Assembly Bill A2540

2021-2022 Legislative Session

Provides for liability insurer payment of judgment in excess of policy limits when it fails to fairly settle the claim

download bill text pdf

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Archive: Last Bill Status - In Assembly 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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2021-A2540 (ACTIVE) - Details

See Senate Version of this Bill:
S3551
Current Committee:
Assembly Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §3420, Ins L
Versions Introduced in Other Legislative Sessions:
2015-2016: A9814
2017-2018: A1937, S6556
2019-2020: A917, A5629, S3634
2023-2024: A464, A8920

2021-A2540 (ACTIVE) - Summary

Provides that a liability insurer may be sued for and the plaintiff may recover compensatory damages where the insurer failed to effectuate prompt and fair settlement of the claim and considered its interests to the detriment of the insured so as to cause the rendering of a judgment in excess of the policy limits.

2021-A2540 (ACTIVE) - Bill Text download pdf 

                            
 
                     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

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