NY State Senate Bill 2021-S4046

Senate Bill S4046

2021-2022 Legislative Session

Provides that payment of interest payment and attorney fees to claimant when payment of a claim is overdue shall be exclusive remedy

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

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to insurance
Feb 01, 2021	referred to insurance

2021-S4046 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §5106, Ins L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S6448
2011-2012: S1686
2013-2014: S2892
2015-2016: S1056
2017-2018: S779
2019-2020: S3513
2023-2024: S2814

2021-S4046 (ACTIVE) - Summary

Provides that payment of interest payment and attorney fees to claimant when payment of a claim is overdue shall be exclusive remedy when insurer fails to make timely payment; such failure of insurer to make timely payment or issue denial within 30 days after proof of claim has been submitted to insurer shall not preclude such insurer from issuing a denial or asserting a defense after the 30 day period has elapsed.

2021-S4046 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4046

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to payment of interest
penalty and attorney fees to a claimant when a claim is overdue and the
ability of an insurer to assert a defense or deny a claim if timely
payment is not made within thirty days after proof of claim has been
submitted

 
PURPOSE:

This bill would amend the insurance law by adding a new section 1106 and
would allow insurers additional time to investigate potentially fraudu-
lent no-fault automobile insurance claims.

 
SUMMARY OF PROVISIONS:

Section 1 amends subsection. (a) of section 5106 of the insurance law to
include "payment of the interest and reasonable attorney fees to a

claimant when payment of a claim is overdue shall be the exclusive reme-
dy when an insurer fails to make timely payment. The failure of an
insurer to make timely payment or issue a denial within thirty days
after proof of claim has been submitted to an insurer shall riot
preclude such insurer from issuing a denial or asserting a defense after
the thirty day period has elapsed."

Section 2 of this bill states that this act shall take effect sixty days
after it shall become a law.

 
JUSTIFICATION:

This bill will help to reduce no fault insurance fraud thereby reducing
premiums paid by consumers. This legislation clarifies the exclusive
penalty for an overdue payment to be interest and reasonable attorney
fees. Additionally, the legislation permits the insurer to issue a
denial after the thirty days and assert a defense after the thirty day
period. Often times in cases of fraud the investigation takes longer
than thirty days and requires additional time to determine the appropri-
ate course of action.

 
LEGISLATIVE HISTORY:

S.3513 of 2019-20;

S.779 of 2017-18;

S.1056 of 2015-16;

S.2892 of 2013-14;

S.1686 of 2011-12;

S.6448 of 2009-2010;

S.2638 of 2007-08

 
FISCAL IMPLICATIONS:
Minimal.

 
EFFECTIVE DATE:
This act shall take effect sixty days after it shall become a law.

2021-S4046 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4046
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 1, 2021
                                ___________
 
 Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to  payment  of  interest
   penalty  and  attorney  fees to a claimant when a claim is overdue and
   the ability of an insurer to assert a defense or deny a claim if time-
   ly payment is not made within thirty days after  proof  of  claim  has
   been submitted
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subsection (a) of section 5106  of  the  insurance  law  is
 amended to read as follows:
   (a)  Payments of first party benefits and additional first party bene-
 fits 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 promulgated by the superintendent in regulations.
 PAYMENT OF THE INTEREST PENALTY AND REASONABLE ATTORNEY FEES TO A CLAIM-
 ANT WHEN PAYMENT OF A CLAIM IS OVERDUE SHALL  BE  THE  EXCLUSIVE  REMEDY
 WHEN  AN INSURER FAILS TO MAKE TIMELY PAYMENT. THE FAILURE OF AN INSURER
 TO MAKE TIMELY PAYMENT OR ISSUE A DENIAL WITHIN THIRTY DAYS AFTER  PROOF
 OF CLAIM HAS BEEN SUBMITTED TO AN INSURER SHALL NOT PRECLUDE SUCH INSUR-
 ER  FROM  ISSUING  A  DENIAL OR ASSERTING A DEFENSE AFTER THE THIRTY DAY
 PERIOD HAS ELAPSED.
   § 2. This act shall take effect on the sixtieth  day  after  it  shall
 have become a law.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD07440-01-1

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