BILL NUMBER: S7767

SPONSOR: SEWARD
 
TITLE OF BILL:  An act to repeal certain provisions of the insurance
law relating to anti-arson applications

 
PURPOSE:

The purpose of this bill is to repeal section 3403 of the insurance law
and its accompanying regulations.

 
SUMMARY OF PROVISIONS:

Section one repeals section 3403 of the insurance law and all promulgat-
ed rules and regulations necessary to administer section 3403.

Section two establishes the effective date.

 
JUSTIFICATION:

              

In 1981 when New York first enacted its anti-arson application law
(originally section 168-j of the insurance law, now section 3403), arson
for profit was a significant economic and societal problem. New York's
anti-arson application law was enacted to give insurers ownership and
property valuation information to assist in the investigation of arson
for profit and to require property owners to sign a fraud statement.

However, present-day arson investigation techniques no longer rely on
the anti-arson application form to determine ownership and property
valuation and fraud statements are collected through other means when
adjusting a loss. Insurers have access to a multitude of third-party
sources to determine ownership and property values. Since the informa-
tion collected on the form is no longer used, completing and collecting
the form (which is required for both new and renewed insurance policies)
creates a significant burden for both consumers and insurers. Consumers
suffer because completing the form is burdensome and insurance carriers
must cancel inforce policies when the form is not returned, which means
that the policyholder may be without coverage.

Furthermore, consumers bear the ultimate administrative cost of having
insurers reinstate policies that have been cancelled when they fail to
renew the anti-arson application. Insurers are burdened by the inordi-
nate amount of time spent tracking down the anti-arson application from
property owners. Recognizing that the reason that this law was
originally enacted no longer exists, both Rochester and Buffalo repealed
the law in the most recent legislative session. In short, this law which
requires creation and maintenance of a document that no one uses,
creates a financial and administrative burden to both consumers and
insurers.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.