S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10529
 
                           I N  A S S E M B L Y
 
                               July 6, 2022
                                ___________
 
 Introduced by COMMITTEE ON RULES -- (at request of M. of A. Lunsford) --
   read once and referred to the Committee on Insurance
 
 AN  ACT to amend the insurance law, in relation to contractual liability
   insurance policies
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Paragraph 1 of subsection (c) of section 7903 of the insur-
 ance  law,  as amended by chapter 578 of the laws of 2000, is amended to
 read as follows:
   (1) [insure the performance of all its obligations under  all  service
 contracts   pursuant  to  a]  PURCHASE  ONE  OR  MORE  service  contract
 reimbursement insurance [policy] POLICIES issued by [an insurer] ONE  OR
 MORE  INSURERS authorized to issue service contract reimbursement insur-
 ance in this state or procured by an excess line  licensee  pursuant  to
 section  two  thousand  one  hundred  eighteen  of  this chapter.   EACH
 REIMBURSEMENT INSURANCE POLICY SHALL OBLIGATE THE  INSURER  THAT  ISSUED
 SUCH  POLICY  TO  EITHER  PROVIDE  REIMBURSEMENT TO THE PROVIDER FOR ALL
 OBLIGATIONS INCURRED  BY  A  PROVIDER  UNDER  THE  TERMS  OF  A  SERVICE
 CONTRACT,  OR  IN THE EVENT OF THE PROVIDER'S NONPERFORMANCE, PROVIDE OR
 PAY ON BEHALF  OF  THE  PROVIDER  ALL  COVERED  CONTRACTUAL  OBLIGATIONS
 INCURRED  BY THE PROVIDER. In the event the provider fails to insure its
 obligations pursuant to this paragraph or in the event that such  insur-
 ance shall lapse or be terminated, the provider shall comply with either
 paragraph  two or three of this subsection within forty-five days of the
 insurance lapse or termination;
   § 2. Subsection (b) of section 7905 of the insurance law, as added  by
 chapter 614 of the laws of 1997, is amended to read as follows:
   (b)  Service  contracts insured under [a] ONE OR MORE service contract
 reimbursement insurance [policy] POLICIES pursuant to [paragarph]  PARA-
 GRAPH one of subsection (c) of section seven thousand nine hundred three
 of this article shall contain a statement in substantially the following
 form:    "Obligations  of  the  provider under this service contract are
 insured under a service contract reimbursement insurance policy. If  the
 provider  fails  to  pay or provide service on a claim within sixty days
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD15495-01-2
 A. 10529                            2
 
 after proof of loss has been filed, the contract holder is  entitled  to
 make  a  claim  directly  against the insurer under the service contract
 reimbursement insurance policy." The service contract shall  also  state
 the  name  and  address  and a toll-free telephone number of the insurer
 under [the] EACH related service contract reimbursement insurance  poli-
 cy.
   § 3. This act shall take effect immediately.