Assembly Bill A5780

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

                                  5780

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                              March 6, 2013
                               ___________

Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
  Committee on Insurance

AN ACT to amend the insurance law, in relation to establishing a private
  right of action for unfair claim settlement practices by an insurer

  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, paragraphs 4 and 5 of
subsection (a) as amended by chapter 547 of the laws of 1997  and  para-
graph 6 of subsection (a) as amended by chapter 388 of the laws of 2008,
is amended to read as follows:
  S  2601.  Unfair claim settlement practices; penalties. (a) No insurer
doing business in this state shall engage  in  unfair  claim  settlement
practices. Any of the following acts by an insurer, if committed without
just  cause  and  performed with such frequency as to indicate a general
business practice, shall constitute unfair claim settlement practices:
  (1) knowingly misrepresenting to claimants pertinent facts  or  policy
provisions relating to coverages at issue;
  (2) failing to acknowledge with reasonable promptness pertinent commu-
nications as to claims arising under its policies;
  (3) failing to adopt and implement reasonable standards for the prompt
investigation of claims arising under its policies;
  (4)  not attempting in good faith to effectuate prompt, fair and equi-
table settlements of claims submitted  in  which  liability  has  become
reasonably  clear, except where there is a reasonable basis supported by
specific information available for review by  the  department  that  the
claimant  has caused the loss to occur by arson. After receiving a prop-
erly executed proof of loss, the insurer shall advise  the  claimant  of
acceptance or denial of the claim within thirty working days;
  (5) compelling policyholders to institute suits to recover amounts due
under its policies by offering substantially less than the amounts ulti-
mately recovered in suits brought by them; [or]

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09116-01-3
              

A. 5780                             2

  (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.
  (b)  Evidence  as to numbers and types of complaints to the department
against an insurer and as to the department's complaint experience  with
other insurers writing similar lines of insurance shall be admissible in
evidence in any administrative or judicial proceeding under this section
or  article  twenty-four or seventy-four of this chapter, but no insurer
shall be deemed in violation of this section solely  by  reason  of  the
numbers and types of such complaints.
  (c)  If it is found, after notice and an opportunity to be heard, that
an insurer has violated this section,  each  instance  of  noncompliance
with  subsection  (a) [hereof] OF THIS SECTION may be treated as a sepa-
rate violation of this section  for  purposes  of  ordering  a  monetary
penalty  pursuant  to subsection (b) of section one hundred nine of this
chapter. A violation of this section shall not be a misdemeanor.
  (D) WHERE THE GOVERNOR HAS DECLARED A DISASTER EMERGENCY  PURSUANT  TO
SECTION  TWENTY-EIGHT  OF THE EXECUTIVE LAW, IN ADDITION TO THE RIGHT OF
ACTION GRANTED TO THE DEPARTMENT PURSUANT TO THIS  SECTION,  ANY  PERSON
WHO  HAS  SUFFERED  LOSS  OR  INJURY  BY REASON OF ANY VIOLATION OF THIS
SECTION RELATING TO  AN  INSURANCE  CLAIM  FOR  PROPERTY  DAMAGE  IN  AN
AFFECTED  AREA ENCOMPASSED BY THE EXECUTIVE ORDER DECLARING THE DISASTER
EMERGENCY MAY BRING AN ACTION IN HIS OR HER OWN NAME AS A  PLAINTIFF  TO
ENJOIN SUCH UNLAWFUL ACT OR PRACTICE AND AN ACTION TO RECOVER HIS OR HER
ACTUAL  DAMAGES.  THE  COURT  MAY,  IN  ITS  DISCRETION,  AWARD PUNITIVE
DAMAGES, IF THE COURT FINDS THAT  THE  DEFENDANT  INSURER  WILLFULLY  OR
KNOWINGLY  VIOLATED  THIS SECTION. THE COURT MAY AWARD REASONABLE ATTOR-
NEY'S FEES TO A PREVAILING PLAINTIFF.
  S 2. This act shall take effect immediately.