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Senate Bill S6556

2017-2018 Legislative Session

Provides for liability insurer payment of judgment in excess of policy limits when it fails to fairly settle the claim

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Archive: Last Bill Status - In Senate Committee Insurance Committee

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2017-S6556 (ACTIVE) - Details

See Assembly Version of this Bill:
A8004
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §3420, Ins L
Versions Introduced in Other Legislative Sessions:
2019-2020: S3634
2021-2022: S3551

2017-S6556 (ACTIVE) - Summary

Provides that a liability insurer may be sued for and the plaintiff may recover compensatory damages in excess of the limits of the policy when the insurer failed to effectuate prompt and fair settlement of the claim and considered its interests to the detriment of the insured so as to cause the rendering of a judgment in excess of the policy limits.

2017-S6556 (ACTIVE) - Sponsor Memo

2017-S6556 (ACTIVE) - Bill Text download pdf 

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6556
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               June 2, 2017
                                ___________
 
 Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the insurance law, in relation to maintaining an  action
   against  a liability insurer seeking compensatory damages in excess of
   the policy limits where such insurer failed to engage  in  prompt  and
   fair settlement of the claim
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 3420 of the insurance law is amended  by  adding  a
 new subsection (b-1) to read as follows:
   (B-1)  AN  ACTION  MAY ALSO BE MAINTAINED BY THE PERSONS IDENTIFIED IN
 PARAGRAPHS ONE, TWO AND THREE OF SUBSECTION (B) OF THIS SECTION  AGAINST
 THE  INSURER  TO  RECOVER  COMPENSATORY DAMAGES FROM SUCH INSURER TO THE
 FULL EXTENT OF THE JUDGEMENT AGAINST THE INSURED,  NOT  LIMITED  TO  THE
 POLICY LIMITS AND NOT SUBJECT TO THE LIMITATIONS AND CONDITIONS OF PARA-
 GRAPH TWO OF SUBSECTION (A) OF THIS SECTION, WHERE THE INSURER FAILED TO
 EFFECTUATE A PROMPT AND FAIR SETTLEMENT OF A CLAIM OR ANY PORTION THERE-
 OF,  AND  THE INSURER FAILED TO REASONABLY ACCORD AT LEAST EQUAL OR MORE
 FAVORABLE CONSIDERATION TO ITS INSURED'S INTERESTS AS IT DID TO ITS  OWN
 INTERESTS,  AND  THEREBY EXPOSED THE INSURED TO A JUDGEMENT IN EXCESS OF
 THE POLICY LIMITS.
   § 2. This act shall take effect immediately.
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11796-01-7

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