NY State Senate Bill 2019-S3634B

Senate Bill S3634B

2019-2020 Legislative Session

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

download bill text pdf

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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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to insurance
Jun 14, 2019	print number 3634b
Jun 14, 2019	amend and recommit to insurance
May 30, 2019	print number 3634a
May 30, 2019	amend and recommit to insurance
Feb 11, 2019	referred to insurance

Bill Amendments

Original

B (Active)

co-Sponsors

2019-S3634 - Details

See Assembly Version of this Bill:: A5629
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §3420, Ins L
Versions Introduced in 2019-2020 Legislative Session:: S3634, A917, A5629

2019-S3634 - Summary

Provides that a liability insurer may be sued for and the plaintiff may recover compensatory damages where 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.

2019-S3634 - Sponsor Memo

2019-S3634 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3634
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 11, 2019
                                ___________
 
 Introduced  by  Sens.  BRESLIN, SEWARD, FELDER -- read twice and ordered
   printed, and when printed to be committed to the Committee  on  Insur-
   ance
 
 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.
                                                            LBD00917-01-9

co-Sponsors

2019-S3634A - Details

See Assembly Version of this Bill:: A5629
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §3420, Ins L
Versions Introduced in 2019-2020 Legislative Session:: S3634, A917, A5629

2019-S3634A - Summary

2019-S3634A - Sponsor Memo

                                
 
BILL NUMBER: S3634A

SPONSOR: BRESLIN
 
TITLE OF BILL:  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

 
PURPOSE OR GENERAL IDEA OF BILL:

To clarify the duties of liability and casualty insurers to their
insureds.

 
SUMMARY OF SPECIFIC PROVISIONS:

This bill amends Insurance Law section 3420(b) regarding standard
provisions for liability insurance and the rights of the injured person,
to add that such person may also recover compensatory damages (or in an
appropriate case per existing law, punitive damages) from the insurer
where the insurer failed to effectuate a prompt and fair settlement of a
claim or portion of a claim, and where 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 judgment above the policy limits.

 
JUSTIFICATION:

Under current New York law, insurers have a financial incentive to deny
or delay fair payment of legitimate claims, and may offer an unreason-
ably low settlement that exposes the insured to a judgment in excess of
the policy. New Yorkers who pay insurance premiums should be able to
expect insurers to live up to their duty to act in good faith, according
at least equal or more favorable consideration to the policyholder's
interests as to its own business interests.  When insurers do not meet
this obligation it is important that the person who has been harmed by
such conduct has a viable, effective remedy. This bill provides this
remedy.

 
PRIOR LEGISLATIVE HISTORY:

2018: A.8004/S.6556 - A. Cal/S.Ins.
2017: A.8004/S.6556 - A. RR Cal/S.Rules

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
Immediately.

2019-S3634A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3634--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 11, 2019
                                ___________
 
 Introduced  by  Sens.  BRESLIN, SEWARD, FELDER -- read twice and ordered
   printed, and when printed to be committed to the Committee  on  Insur-
   ance  --  committee  discharged,  bill  amended,  ordered reprinted as
   amended and recommitted to said committee
 
 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 DAMAGES INCLUDING PUNITIVE DAMAGES AS THE COURT
 MAY ALLOW, AND INTEREST MEASURED FROM THE TIME OF  FAILURE  TO  OFFER  A
 FAIR  AND  REASONABLE  SETTLEMENT  IN ACCORDANCE WITH THIS SECTION, FROM
 SUCH INSURER TO THE FULL EXTENT OF THE JUDGMENT AGAINST THE INSURED, NOT
 LIMITED TO THE POLICY LIMITS AND NOT  SUBJECT  TO  THE  LIMITATIONS  AND
 CONDITIONS  OF  PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION, WHERE A
 PREPONDERANCE OF THE EVIDENCE ESTABLISHES THAT  THE  INSURER  FAILED  TO
 EFFECTUATE A PROMPT AND FAIR SETTLEMENT OF A CLAIM OR ANY PORTION THERE-
 OF,  AND WHERE UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES RELATED
 TO THE CLAIM, 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 JUDGMENT 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.
                                                            LBD00917-03-9

co-Sponsors

2019-S3634B (ACTIVE) - Details

See Assembly Version of this Bill:: A5629
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §3420, Ins L
Versions Introduced in 2019-2020 Legislative Session:: S3634, A917, A5629

2019-S3634B (ACTIVE) - Summary

2019-S3634B (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S3634B

SPONSOR: BRESLIN
 
TITLE OF BILL:  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

 
PURPOSE OR GENERAL IDEA OF BILL:

To clarify the duties of liability and casualty insurers to their
insureds.

 
SUMMARY OF SPECIFIC PROVISIONS:

This bill amends Insurance Law section 3420(b) regarding standard
provisions for liability insurance and the rights of the injured person,
to add that such person may also recover compensatory damages from the
insurer where the insurer failed to effectuate a prompt and fair settle-
ment of a claim or portion of a claim, and where 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 judgment above the policy limits.

 
JUSTIFICATION:

Under current New York law, insurers have a financial incentive to deny
or delay fair payment of legitimate claims, and may offer an unreason-
ably low settlement that exposes the insured to a judgment in excess of
the policy. New Yorkers who pay insurance premiums should be able to
expect insurers to live up to their duty to act in good faith, according
at least equal or more favorable consideration to the policyholder's
interests as to its own business interests. When insurers do not meet
this obligation it is important that the person who has been harmed by
such conduct has a viable, effective remedy. This bill provides this
remedy.

 
PRIOR LEGISLATIVE HISTORY:

2018: A.8004/8.6556 - A. Cal/S.Ins.
2017: A.8004/S.6556 - A. RR Cal/S.Rules

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

2019-S3634B (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3634--B
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 11, 2019
                                ___________
 
 Introduced  by Sens. BRESLIN, SEWARD, FELDER, GAUGHRAN -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Insurance  -- committee discharged, bill amended, ordered reprinted as
   amended and recommitted to said  committee  --  committee  discharged,
   bill  amended,  ordered  reprinted  as amended and recommitted to said
   committee
 
 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 DAMAGES INCLUDING COMPENSATORY DAMAGES AND INTER-
 EST  MEASURED  FROM  THE  TIME OF FAILURE TO OFFER A FAIR AND REASONABLE
 SETTLEMENT IN ACCORDANCE WITH THIS SECTION, FROM  SUCH  INSURER  TO  THE
 FULL  EXTENT  OF  THE  JUDGMENT  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  A  PREPONDERANCE  OF
 THE  EVIDENCE ESTABLISHES THAT THE INSURER FAILED TO EFFECTUATE A PROMPT
 AND FAIR SETTLEMENT OF A CLAIM OR ANY PORTION THEREOF, AND  WHERE  UNDER
 THE  TOTALITY  OF  THE FACTS AND CIRCUMSTANCES RELATED TO THE CLAIM, 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 JUDGMENT 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.
                                                            LBD00917-05-9

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Senate Bill S3634B

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Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

Bill Amendments

co-Sponsors

2019-S3634 - Details

2019-S3634 - Summary

2019-S3634 - Sponsor Memo

2019-S3634 - Bill Text download pdf

co-Sponsors

2019-S3634A - Details

2019-S3634A - Summary

2019-S3634A - Sponsor Memo

2019-S3634A - Bill Text download pdf

co-Sponsors

2019-S3634B (ACTIVE) - Details

2019-S3634B (ACTIVE) - Summary

2019-S3634B (ACTIVE) - Sponsor Memo

2019-S3634B (ACTIVE) - Bill Text download pdf

Comments