NY State Senate Bill 2017-S8525

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 09, 2018	referred to insurance

2017-S8525 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§7901, 7902 & 7903, Ins L

2017-S8525 (ACTIVE) - Summary

Relates to the definition of service contracts; exempts certain warranties and service contracts from applicability of insurance laws; defines road hazards.

2017-S8525 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8525

SPONSOR: SEWARD
 
TITLE OF BILL:  An act to amend the insurance law, in relation to
service contracts

 
PURPOSE:

 This bill would expand the types of services that may be included under
a service contract in order to provide consumers with the opportunity to
better budget for unexpected expenses related to their vehicles.

 
SUMMARY OF PROVISIONS:

Section 1 amends section 7901 of the insurance law to add a new
subsection (c) to make clear that warranties and maintenance agreements,
that many of our members sell, are not considered insurance.

Section 2 amends section 7902 to add a new subsection (j-1) to add the
definition of "road hazard" to mean a hazard that is encountered while
driving a motor vehicle and which may include, but not be limited to

potholes, rocks, wood debris, metal parts, glass, plastic, curbs or
composite scraps. Additionally, this section amends the current subdivi-
sion (k) by adding replacement of keys and key fobs to the definition of
what services can be included under service contracts; and allows the
Superintendent of DFS to add additional services to what can be consid-
ered service contracts, so long as it is not inconsistent with other
portions of the Insurance law.

Section 3 amends section 7903 to provide that the rate charged for a
service contract cannot exceed, but can be less than, the rate that is
filed with the Department of Financial Services.

Section 4 establishes the effective date.

 
JUSTIFICATION:

Currently, service contracts provided in New York must meet certain
statutory requirements, and often are subject to regulation as insur-
ance, when such a categorization is ill-fitting. Most auto service
contracts and warranties provide protection for consumers from unex-
pected fees and costs associated with owning a vehicle, which may fall
outside of their coverage under the standard warranties. Modifying the
law to permit these products will allow consumers to better plan and
budget for expenses related to their vehicles, and help to protect them
from unexpected costs.

This bill makes several changes to the service contract statute in the
insurance law. This bill will ensure that there is explicit statutory
reference to exclude service contracts and warranty from treatment as
insurance, expand coverage, and allow providers to charge less for a
service contract than the rate that is filed with the Department of
Financial Services. These changes will make more products available to
consumers, and allow greater flexibility to the industry, while remain-
ing compliant with New York's guidelines and regulatory scheme for
service contracts.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall become
law.

2017-S8525 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8525
 
                             I N  S E N A T E
 
                                May 9, 2018
                                ___________
 
 Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to service contracts
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  7901 of the insurance law is amended by adding a
 new subsection (c) to read as follows:
   (C) THE PRODUCTS LISTED IN SUBSECTION (B) OF THIS SECTION  SHALL  ALSO
 NOT  CONSTITUTE INSURANCE AND SHALL NOT BE SUBJECT TO THE INSURANCE LAWS
 OF THIS STATE EXCEPT AS MADE EXPRESSLY APPLICABLE TO THEM.
   § 2. Subsection (k) of section 7902 of the insurance law,  as  amended
 by  chapter  409  of  the  laws of 2012, is amended and a new subsection
 (j-1) is added to read as follows:
   (J-1) "ROAD HAZARD" MEANS A HAZARD THAT IS ENCOUNTERED WHILE DRIVING A
 MOTOR VEHICLE AND WHICH MAY INCLUDE, BUT NOT  BE  LIMITED  TO  POTHOLES,
 ROCKS,  WOOD  DEBRIS,  METAL  PARTS, GLASS, PLASTIC, CURBS, OR COMPOSITE
 SCRAPS.
   (k) "Service contract" means a contract or agreement, for  a  separate
 or  additional  consideration,  for  a  specific duration to perform the
 repair, replacement or maintenance of property, or  indemnification  for
 repair,  replacement  or  maintenance,  due  to a defect in materials or
 workmanship or wear and tear, with or without additional  provision  for
 indemnity  payments  for incidental damages, provided any such indemnity
 payment per incident shall not exceed the purchase price of the property
 serviced.  Service contracts may include towing,  rental  and  emergency
 road  service, and may also provide for the repair, replacement or main-
 tenance of property for damage resulting from  power  surges  and  acci-
 dental   damage  from  handling.  Service  contracts  may  also  include
 contracts to repair, replace  or  maintain  residential  appliances  and
 systems.  Such  term  shall  also mean a contract or agreement [made] TO
 PROVIDE ONE OR MORE OF  THE  FOLLOWING  SERVICES  (1)  [by  or  for  the
 manufacturer  or  seller of a motor vehicle tire for] repair or replace-
 ment of the tire or wheel as the result of damage arising  from  a  road
 hazard,  (2)  [by or for the supplier or seller of a service for] repair
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD15858-01-8

 S. 8525                             2
 
 of chips or cracks in a motor  vehicle  windshield,  but  not  including
 services  that  involve  the replacement of the entire windshield, [and]
 (3) [by or for the supplier or  seller  of  a  service  for]  repair  or
 removal  of dents, dings or creases from a motor vehicle without affect-
 ing the existing paint finish using paintless  dent  repair  techniques,
 but  not including services that involve the replacement of vehicle body
 panels, or sanding, bonding or painting, (4) THE REPLACEMENT OF A  MOTOR
 VEHICLE  KEY  OR  KEY-FOB  IN  THE EVENT THAT THE KEY OR KEY-FOB BECOMES
 INOPERABLE OR IS LOST OR STOLEN, AND (5) OTHER  SERVICES  WHICH  MAY  BE
 APPROVED   BY   THE  SUPERINTENDENT,  IF  NOT  INCONSISTENT  WITH  OTHER
 PROVISIONS OF THIS ARTICLE.
   § 3. Subsection (a) of section 7903 of the insurance law,  as  amended
 by chapter 409 of the laws of 2012, is amended to read as follows:
   (a) Notwithstanding any other provision of this chapter to the contra-
 ry,  the marketing, sale, offering for sale, issuance, making, proposing
 to make and administration of service contracts by any provider,  admin-
 istrator  or  other person, shall be exempt from all other provisions of
 this chapter. A provider may, but is not required to, appoint an  admin-
 istrator  or  other  designee  to  be  responsible for any or all of the
 administration of service contracts and compliance  with  this  article.
 Notwithstanding  any  other  provision  of this article, a provider of a
 service contract, as defined in paragraphs two and three  of  subsection
 (k)  of  section seven thousand nine hundred two of this article, shall,
 at least thirty days prior to the effective date of an initial  provider
 fee,  or a change in a provider fee, file the amount of the provider fee
 with the  superintendent  and  such  filing  shall  be  open  to  public
 inspection; and provided further that the provider fee shall not exceed,
 BUT  MAY  BE  LESS  THAN,  the amount filed. The requirement to file the
 amount of the provider fee with the superintendent  in  this  subsection
 shall  not  apply to fees set forth in any agreement to which an author-
 ized insurer is a party.
   § 4. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.

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Senate Bill S8525

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Archive: Last Bill Status - In Senate Committee Insurance Committee

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2017-S8525 (ACTIVE) - Details

2017-S8525 (ACTIVE) - Summary

2017-S8525 (ACTIVE) - Sponsor Memo

2017-S8525 (ACTIVE) - Bill Text download pdf

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Sponsored By

James L. Seward

Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

2017-S8525 (ACTIVE) - Details

2017-S8525 (ACTIVE) - Summary

2017-S8525 (ACTIVE) - Sponsor Memo

2017-S8525 (ACTIVE) - Bill Text download pdf

Comments