S T A T E O F N E W Y O R K
________________________________________________________________________
2540
2021-2022 Regular Sessions
I N A S S E M B L Y
January 19, 2021
___________
Introduced by M. of A. WEINSTEIN, SEAWRIGHT, ZEBROWSKI, CYMBROWITZ,
HEVESI, HUNTER, GOTTFRIED, TAYLOR -- read once and referred to the
Committee on Insurance
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.
LBD00029-01-1