Senate Bill S8178

2019-2020 Legislative Session

Relates to requiring certain perils be covered under business interruption insurance during the coronavirus disease 2019 (COVID-19) pandemic

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Archive: Last Bill Status - Stricken

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

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 17, 2020	recommit, enacting clause stricken
Apr 13, 2020	referred to insurance

co-Sponsors

2019-S8178 (ACTIVE) - Details

Law Section:: Insurance

2019-S8178 (ACTIVE) - Summary

Requires certain perils be covered under business interruption insurance during the coronavirus disease 2019 (COVID-19) pandemic.

2019-S8178 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8178

SPONSOR: MAYER
 
TITLE OF BILL:

An act in relation to requiring certain perils be covered under business
interruption insurance during the coronavirus disease 2019 (COVID-19)
pandemic

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill is intended to hold harmless businesses who currently hold
business interruption insurance, for losses sustained as a result of the
current COVID-19 health emergency, but for which no such coverage is
currently offered.

 
SUMMARY OF PROVISIONS:

Section 1 provides a mechanism by which certain businesses that suffer
losses due to interruption as a result of the COVID-2019 pandemic may
recover those losses from their insurer if they had a policy of business

interruption insurance in force on March 7, 2020, the date on which the
Governor declared a Public Health Emergency and State of Emergency in
Executive Order 202. The bill would apply to businesses covered by such
a policy with less than 100 eligible employees in the State of New York.
"Eligible employee" is defined as a full-time employee who works a
normal work week of 25 or more hours.

Section 2 provides that an insurer which indemnifies an insured who has
filed a claim pursuant to its provisions may apply to the Superintendent
of the Department of Financial Services for relief and reimbursement
from funds collected and made available for this purpose as provided in
the bill, pursuant to an additional special purpose assessment under the
general scheme already established by law to recover the general
expenses of the Department of Financial Services as the regulator of the
insurance industry in this State.  The superintendent shall establish
procedures for the submission and qualification of claims by insurers
which are eligible for reimbursement, incorporating such standards as
are necessary to protect against the submission of fraudulent claims by
insureds, and appropriate safeguards for insurers to employ in the
review and payment of such claims.

Section 3 authorizes the superintendent to impose upon, distribute
among, and collect from insurance companies, other than life and health
insurance companies, the additional amounts as may be necessary to
recover the amounts paid pursuant to the bill. The additional special
purpose apportionment authorized by the bill shall be distributed
according to essentially the same procedures and calculations as are
provided currently for the existing special purpose apportionment.

Section 4 sets the effective date.

 
JUSTIFICATION:

Industry sources have indicated that global virus transmission and
pandemic are generally excluded from the list of covered perils under
the existing standard business interruption insurance policy. The Insur-
ance Services Office, ISO, has developed a rider to provide an insured
with the option of purchasing such coverage, but to date, no states have
yet approved the form. This bill is intended to hold harmless businesses
who currently hold business interruption insurance, for losses sustained
as a result of the current COVID-19 health emergency, but for which no
such coverage is currently offered.

 
PRIOR LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

To be determined

 
EFFECTIVE DATE:
This act shall take effect immediately, shall be retroactive to March 7,
2020.

2019-S8178 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8178
 
                             I N  S E N A T E
 
                              April 13, 2020
                                ___________
 
 Introduced  by  Sen.  MAYER  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT in relation to requiring certain perils be covered under business
   interruption insurance during the coronavirus disease 2019  (COVID-19)
   pandemic
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. (a) Notwithstanding any provisions of law,  rule  or  regu-
 lation  to the contrary, every policy of insurance insuring against loss
 or damage to property, which includes the loss of use and occupancy  and
 business  interruption,  shall be construed to include among the covered
 perils under that policy, coverage for business  interruption  during  a
 period of a declared state emergency due to the coronavirus disease 2019
 (COVID-19) pandemic.
   (b) The coverage required by this section shall indemnify the insured,
 subject  to  the  limits  under  the policy, for any loss of business or
 business interruption for the duration of a period of a  declared  state
 emergency due to the coronavirus disease 2019 (COVID-19) pandemic.
   (c)  This section shall apply to policies issued to insureds with less
 than 100 eligible employees in force on the effective date of this  act.
 "Eligible  employee"  means a full-time employee who works a normal work
 week of 25 or more hours.
   § 2. (a) An insurer which indemnifies an insured who has filed a claim
 pursuant to section one of this act may apply to the  superintendent  of
 financial  services  for relief and reimbursement by the department from
 funds collected and made available  for  this  purpose  as  provided  in
 section three of this act.
   (b)  The  superintendent  of financial services shall establish proce-
 dures for the submission and qualification of claims by  insurers  which
 are  eligible for reimbursement pursuant to this act. The superintendent
 of financial services shall incorporate in these procedures such  stand-
 ards  as  are  necessary to protect against the submission of fraudulent
 claims by insureds, and appropriate safeguards for insurers to employ in
 the review and payment of such claims.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD16053-01-0

 S. 8178                             2
 
   § 3. (a) The superintendent of financial  services  is  authorized  to
 impose upon, distribute among, and collect from the companies engaged in
 business  pursuant  to the insurance law, such additional amounts as may
 be necessary to recover the amounts paid to insurers pursuant to section
 two of this act.
   (b)  The  additional special purpose apportionment authorized pursuant
 to subdivision (a) of this section shall be distributed in  the  propor-
 tion  that  the net written premiums received by each company subject to
 the apportionment authorized by this section for  insurance  written  or
 renewed  on  risks  in  this  state during the calendar year immediately
 preceding, bears to the sum total  of  all  such  net  written  premiums
 received  by all companies writing that insurance or coverage within the
 state during that calendar year, as reported.
   (c) For the purposes of this section, "net written premiums  received"
 means  gross  direct  premiums written, less return premiums thereon and
 dividends credited or paid to policyholders, as reported on  the  compa-
 ny's annual financial statement.
   §  4.  This  act shall take effect immediately, and shall be deemed to
 have been in full force and effect on and after March 7, 2020 and  shall
 apply to insurance policies in force on that date.

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Senate Bill S8178

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Archive: Last Bill Status - Stricken

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co-Sponsors

2019-S8178 (ACTIVE) - Details

2019-S8178 (ACTIVE) - Summary

2019-S8178 (ACTIVE) - Sponsor Memo

2019-S8178 (ACTIVE) - Bill Text download pdf

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Sponsored By

Shelley B. Mayer

Archive: Last Bill Status - Stricken

Actions

co-Sponsors

Brad Hoylman-Sigal

James Skoufis

2019-S8178 (ACTIVE) - Details

2019-S8178 (ACTIVE) - Summary

2019-S8178 (ACTIVE) - Sponsor Memo

2019-S8178 (ACTIVE) - Bill Text download pdf

Comments