S T A T E O F N E W Y O R K
________________________________________________________________________
5699
2021-2022 Regular Sessions
I N A S S E M B L Y
February 24, 2021
___________
Introduced by M. of A. JOYNER, AUBRY -- read once and referred to the
Committee on Insurance
AN ACT to amend the insurance law, in relation to verification of claims
made under the comprehensive motor vehicle insurance reparations act
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 5106 of the insurance law, subsection (b) as
amended by chapter 452 of the laws of 2005 and subsection (d) as amended
by section 8 of part AAA of chapter 59 of the laws of 2017, is amended
to read as follows:
§ 5106. Fair claims settlement. (a) Payments of first party benefits
and additional first party benefits shall be made as the loss is
incurred. Such benefits are overdue if not paid within thirty days
after the claimant supplies proof of the fact and amount of loss
sustained. If proof is not supplied as to the entire claim, the amount
which is supported by proof is overdue if not paid within thirty days
after such proof is supplied. All overdue payments shall bear interest
at the rate of two percent per month. If a valid claim or portion was
overdue, the claimant shall also be entitled to recover his attorney's
reasonable fee, for services necessarily performed in connection with
securing payment of the overdue claim, subject to limitations promulgat-
ed by the superintendent in regulations.
(b) THE INSURER IS ENTITLED TO RECEIVE ALL ITEMS NECESSARY TO VERIFY
THE CLAIM, INCLUDING MEDICAL EXAMINATION AND EXAMINATION UNDER OATH OF
THE INJURED PARTY OR ANY ADDITIONAL VERIFICATION REQUIRED BY THE INSURER
TO ESTABLISH PROOF OF CLAIM. THE FAILURE OF THE INJURED PARTY TO APPEAR
FOR A SCHEDULED MEDICAL EXAMINATION OR EXAMINATION UNDER OATH OR TO
PROVIDE ANY OTHER ADDITIONAL VERIFICATION SHALL NEITHER BE A POLICY
VIOLATION NOR BE UTILIZED AS THE BASIS FOR THE DENIAL OF A CLAIM OR
DISCLAIMER, PROVIDED THE INJURED PARTY SUBMITS TO THE INSURER WRITTEN
PROOF OFFERING EITHER (1) REASONABLE JUSTIFICATION FOR THE FAILURE TO
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03914-01-1
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COMPLY; OR (2) A DEMONSTRABLE WILLINGNESS TO COMPLY WITHIN THIRTY CALEN-
DAR DAYS FROM THE DATE OF THE INJURED PARTY'S FAILURE TO APPEAR OR OTHER
VERIFICATION BECOMES OVERDUE. IF SUCH WRITTEN PROOF IS NOT PROVIDED
WITHIN A REASONABLE TIME PERIOD, THE INSURER MAY ONLY DENY THAT PORTION
OF THE CLAIM FOR WHICH THE REQUESTED MEDICAL EXAMINATION, EXAMINATION
UNDER OATH OR ADDITIONAL VERIFICATION WAS REQUIRED AS PROOF OF THE FACT
AND AMOUNT OF LOSS SUSTAINED. IN NO EVENT SHALL THE FAILURE OF THE
INJURED PARTY TO APPEAR FOR A SCHEDULED MEDICAL EXAMINATION OR EXAMINA-
TION UNDER OATH OR TO PROVIDE ANY OTHER ADDITIONAL VERIFICATION SERVE AS
THE BASIS FOR THE DENIAL OF THAT PORTION OF A CLAIM RELATING TO EMERGEN-
CY MEDICAL CARE PROVIDED WITHIN FORTY-EIGHT HOURS OF AN ACCIDENT.
(C) Every insurer shall provide a claimant with the option of submit-
ting any dispute involving the insurer's liability to pay first party
benefits, or additional first party benefits, the amount thereof or any
other matter which may arise pursuant to subsection (a) of this section
to arbitration pursuant to simplified procedures to be promulgated or
approved by the superintendent. Such simplified procedures shall include
an expedited eligibility hearing option, when required, to designate the
insurer for first party benefits pursuant to subsection [(d)] (E) of
this section. The expedited eligibility hearing option shall be a forum
for eligibility disputes only, and shall not include the submission of
any particular bill, payment or claim for any specific benefit for adju-
dication, nor shall it consider any other defense to payment.
[(c)] (D) An award by an arbitrator shall be binding except where
vacated or modified by a master arbitrator in accordance with simplified
procedures to be promulgated or approved by the superintendent. The
grounds for vacating or modifying an arbitrator's award by a master
arbitrator shall not be limited to those grounds for review set forth in
article seventy-five of the civil practice law and rules. The award of a
master arbitrator shall be binding except for the grounds for review set
forth in article seventy-five of the civil practice law and rules, and
provided further that where the amount of such master arbitrator's award
is five thousand dollars or greater, exclusive of interest and attor-
ney's fees, the insurer or the claimant may institute a court action to
adjudicate the dispute de novo.
[(d)] (E) (1) Except as provided in paragraph two of this subsection,
where there is reasonable belief more than one insurer would be the
source of first party benefits, the insurers may agree among themselves,
if there is a valid basis therefor, that one of them will accept and pay
the claim initially. If there is no such agreement, then the first
insurer to whom notice of claim is given shall be responsible for
payment. Any such dispute shall be resolved in accordance with the arbi-
tration procedures established pursuant to section five thousand one
hundred five of this article and regulations as promulgated by the
superintendent, and any insurer paying first-party benefits shall be
reimbursed by other insurers for their proportionate share of the costs
of the claim and the allocated expenses of processing the claim, in
accordance with the provisions entitled "other coverage" contained in
regulation and the provisions entitled "other sources of first-party
benefits" contained in regulation. If there is no such insurer and the
motor vehicle accident occurs in this state, then an applicant who is a
qualified person as defined in article fifty-two of this chapter shall
institute the claim against the motor vehicle accident indemnification
corporation.
(2) A group policy issued pursuant to section three thousand four
hundred fifty-five of this chapter shall provide first party benefits
A. 5699 3
when a dispute exists as to whether a driver was using or operating a
motor vehicle in connection with a transportation network company when
loss, damage, injury, or death occurs. A transportation network company
shall notify the insurer that issued the owner's policy of liability
insurance of the dispute within ten business days of becoming aware that
the dispute exists. When there is a dispute, the group insurer liable
for the payment of first party benefits under a group policy shall have
the right to recover the amount paid from the driver's insurer to the
extent that the driver would have been liable to pay damages in an
action at law.
§ 2. This act shall take effect immediately.