S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3590
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 1, 2023
                                ___________
 
 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 2023"
 
   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 2023".
   § 2. Section 5106 of the insurance law, subsection (b) as  amended  by
 chapter  452 of the laws of 2005, subsection (d) as amended by section 8
 of part AAA of chapter 59 of the  laws  of  2017,  and  paragraph  2  of
 subsection (d) as amended by chapter 129 of the laws of 2022, 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08593-01-3
              

 S. 3590                             2
 
 SECTION  FIVE  THOUSAND  ONE  HUNDRED  EIGHT OF THIS ARTICLE; OR (C) THE
 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. 3590                             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. 3590                             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  or  three  thousand  four  hundred  fifty-eight,  AS
 AMENDED  BY  CHAPTER ONE HUNDRED TWENTY-NINE OF THE LAWS OF TWO THOUSAND
 TWENTY-TWO, 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 or  peer-to-
 peer  car  sharing program when loss, damage, injury, or death occurs. A
 transportation network  company  or  peer-to-peer  car  sharing  program
 administrator 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 insur-
 er 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 insur-
 er  or  in  the  case  of a peer-to-peer car sharing program, the shared
 vehicle owner'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 THOU-
 SAND 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
 S. 3590                             5

 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
 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
 S. 3590                             6
 
 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.
   (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-
 S. 3590                             7
 
 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:
   (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  promul-
 gate 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.