SURED ENTITY OR THIRD PARTY CLAIMS ADMINISTRATOR INCLUDING, BUT NOT
LIMITED TO ALL EMPLOYEES, AGENTS, INDEPENDENT CONTRACTORS AND INVESTI-
GATORS IN ANY SITUATION REGARDING AN ACCIDENT WHERE THE LAWS OF THE
STATE APPLY, EXCEPT THAT REPRESENTATIVES HANDLING CLAIMS PURSUANT TO
ARTICLE FIFTY-ONE OR FIFTY-TWO OF THIS CHAPTER ARE EXPRESSLY EXCLUDED
FROM THIS SUBSECTION WITH REGARD TO THEIR OWN CLAIMANTS. HOWEVER, SUCH
REPRESENTATIVES ARE REQUIRED TO ADVISE APPLICANTS THAT THEY HAVE THE
RIGHT TO SPEAK TO AN ATTORNEY BEFORE GIVING A STATEMENT.
(2) A REPRESENTATIVE SHALL NOT SETTLE A CLAIM WITH AN UNREPRESENTED
CLAIMANT UNLESS IT IS FOR THE FULL POLICY LIMITS (INCLUDING ANY EXCESS
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15474-03-2
A. 10275 2
COVERAGE) UNLESS MORE THAN SIXTY DAYS HAVE PASSED SINCE THE DATE OF THE
EVENT GIVING RISE TO THE CLAIM. IF THERE IS SUPPLEMENTAL UNINSURED
MOTORIST COVERAGE AVAILABLE TO THE CLAIMANT, THE SETTLING REPRESENTATIVE
MUST FIRST OBTAIN THE SUPPLEMENTAL UNINSURED MOTORIST INSURER'S WRITTEN
CONSENT TO SETTLE ON BEHALF OF THE CLAIMANT. ANY SETTLEMENTS MADE DURING
THE PROHIBITED TIME PERIOD THAT DO NOT MEET THE AFOREMENTIONED CRITERIA
ARE VOIDABLE BY THE CLAIMANT AND UNENFORCEABLE BY THE INSURER. AT THE
OPTION OF THE CLAIMANT, THE SETTLEMENT SHALL BE VOIDABLE TO THE EXTENT
THAT IT PREJUDICES ANY RIGHTS OF THE UNREPRESENTED CLAIMANT AND ALL
SUPPLEMENTAL UNINSURED MOTORIST INSURERS COVERING THE CLAIMANT FOR THE
SUBJECT EVENT GIVING RISE TO THE CLAIM.
(3) DURING ALL COMMUNICATIONS WITH UNREPRESENTED CLAIMANTS, BEFORE
ASKING ANY CLAIMANT ANY QUESTIONS AT ALL, THE REPRESENTATIVE SHALL READ
THE CLAIMANT A STATEMENT ADVISING HIM OR HER OF THE RIGHT TO REFUSE TO
SPEAK WITH THE INSURER AND ADVISING HIM OR HER OF THE RIGHT TO CONSULT
AN ATTORNEY. THE FOLLOWING STATEMENT SHALL BE READ EACH AND EVERY TIME
THE CLAIMANT IS CONTACTED. "YOU HAVE THE RIGHT TO CONSULT WITH AN ATTOR-
NEY BEFORE SPEAKING TO ME OR PROVIDING ME WITH ANY INFORMATION, DOCU-
MENTS, PHOTOGRAPHS, WRITTEN STATEMENTS, RECORDED STATEMENTS OR OTHER
EVIDENCE. THE PAYMENT OF YOUR MEDICAL BILLS OR THE AVAILABILITY OF
LIABILITY COVERAGE IS NOT CONTINGENT UPON SPEAKING WITH ME."
(4) IN THE EVENT THAT ANY SETTLEMENT IS MADE WITH AN UNREPRESENTED
CLAIMANT AFTER THE PROHIBITED TIME PERIOD HAS PASSED, THE CLAIMANT MAY
RESCIND THE SETTLEMENT AGREEMENT OR RELEASE BY NOTIFYING THE INSURER
WITHIN THIRTY DAYS OF THE DATE OF THE RELEASE OR SETTLEMENT AGREEMENT.
IN ORDER TO RESCIND THE AGREEMENT OR RELEASE, THE CLAIMANT MUST SEND A
LETTER VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED TO THE REPRESEN-
TATIVE.
(5) ANY OFFER TO SETTLE A CLAIM WITH, OR A RELEASE GIVEN TO AN UNREP-
RESENTED CLAIMANT MUST CONTAIN THE FOLLOWING LANGUAGE IN BOLD AND LARGE
TYPE SET ADVISING CLAIMANT OF THE RIGHT TO RESCIND AND THE RIGHT TO
CONSULT WITH AN ATTORNEY BEFORE SIGNING THE RELEASE. IF IT DOES NOT, IT
IS VOID AND UNENFORCEABLE. "YOU HAVE THE RIGHT TO REFUSE TO SETTLE YOUR
CLAIM AND DESPITE SUCH REFUSAL TO SETTLE, YOUR MEDICAL BILLS WILL STILL
BE PAID AND LIABILITY COVERAGE WILL STILL BE AVAILABLE. YOU HAVE THE
RIGHT TO CONSULT WITH AN ATTORNEY BEFORE NEGOTIATING WITH US AND THE
RIGHT TO DO SO BEFORE GIVING ANY WRITTEN OR RECORDED STATEMENTS, PHOTO-
GRAPHS, DOCUMENTS OR ANY OTHER EVIDENCE TO US." ALL RELEASES SHALL
CONTAIN THE FOLLOWING IN BOLD TYPE, WITH A SEPARATE SIGNATURE LINE FOR
THE CLAIMANT: "THE SETTLEMENT OF THIS CLAIM FOREVER BARS THE CLAIMANT
FROM ANY FUTURE RECOVERIES RELATED TO THIS INCIDENT."
(6) IF AN UNREPRESENTED CLAIMANT DOES NOT READ OR SPEAK ENGLISH, THE
REPRESENTATIVE SHALL NOT ENGAGE IN ANY COMMUNICATIONS WITH THE CLAIMANT
UNLESS IT ENGAGES A CERTIFIED INTERPRETER TO COMMUNICATE WITH THE CLAIM-
ANT. THE REPRESENTATIVE SHALL ALSO ADVISE THE CLAIMANT OF HIS OR HER
RIGHTS AS OUTLINED IN THIS SUBSECTION, AND EXPLAIN THE CONDITION OF ANY
SETTLEMENTS TO THE CLAIMANT. THE INTERPRETER SHALL SIGN AN AFFIDAVIT,
WHICH IS NOTARIZED, REGARDING THE ACCURACY OF THE TRANSLATION, AND THE
ORIGINAL THEREOF SHALL BE KEPT ON FILE FOR AT LEAST SEVEN YEARS, ALONG
WITH THE LAST KNOWN CONTACT INFORMATION FOR THE INTERPRETER.
S 2. This act shall take effect immediately and shall apply to claims
that are settled on or after such date.