Feb 14, 2019

N.Y. bill round up: standards for equitable payments of insurance commissions, insurance for historical motor vehicles and more

Multiple bills have been introduced in the state Legislature this week that may affect you, your agency and your clients. Three of the bills were introduced by the Chair of the Senate Insurance Committee, Neil Breslin, D-44. The fourth bill was introduced by Assembly Member David DiPietro, R-147.

S.3641 was introduced by Breslin and is a legislative priority for PIANY. This bill would require any carriers, and producers representing them, that utilize the driving history records of insureds as an underwriting or rating factor for personal automobile policies to run motor vehicle reports prior to binding a policy. Currently, carriers are permitted to run driving history record reports at any time, which can change the cost of a policy without a client knowing; this practice is sometimes referred to as bait and switch. In his sponsor’s memo, Breslin noted:

"Consumers should be able to rely on the quotes for insurance policies to be fair and accurate so they can determine whether the coverage is affordable. This practice detracts from that ability and leaves the consumers bound to policies that are much more expensive than originally represented and in some cases, unaffordable. Requiring all carriers to run motor vehicle reports prior to binding coverage would guarantee the consumer will receive a fair and accurate quote prior to committing to the expense."

S.3623, also introduced by Breslin, would establish a standard for prompt, fair and equitable payments of insurance commissions, or other compensation arrangements. Licensed insurance producers have experienced slow payments from health plans and carriers for placement of health insurance coverage, inside and outside the Health Exchange. This bill is modeled on an existing law that requires prompt payment of healthcare providers by health plans after provision of medical or other healthcare services to covered patients, insureds or subscribers (see Insurance Law Section 3224-a).

Two bills also were introduced that are related to exemptions from photo inspections as a prerequisite for obtaining physical damage auto insurance. The first bill, S.3635, introduced by Breslin, relates to creating a limited exception from the requirement for historical motor vehicles. A historical motor vehicle was defined as manufactured more than 25 years ago, or deemed by the New York Department of Motor Vehicles as a vehicle of historical, classic or exhibition value. The second bill, A.5358, introduced by DiPietro, completely removes the requirement and makes it optional for the carrier. As of a regulatory change a few years ago, there currently are certain instances in which a carrier can choose not to use a photo inspection prior to granting physical damage insurance, but they are limited (see QS31396 in the PIA QuickSource library). The current law, put in place over 25 years ago, was written in an effort to reduce fraudulent claims; with modern technology, this is less of a problem. PIANY continues to support repealing this requirement.

PIANY will continue to monitor these bills. Follow their progress using the PIAdvocacy bill tracker.