Senate Bill S6643A

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6643--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               June 9, 2017
                                ___________
 
 Introduced  by  Sen.  DeFRANCISCO -- read twice and ordered printed, and
   when printed to be committed to the Committee on  Rules  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN  ACT  to amend the insurance law, in relation to establishing a civil
   remedy for unfair claim settlement practices

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The insurance law is amended by adding a new section 2601-a
 to read as follows:
   §  2601-A.  UNFAIR  CLAIM  SETTLEMENT  PRACTICES; CIVIL REMEDY. (A) AN
 INSURER DOING BUSINESS IN THIS STATE SHALL BE LIABLE TO THE HOLDER OF  A
 POLICY ISSUED, ISSUED FOR DELIVERY IN THIS STATE, OR RENEWED PURSUANT TO
 ARTICLE  THIRTY-FOUR  OF  THIS  CHAPTER  FOR DAMAGES AS PROVIDED IN THIS
 SECTION UPON SUCH POLICY  HOLDER  PROVING  BY  A  PREPONDERANCE  OF  THE
 EVIDENCE  THAT SUCH INSURER'S REFUSAL TO PAY OR AN UNREASONABLE DELAY BY
 THE INSURER IN PAYMENT TO THE POLICY HOLDER OF AMOUNTS CLAIMED TO BE DUE
 UNDER A PROVISION OF SUCH POLICY PROVIDING FIRST PARTY  PROPERTY  INSUR-
 ANCE  WAS  NOT  SUBSTANTIALLY JUSTIFIED. AN INSURER IS NOT SUBSTANTIALLY
 JUSTIFIED IN REFUSING TO PAY OR IN UNREASONABLY  DELAYING  PAYMENT  WHEN
 THE INSURER:
   (1)  INTENTIONALLY, RECKLESSLY OR BY GROSS NEGLIGENCE FAILS TO PROVIDE
 THE POLICY HOLDER WITH ACCURATE INFORMATION CONCERNING POLICY PROVISIONS
 RELATING THE COVERAGE AT ISSUE AT ANY  TIME  DURING  THE  INSURER-POLICY
 HOLDER RELATIONSHIP, INCLUDING BUT NOT LIMITED TO THE PERIOD AFTER WHICH
 A CLAIM HAS BEEN MADE BY THE POLICY HOLDER;
   (2)  FAILED  TO  EFFECTUATE IN GOOD FAITH A PROMPT, FAIR AND EQUITABLE
 SETTLEMENT OF A CLAIM SUBMITTED BY SUCH POLICY HOLDER IN WHICH LIABILITY
 OF SUCH INSURER TO SUCH POLICY HOLDER WAS REASONABLY CLEAR;
   (3) FAILED TO PROVIDE A TIMELY WRITTEN DENIAL  OF  A  POLICY  HOLDER'S
 CLAIM,  IN WHOLE OR IN PART, UPON A THOROUGH INVESTIGATION OF SUCH CLAIM
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02148-05-7

 S. 6643--A                          2
 
 WITH A FULL AND COMPLETE EXPLANATION OF SUCH DENIAL OR  PARTIAL  DENIAL,
 INCLUDING  REFERENCES  TO SPECIFIC POLICY PROVISIONS OR FINDINGS OF FACT
 AS A RESULT OF SUCH INVESTIGATION WHEREVER POSSIBLE;
   (4)  FAILED TO MAKE A FINAL DETERMINATION AND NOTIFY THE POLICY HOLDER
 IN WRITING OF ITS POSITION ON BOTH  LIABILITY  FOR,  AND  THE  INSURER'S
 VALUATION OF, A CLAIM WITHIN SIX MONTHS OF THE DATE ON WHICH IT RECEIVED
 ACTUAL OR CONSTRUCTIVE NOTICE OF THE LOSS UPON WHICH THE CLAIM IS BASED;
   (5)  FAILED  TO  ACT  IN GOOD FAITH BY COMPELLING THE POLICY HOLDER TO
 INSTITUTE SUIT TO RECOVER AMOUNTS  DUE  UNDER  ITS  POLICY  BY  OFFERING
 SUBSTANTIALLY LESS THAN THE AMOUNTS ULTIMATELY RECOVERED IN SUIT BROUGHT
 BY SUCH POLICY HOLDER; OR
   (6)  FAILED  TO  PROMPTLY PROCEED WITH THE APPRAISAL PROCESS ONCE SUCH
 HAS BEEN DEMANDED BY A POLICY HOLDER IN ANY  CLAIM  WHERE  COVERAGE  FOR
 APPORTION  OF THE CLAIM HAS BEEN ACCEPTED BY THE INSURER AND A DISAGREE-
 MENT EXISTS BETWEEN THE INSURED AND THE  INSURER  WITH  RESPECT  TO  THE
 VALUE OF COVERED PROPERTY OR THE AMOUNT, OR EXTENT OF THE COVERED LOSS.
   (B)  ANY  POLICY HOLDER MAY RECOVER DAMAGES, AS PROVIDED IN SUBSECTION
 (E) OF THIS SECTION, FROM AN INSURER SUBJECT TO THE PROVISIONS  OF  THIS
 SECTION  EITHER  AS  PART  OF AN ACTION TO RECOVER UNDER THE TERMS OF AN
 INSURANCE POLICY OR IN A SEPARATE ACTION; PROVIDED,  HOWEVER,  THAT  THE
 POLICY  HOLDER  FILES  WITH THE INSURER ON A FORM APPROVED BY THE SUPER-
 INTENDENT AND PROVIDED UPON ISSUANCE OF A POLICY AND UPON  NOTICE  OF  A
 CLAIM  TO  THE POLICY HOLDER BY THE INSURER NOTICE OF AN INTENT TO BRING
 AN ACTION PURSUANT TO THIS SECTION, WITH A RECITATION OF:
   (1) THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE ACTION;
   (2) THE NAME OR NAMES OF ANY EMPLOYEE, AGENT OR LEGAL  REPRESENTATIVE,
 INCLUDING  BUT  NOT  LIMITED  TO ANY INDEPENDENT ADJUSTER WHOSE SERVICES
 HAVE BEEN RETAINED BY THE INSURER FOR  THE  PURPOSES  OF  ADJUSTING  THE
 SUBJECT CLAIM, INVOLVED IN THE CLAIM, TO THE BEST KNOWLEDGE OF THE POLI-
 CY HOLDER; AND
   (3) REFERENCE TO ANY SPECIFIC POLICY PROVISIONS OR LANGUAGE THE POLICY
 HOLDER  CONSIDERS  THE  INSURER TO BE IN VIOLATION OF, TO THE BEST KNOW-
 LEDGE OF THE POLICY HOLDER.
   AN INSURER WHO IS THE SUBJECT OF THE CIVIL REMEDY  NOTICE  SHALL  HAVE
 SIXTY  DAYS FROM THE FILING OF THE REQUIRED NOTICE TO BRING THE CLAIM TO
 CLOSURE TO  THE  SATISFACTION  OF  THE  POLICY  HOLDER  AND  WITHIN  THE
 PROVISIONS  OF  THE UNDERLYING COVERAGE PROVISIONS OF THE SUBJECT INSUR-
 ANCE POLICY, AND THE POLICY HOLDER SHALL HAVE NO  BASIS  FOR  AN  ACTION
 THEREON THEREAFTER.
   (C)  THE RIGHTS ENUMERATED IN THIS SECTION ARE NOT THE EXCLUSIVE REME-
 DIES AVAILABLE TO THE POLICY HOLDER AND DO NOT PRECLUDE ANY  COMMON  LAW
 CLAIMS OR OTHER STATUTORY CLAIMS THAT MAY EXIST OR RISE.
   (D)  IN  ANY  TRIAL  OF  A CAUSE OF ACTION ASSERTED AGAINST AN INSURER
 PURSUANT TO THIS SECTION, EVIDENCE OF SETTLEMENT DISCUSSIONS, OFFERS  TO
 COMPROMISE, LOSS RESERVES AMOUNTS, AND ANY OTHER EVIDENCE OF THE  CLAIMS
 SETTLEMENT  PROCESS OF THE SUBJECT CLAIM, WHETHER SUCH EVIDENCE IS WRIT-
 TEN AND VERBAL, SHALL BE ADMISSIBLE.
   (E) A POLICY HOLDER MAY RECOVER:
   (1) ACTUAL DAMAGES;
   (2) CONSEQUENTIAL DAMAGES;
   (3) REASONABLE ATTORNEY'S FEES OR OTHER FEES INCURRED BY  THE  INSURED
 TO ENFORCE THE CLAIM AT ANY STAGE THEREOF; AND
   (4)  INTEREST  AT  TWICE  THE STATUTORY RATE REFLECTED IN SECTION FIVE
 THOUSAND FOUR OF THE CIVIL PRACTICE LAW AND RULES, TO BE  MEASURED  FROM
 THE  DATE  OF  BREACH  OR  THE DATE SIXTY DAYS AFTER THE FILING WITH THE
 INSURER OF A SWORN PROOF OF LOSS, WHICHEVER IS EARLIER.

 S. 6643--A                          3
 
   FOR THE PURPOSES OF CONSEQUENTIAL DAMAGES, IT SHALL BE  PRESUMED  THAT
 SUCH  CONSEQUENTIAL  DAMAGES WERE REASONABLY WITHIN THE CONTEMPLATION OF
 THE PARTIES AT THE TIME OF CONTRACTING.
   (F)  ALL AMOUNTS RECOVERED FROM AN INSURER IN ANY ACTION AUTHORIZED BY
 THIS SECTION OTHER THAN ACTUAL DAMAGES SHALL BE EXCLUDED BY THE  INSURER
 IN  ANY  RATE FILING TO BE SUBMITTED TO THE SUPERINTENDENT AND SHALL NOT
 CONSTITUTE ANY PORTION OF  A  PREMIUM  CHARGED  TO  ANY  POLICY  HOLDER.
 FURTHERMORE,  THE  EXISTENCE  OR RESOLUTION OF A DISPUTE SUBJECT TO THIS
 SECTION SHALL NOT BE CONSIDERED IN ANY  DECISION  TO  ISSUE,  ISSUE  FOR
 DELIVERY IN THE STATE OR RENEW ANY POLICY TO A POLICY HOLDER.
   § 2. This act shall take effect on the one hundred eightieth day after
 it  shall  have  become  a  law, and shall apply to all policies issued,
 issued for delivery in the state, or renewed on or after such date,  and
 provided,  further, shall apply to all claims pending or initiated on or
 after such date.