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

                                   960

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced by M. of A. DESTITO, MAGNARELLI, ENGLEBRIGHT, PERRY, V. LOPEZ
  --  Multi-Sponsored by -- M. of A. CUSICK, GUNTHER, McENENY, J. MILLER
  -- read once and referred to the Committee on Transportation

AN ACT to amend the vehicle and traffic  law,  in  relation  to  insurer
  interests in certain motor vehicle repair shops

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

  Section 1. The vehicle and traffic law is  amended  by  adding  a  new
section 398-j to read as follows:
  S 398-J. INSURER INTEREST IN MOTOR VEHICLE REPAIR SHOPS PROHIBITED. 1.
PROHIBITION.  ON OR AFTER THE FIRST OF SEPTEMBER FOLLOWING THE EFFECTIVE
DATE OF THIS SECTION, AN INSURER MAY NOT HOLD NOR ACQUIRE ANY  OWNERSHIP
INTEREST IN A MOTOR VEHICLE REPAIR SHOP.
  2.  DISCLOSURE  REQUIREMENTS. (A) AN INSURER THAT, BEFORE THE FIRST OF
SEPTEMBER FOLLOWING THE EFFECTIVE DATE OF THIS SECTION, HAS AN OWNERSHIP
INTEREST IN A MOTOR VEHICLE REPAIR SHOP MUST DISCLOSE  TO  EACH  INSURED
THAT  THE  INSURED  HAS  THE  RIGHT TO USE ANY MOTOR VEHICLE REPAIR SHOP
SELECTED BY THE INSURED. THE INSURER SHALL MAKE THE DISCLOSURE IN  WRIT-
ING  IN  THE  MANNER  PRESCRIBED BY THE DEPARTMENT AND SHALL PROVIDE THE
DISCLOSURE:
  (1) AT THE TIME THE POLICY  IS  DELIVERED,  ISSUED  FOR  DELIVERY,  OR
RENEWED; AND
  (2)  WHEN  AN  ACCIDENT CLAIM COVERED BY THE POLICY IS REPORTED TO THE
INSURER BY THE INSURED.
  (B) AN INSURER MAY NOT OFFER AN INCENTIVE OR PROVIDE  COMPENSATION  TO
ANY  PERSON  TO  REWARD  THAT PERSON FOR REFERRING AN INSURED TO A MOTOR
VEHICLE REPAIR SHOP IN WHICH THE INSURER HAS AN OWNERSHIP INTEREST.
  3. DIVESTMENT. ANY INSURER THAT HOLDS OR ACQUIRES ANY OWNERSHIP INTER-
EST IN A MOTOR VEHICLE REPAIR SHOP  PRIOR  TO  THE  FIRST  OF  SEPTEMBER

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01832-01-1
              

A. 960                              2

FOLLOWING THE EFFECTIVE DATE OF THIS SECTION, SHALL DIVEST ITSELF OF ANY
SUCH INTEREST ON OR BEFORE SUCH DATE.
  4.  DEFINITIONS.  FOR  PURPOSES  OF  THIS  SECTION, "INSURER" MEANS AN
INSURER AUTHORIZED AS SUCH TO PERFORM  AN  INSURANCE  BUSINESS  IN  THIS
STATE  IN  COMPLIANCE  WITH  THE  INSURANCE  LAW, BY REASON OF A LICENSE
ISSUED AND IN FORCE PURSUANT TO THE LAWS OF THIS STATE OR OF A CORPORATE
CHARTER GRANTED AND IN FORCE PURSUANT TO THE LAWS OF THIS STATE, BUT NOT
INCLUDING ANY INSURER EXEMPTED FROM COMPLIANCE WITH THE REQUIREMENT THAT
IT OBTAIN A LICENSE TO DO BUSINESS UNDER THE PROVISIONS OF THE INSURANCE
LAW.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
necessary  for  the  implementation of this act on its effective date is
authorized and directed to be made  and  completed  on  or  before  such
effective date.