S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4714
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 9, 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 enacting the  "automo-
   bile insurance fraud prevention act of 2021"
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act shall be known and may be cited as the "automobile
 insurance fraud prevention act of 2021".
   § 2. 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) (1) Payments of first party bene-
 fits 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.
   (2)  THE FAILURE TO ISSUE A DENIAL OF A CLAIM WITHIN THIRTY DAYS SHALL
 NOT PRECLUDE THE INSURER OR SELF-INSURER  FROM  PRESENTING  EVIDENCE  TO
 ESTABLISH  THAT (A) THE SERVICES OR ITEMS BILLED FOR IN A CLAIM WERE NOT
 PROVIDED; (B) CERTAIN PORTIONS OF THE CHARGES FOR SERVICES  IN  A  CLAIM
 EXCEED,  BY  MORE THAN TEN PERCENT, THE CHARGES PERMISSIBLE UNDER SCHED-
 ULES PREPARED AND ESTABLISHED PURSUANT TO SUBSECTIONS  (A)  AND  (B)  OF
 SECTION  FIVE  THOUSAND  ONE  HUNDRED  EIGHT OF THIS ARTICLE, OR (C) THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09406-01-1

 S. 4714                             2
 
 EVENT FROM WHICH THE CLAIM AROSE WAS BASED UPON AN INTENT TO DEFRAUD  AN
 INSURER  OR  SELF-INSURER.  NOTHING  CONTAINED  IN  THIS PARAGRAPH SHALL
 PRECLUDE AN INSURER FROM CONTESTING THE EXISTENCE OF  APPLICABLE  INSUR-
 ANCE COVERAGE FOR THE LOSS CLAIMED.
   (3) AN INSURER MAY DENY A CLAIM ON THE BASIS OF LACK OF MEDICAL NECES-
 SITY  NOT  LATER  THAN  SIXTY  DAYS  AFTER THE DATE UPON WHICH THE CLAIM
 BECAME OVERDUE. ANY DENIAL OF A CLAIM WHICH IS  BASED  UPON  A  LACK  OF
 MEDICAL  NECESSITY SHALL BE BASED UPON REVIEW BY A LICENSED PROVIDER WHO
 TYPICALLY DIAGNOSES AND  PROVIDES  TREATMENT  FOR  THE  CONDITION  UNDER
 REVIEW, OR TYPICALLY PROVIDES THE HEALTH CARE SERVICE OR TREATMENT UNDER
 REVIEW.  COPIES  OF  ALL  REPORTS PREPARED BY A HEALTH CARE PROVIDER WHO
 EXAMINES A CLAIMANT AT THE REQUEST OF AN INSURER OR REVIEWS A CLAIM  FOR
 MEDICAL  BENEFITS  AT THE REQUEST OF AN INSURER SHALL BE PROVIDED TO THE
 CLAIMANT, THE CLAIMANT'S ATTORNEY AND  THE  CLAIMANT'S  TREATING  HEALTH
 CARE PROVIDER WITHIN THIRTY BUSINESS DAYS OF SUCH EXAMINATION OR REVIEW.
   (b)  [Every  insurer shall provide a] (1) A claimant [with] SHALL HAVE
 the option of submitting 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)] (F) of this section. The  expedited  eligi-
 bility  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 adjudication, nor shall it consider
 any other defense to payment.
   [(c)] (2) THE COMMENCEMENT OF A COURT PROCEEDING OR THE SUBMISSION  OF
 A  DISPUTE TO ARBITRATION SHALL NOT PRECLUDE A CLAIMANT FROM ELECTING TO
 SUBMIT OTHER DISPUTES ARISING FROM THE SAME INSTANCE OF USE OR OPERATION
 OF A MOTOR VEHICLE TO THE ALTERNATE FORUM. HOWEVER, WITH  THE  EXCEPTION
 OF  A  PROCEEDING  BROUGHT PURSUANT TO ARTICLE SEVENTY-FIVE OF THE CIVIL
 PRACTICE LAW AND RULES, A CLAIMANT MAY NOT SUBMIT  A  DISPUTE  REGARDING
 THE SAME DENIAL TO MULTIPLE FORUMS.
   (3)  ARBITRATORS  ARE REQUIRED TO FOLLOW AND APPLY SUBSTANTIVE LAW. 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, WHICH SHALL OFFER THE
 PARTIES THE OPPORTUNITY TO SUBMIT WRITTEN BRIEFS. The grounds for vacat-
 ing 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 AND SHALL INCLUDE FACTUAL, LEGAL AND
 PROCEDURAL  ERRORS.    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 attorney's fees, the insurer or the
 claimant may institute a court action to adjudicate the dispute de novo.
   [(d)] (C) WITH RESPECT TO AN ACTION FOR SERIOUS PERSONAL INJURY PURSU-
 ANT TO SECTION FIVE THOUSAND ONE HUNDRED FOUR OF THIS ARTICLE, THE AWARD
 OF AN ARBITRATOR OR MASTER ARBITRATOR RENDERED IN A  PROCEEDING  BROUGHT
 PURSUANT TO THIS ARTICLE, OTHER THAN AN AWARD PERTAINING TO THE ISSUE OF
 THE  EXISTENCE  OF  INSURANCE  COVERAGE, SHALL NOT CONSTITUTE COLLATERAL
 ESTOPPEL OF THE ISSUES ARBITRATED.

 S. 4714                             3
 
   (D) WITH RESPECT TO AN ARBITRATION OR AN ACTION COMMENCED IN  A  COURT
 OF  COMPETENT  JURISDICTION  INITIATED  TO  OBTAIN PAYMENT OF AN OVERDUE
 CLAIM FOR THE PAYMENT OF MEDICAL BENEFITS  PRIMA  FACIE  ENTITLEMENT  TO
 BENEFITS  SHALL  BE ESTABLISHED BY FILING A VERIFICATION BY THE CLAIMANT
 WITH THE ARBITRATION DEMAND OR COMPLAINT, SETTING FORTH THAT:
   (1)  THE  CLAIMANT  WAS  LICENSED  TO RENDER THE SERVICES OR THE ITEMS
 PROVIDED AT THE TIME THEY WERE PROVIDED;
   (2) THE SERVICES WERE RENDERED OR ITEMS SUPPLIED BY THE CLAIMANT;
   (3) THE SERVICES OR ITEMS WERE MEDICALLY NECESSARY, OR,  FOR  SERVICES
 OR  SUPPLIES  PROVIDED PURSUANT TO PRESCRIPTION, THAT SUCH WERE PROPERLY
 SUPPORTED BY A PRESCRIPTION;
   (4) THE CLAIMANT RECEIVED AN ASSIGNMENT OF BENEFITS FROM  THE  INJURED
 PARTY OR THE GUARDIAN OR PARENT OF THE INJURED PARTY; AND
   (5)  THE  CLAIMANT  AUTHORIZED  THE PARTICULAR ATTORNEY OR LAW FIRM TO
 COMMENCE THE SUIT.
   (E) WITH RESPECT TO AN ACTION COMMENCED IN A COURT OF COMPETENT JURIS-
 DICTION TO OBTAIN BENEFITS PURSUANT TO THIS ARTICLE:
   (1) A REBUTTABLE  PRESUMPTION  OF  ADMISSIBILITY  ATTACHES  TO  CLAIMS
 FORMS, DENIAL OF CLAIMS FORMS, VERIFICATION REQUESTS AND RESPONSES THER-
 ETO,  WHEN  SUCH  ARE ACCOMPANIED BY AN AFFIDAVIT ESTABLISHING THAT SUCH
 FORMS ARE BUSINESS RECORDS PURSUANT TO RULE FORTY-FIVE HUNDRED  EIGHTEEN
 OF THE CIVIL PRACTICE LAW AND RULES.
   (2)  A  REBUTTABLE  EVIDENTIARY PRESUMPTION SHALL ATTACH TO SUCH DOCU-
 MENTS REFERENCED IN PARAGRAPH ONE  OF  THIS  SUBSECTION  THAT  SUCH  ARE
 VALID.
   (3)  A  REBUTTABLE  EVIDENTIARY PRESUMPTION SHALL ATTACH TO SUCH DOCU-
 MENTS REFERENCED IN PARAGRAPH ONE OF  THIS  SUBSECTION  THAT  SUCH  WERE
 MAILED TO THE ADDRESS CONTAINED THEREON, ON THE DATE CONTAINED THEREON.
   (4)  A  REBUTTABLE  EVIDENTIARY  PRESUMPTION SHALL ATTACH TO PROOFS OF
 PAYMENT THAT SUCH PAYMENTS WERE MADE BY THE INSURER AND RECEIVED BY  THE
 PLAINTIFF.
   (5)  IN  MATTERS  WHERE  THE INSURER'S DENIAL IS BASED UPON AN ALLEGED
 LACK OF MEDICAL NECESSITY, A  REBUTTABLE  PRESUMPTION  OF  ADMISSIBILITY
 ATTACHES TO MEDICAL REPORTS OF THE CLAIMANT'S TREATING PROVIDERS.
   (6)  NOTHING  CONTAINED IN THIS SUBSECTION SHALL PRECLUDE A PARTY FROM
 OFFERING EVIDENCE AT TRIAL TO REBUT ANY PRESUMPTION IN THIS  SUBSECTION,
 NOR  TO PRECLUDE AN INSURER FROM OFFERING EVIDENCE AT TRIAL ON ANY MERI-
 TORIOUS, NON-PRECLUDED DEFENSE TO PAYMENT OF THE BENEFITS.
   (7) THE DEPOSITION OF ANY PERSON MAY BE USED BY ANY PARTY WITHOUT  THE
 NECESSITY OF SHOWING UNAVAILABILITY OR SPECIAL CIRCUMSTANCES, SUBJECT TO
 THE  RIGHT  OF  ANY PARTY TO MOVE PURSUANT TO SECTION THIRTY-ONE HUNDRED
 THREE OF THE CIVIL PRACTICE LAW AND RULES  TO  PREVENT  ABUSE,  PROVIDED
 THAT THE PARTY AGAINST WHOM THE EVIDENCE IS OFFERED HAD BEEN AFFORDED AN
 OPPORTUNITY TO PARTICIPATE AND QUESTION THE WITNESS AT THE DEPOSITION.
   (F)  (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 arbitration proce-
 dures  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

 S. 4714                             4
 
 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
 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.
   § 3. Section 5109 of the insurance law, as added by chapter 423 of the
 laws of 2005, is amended to read as follows:
   § 5109. Unauthorized providers of health services. (a) The superinten-
 dent[,  in  consultation with the commissioner of health and the commis-
 sioner of education,] shall  by  regulation,  promulgate  standards  and
 procedures  for  investigating  and  suspending or removing the authori-
 zation for providers of health services to demand or request payment for
 health services as specified in  paragraph  one  of  subsection  (a)  of
 section  five  thousand  one  hundred  two of this article upon findings
 reached after investigation pursuant to this section.  Such  regulations
 shall ensure the same or greater due process provisions, [including] AND
 INCLUDE notice and opportunity to be heard, as those afforded physicians
 investigated  under  article  two  of  the workers' compensation law and
 shall include provision for notice to all providers of  health  services
 of the provisions of this section and regulations promulgated thereunder
 at  least  ninety  days  in  advance of the effective date of such regu-
 lations.  AS USED IN THIS SECTION,  "HEALTH  SERVICES"  MEANS  SERVICES,
 SUPPLIES, THERAPIES OR OTHER TREATMENT AS SPECIFIED IN SUBPARAGRAPH (I),
 (II) OR (IV) OF PARAGRAPH ONE OF SUBSECTION (A) OF SECTION FIVE THOUSAND
 ONE HUNDRED TWO OF THIS ARTICLE.
   (b)  [The  commissioner  of  health  and the commissioner of education
 shall provide a list of the names of all providers  of  health  services
 who  the  commissioner of health and the commissioner of education shall
 deem, after  reasonable  investigation,  not  authorized  to  demand  or
 request  any  payment  for medical services in connection with any claim
 under this article because such] FOLLOWING THE HEARING CONDUCTED  PURSU-
 ANT  TO  THE  PROCEDURES  AND  REGULATION  PROMULGATED  PURSUANT TO THIS
 SECTION, THE SUPERINTENDENT MAY PROHIBIT A PROVIDER OF  HEALTH  SERVICES
 FROM  DEMANDING  OR  REQUESTING PAYMENT FOR HEALTH SERVICES SUBSEQUENTLY
 RENDERED UNDER THIS ARTICLE, FOR A PERIOD NOT EXCEEDING THREE YEARS,  IF
 THE  SUPERINTENDENT  DETERMINES,  AFTER  NOTICE  AND  HEARING,  THAT THE
 provider of health services:
   (1) has ADMITTED TO, OR been FOUND guilty of, professional [or  other]
 misconduct  [or  incompetency],  AS  DEFINED  IN  THE  EDUCATION LAW, in
 connection with [medical] HEALTH services rendered under  this  article;
 or
   (2)  has  exceeded the limits of his or her professional competence in
 rendering medical care under this article or has knowingly made a  false

 S. 4714                             5
 
 statement  or representation as to a material fact in any medical report
 made in connection with any claim under this article; or
   (3)  solicited,  or  has  employed  another  to solicit for himself or
 herself or for another, professional treatment, examination or  care  of
 an injured person in connection with any claim under this article; or
   (4)  has  refused  to appear before, or to answer upon request of, the
 [commissioner of health, the] superintendent[,] or any  duly  authorized
 officer  of  the  state,  any  legal question, or REFUSED to produce any
 relevant information concerning [his or her] THE conduct OF THE PROVIDER
 OF  HEALTH  SERVICES  in  connection  with  [rendering  medical]  HEALTH
 services RENDERED under this article; or
   (5)  has  engaged  in  [patterns]  A  PATTERN  of  billing for: HEALTH
 services [which were not provided.] ALLEGED TO HAVE BEEN RENDERED  UNDER
 THIS  ARTICLE, WHEN THE HEALTH SERVICES WERE NOT RENDERED, PROVIDED THAT
 THIS SHALL NOT BE CONSTRUED TO APPLY TO GOOD  FAITH  DISPUTES  REGARDING
 THE  APPROPRIATENESS  OF  A  PARTICULAR CODING TO DESCRIBE A HEALTH CARE
 SERVICE; OR
   (6) UTILIZED UNLICENSED PERSONS TO RENDER HEALTH SERVICES  UNDER  THIS
 ARTICLE, WHEN ONLY A PERSON LICENSED IN THIS STATE MAY RENDER THE HEALTH
 SERVICES; OR
   (7)  UTILIZED  LICENSED  PERSONS  TO RENDER HEALTH SERVICES UNDER THIS
 ARTICLE, WHEN RENDERING THE HEALTH SERVICES  IS  BEYOND  THE  AUTHORIZED
 SCOPE OF THE LICENSE OF SUCH PERSON; OR
   (8)  UNLAWFULLY  CEDED  OWNERSHIP,  OPERATION OR CONTROL OF A BUSINESS
 ENTITY AUTHORIZED TO PROVIDE PROFESSIONAL HEALTH SERVICES IN THIS STATE,
 INCLUDING BUT NOT LIMITED TO A PROFESSIONAL SERVICE CORPORATION, PROFES-
 SIONAL LIMITED LIABILITY COMPANY OR REGISTERED LIMITED  LIABILITY  PART-
 NERSHIP,  TO  A  PERSON NOT LICENSED TO RENDER THE HEALTH SERVICES WHICH
 THE ENTITY IS LEGALLY AUTHORIZED TO PROVIDE; OR
   (9) COMMITTED A FRAUDULENT INSURANCE ACT AS DEFINED IN SECTION  176.05
 OF THE PENAL LAW; OR
   (10)  HAS  BEEN CONVICTED OF A CRIME INVOLVING FRAUDULENT OR DISHONEST
 PRACTICES; OR
   (11) HAS, AFTER WARNING BY THE SUPERINTENDENT, ENGAGED IN A PATTERN OF
 UNLAWFULLY ATTEMPTING TO COLLECT PAYMENT DIRECTLY FROM  THE  PATIENT  OR
 ELIGIBLE  PERSON  FOR  SERVICES  RENDERED  UNDER  THIS ARTICLE WHEN SUCH
 ATTEMPTS VIOLATE THE TERMS OF AN ENFORCEABLE ASSIGNMENT OF BENEFITS.
   (c) [Providers] THE SUPERINTENDENT SHALL  BY  REGULATION  DEVELOP  DUE
 PROCESS  PROCEDURES  TO  ASSURE  A  HEALTH  PROVIDER  ACCUSED UNDER THIS
 SECTION HAS APPROPRIATE NOTICE, AN OPPORTUNITY FOR A  FAIR  HEARING  AND
 APPEAL  PRIOR  TO  A DETERMINATION THAT THE HEALTH PROVIDER MAY NOT BILL
 FOR SERVICES UNDER THIS SECTION. A PROVIDER  of  health  services  shall
 [refrain  from  subsequently  treating  for  remuneration,  as a private
 patient, any person seeking medical treatment]  NOT  DEMAND  OR  REQUEST
 PAYMENT  FOR  ANY  HEALTH  SERVICES under this article [if such provider
 pursuant to this section has been prohibited from demanding or  request-
 ing  any  payment  for  medical  services under this article. An injured
 claimant so treated or examined may raise this  as]  THAT  ARE  RENDERED
 DURING  THE TERM OF THE PROHIBITION ORDERED BY THE SUPERINTENDENT PURSU-
 ANT TO SUBSECTION (B) OF THIS SECTION. THE PROHIBITION  ORDERED  BY  THE
 SUPERINTENDENT  MAY BE a defense in any action by [such] THE provider OF
 HEALTH SERVICES for payment for  [treatment]  HEALTH  SERVICES  rendered
 PURSUANT  TO  THIS  ARTICLE  at  any  time  after such provider has been
 prohibited from demanding  or  requesting  payment  for  [medical]  SUCH
 HEALTH services in connection with any claim under this article.

 S. 4714                             6

   (d)  The  [commissioner  of  health and the commissioner of education]
 SUPERINTENDENT shall maintain and regularly update a database containing
 a list of providers of health services prohibited by this  section  from
 demanding  or requesting any payment [for health services connected to a
 claim] RENDERED under this article and shall make [such] THE information
 available  to  the  public  [by  means  of  a website and by a toll free
 number].
   (e) THE SUPERINTENDENT MAY LEVY A CIVIL PENALTY  NOT  EXCEEDING  FIFTY
 THOUSAND DOLLARS ON ANY PROVIDER OF HEALTH SERVICES THAT THE SUPERINTEN-
 DENT  PROHIBITS FROM DEMANDING OR REQUESTING PAYMENT FOR HEALTH SERVICES
 PURSUANT TO SUBSECTION (B) OF THIS SECTION. ANY  CIVIL  PENALTY  IMPOSED
 FOR  A  FRAUDULENT  INSURANCE  ACT,  AS DEFINED IN SECTION 176.05 OF THE
 PENAL LAW, SHALL BE LEVIED PURSUANT TO ARTICLE FOUR OF THIS CHAPTER.
   (F) Nothing in this section shall be  construed  as  limiting  in  any
 respect the powers and duties of the commissioner of health, commission-
 er  of  education  or  the  superintendent  to  investigate instances of
 misconduct by a [health care] provider [and, after a  hearing  and  upon
 written  notice  to  the provider, to temporarily prohibit a provider of
 health services under such investigation from  demanding  or  requesting
 any  payment  for  medical  services under this article for up to ninety
 days from the date of such notice] OF HEALTH SERVICES AND TAKE APPROPRI-
 ATE ACTION PURSUANT TO ANY OTHER PROVISION OF LAW.  A  DETERMINATION  OF
 THE  SUPERINTENDENT PURSUANT TO SUBSECTION (B) OF THIS SECTION SHALL NOT
 BE BINDING UPON THE COMMISSIONER OF HEALTH OR THE COMMISSIONER OF EDUCA-
 TION IN A  PROFESSIONAL  DISCIPLINE  PROCEEDING  RELATING  TO  THE  SAME
 CONDUCT.
   §  4.  Subsection (d) of section 5102 of the insurance law, as amended
 by chapter 955 of the laws of 1984, is amended to read as follows:
   (d) "Serious injury" means a personal injury which results  in  death;
 dismemberment; significant disfigurement; a fracture; loss of a fetus; A
 COMPLETE  TEAR  OR  RUPTURE  OF  A NERVE, TENDON, LIGAMENT, CARTILAGE OR
 MUSCLE; A TEAR, RUPTURE OR IMPINGEMENT OF  A  NERVE,  TENDON,  LIGAMENT,
 CARTILAGE  OR MUSCLE WHICH RESULTS IN A SIGNIFICANT IMPAIRMENT OF A BODY
 ORGAN, MEMBER, FUNCTION OR SYSTEM; permanent  loss  of  use  of  a  body
 organ, member, function or system; permanent consequential limitation of
 use  of  a body organ or member; significant limitation of use of a body
 function or system; or a medically determined injury or impairment of  a
 non-permanent  nature  which prevents the injured person from performing
 substantially all of the material acts which  constitute  such  person's
 usual  and  customary  daily  activities  for  not less than ninety days
 during the one hundred eighty days immediately following the  occurrence
 of the injury or impairment.
   § 5. Subsection (j) of section 3420 of the insurance law is amended by
 adding a new paragraph 4 to read as follows:
   (4)  THE  TERM "COVERED PERSON" AS USED IN THIS ARTICLE SHALL MEAN ANY
 PEDESTRIAN INJURED THROUGH THE USE OR OPERATION OF, OR ANY OWNER, OPERA-
 TOR OR OCCUPANT OF, A MOTOR VEHICLE WHICH HAS IN  EFFECT  THE  FINANCIAL
 SECURITY REQUIRED BY ARTICLE SIX OR EIGHT OF THE VEHICLE AND TRAFFIC LAW
 OR  WHICH  IS  REFERRED  TO  IN SUBDIVISION TWO OF SECTION THREE HUNDRED
 TWENTY-ONE OF SUCH LAW; OR ANY OTHER  PERSON  ENTITLED  TO  FIRST  PARTY
 BENEFITS.  FOR THE PURPOSES OF THIS ARTICLE, "COVERED PERSON" SHALL ALSO
 INCLUDE ANY PERSON INJURED AS THE RESULT OF A STAGED, PLANNED OR  INTEN-
 TIONAL  ACCIDENT, PROVIDED THAT SUCH PERSON IS NOT A PERPETRATOR OF OR A
 KNOWING PARTICIPANT IN THE STAGING OR PLANNING OF THE ACCIDENT.
   § 6. Section 5202 of the insurance law is  amended  by  adding  a  new
 subsection (m) to read as follows:

 S. 4714                             7
 
   (M)  "COVERED  PERSON" MEANS ANY PEDESTRIAN INJURED THROUGH THE USE OR
 OPERATION OF, OR ANY OWNER, OPERATOR OR OCCUPANT  OF,  A  MOTOR  VEHICLE
 WHICH  HAS  IN  EFFECT THE FINANCIAL SECURITY REQUIRED BY ARTICLE SIX OR
 EIGHT OF THE VEHICLE AND TRAFFIC LAW OR WHICH IS REFERRED TO IN SUBDIVI-
 SION  TWO  OF SECTION THREE HUNDRED TWENTY-ONE OF SUCH LAW; OR ANY OTHER
 PERSON ENTITLED TO FIRST PARTY BENEFITS. FOR THE PURPOSES OF THIS  ARTI-
 CLE,  "COVERED  PERSON"  SHALL  ALSO  INCLUDE  ANY PERSON INJURED AS THE
 RESULT OF A STAGED, PLANNED OR INTENTIONAL ACCIDENT, PROVIDED THAT  SUCH
 PERSON  IS  NOT A PERPETRATOR OF OR A KNOWING PARTICIPANT IN THE STAGING
 OR PLANNING OF THE ACCIDENT.
   § 7. This act shall take effect immediately; provided that:
   (a) section two of this act shall apply to benefits  initiated  on  or
 after  the  one hundred eightieth day after this act shall have become a
 law; and
   (b) sections three, five and six of this act shall take effect on  the
 one hundred eightieth day after it shall have become a law provided that
 the  superintendent  of  financial services shall immediately promulgate
 rules and regulations pursuant to section 5109 of the insurance  law  as
 amended  by  section three of this act and sections five and six of this
 act shall apply to all new policies and policies  that  are  renewed  or
 modified after such one hundred eightieth day.