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PIANY legislative wrap-upó2012

Resource kit 31059

By Matthew F. Guilbault, Esq.

Having just drawn to a close, New York’s recent legislative session was full of insurance-related proposals, with PIANY fighting hard for its members’ interests in Albany since its beginning in January. Although some of PIANY’s top-priority legislation remains unresolved—such as certificate of insurance legislation—a number of other proposals saw action.

Below are the insurance-related highlights of the 2012 legislative session:

Auto
Increased supplementary insurance limits. A.10784/S.7787 relates to limits on certain supplementary insurance. This bill would provide for increased SUM coverage and to allow the New York State Department of Financial Services’ superintendent to decertify providers of durable medical equipment from providing services under no-fault. Specifically, the bill would require all auto policies to have supplementary uninsured/underinsured motorists coverage in the same amount as the bodily injury limits on the policy, unless the policyholder rejects the coverage. This bill was vetoed by Gov. Cuomo on Dec. 17, 2012.

Homeowners/commercial property
Homeowners hurricane deductible triggers. PIANY through the hard work of staff and members alike, has been pushing hard toward passing legislation (A.3283-A) to standardize homeowners deductible triggers for hurricane windstorms. Right now, a standard definition of the conditions (e.g., amount of rainfall, strength of winds, etc.) that need to occur to trigger a homeowner policy’s windstorm deductible does not exist. So, if two houses on the same street suffer damage in the same storm, there’s a good chance one homeowner may be responsible for paying substantially more out-of-pocket expenses under his or her insurance policy, while the other is not. The bill, due to the tremendous effort of our coastal agents, passed the Assembly on March 29, 2012, and was referred to the Senate Insurance Committee.

Miscellaneous
Risk-based capital for property/casualty insurers. A.10391-A/S.6710-A relates to risk-based capital for property/casualty insurers and reports filed by the DFS superintendent. The bill amends the Insurance Law in relation to risk-based capital for property/casualty insurers and the DFS superintendent’s annual report. This bill was signed into law by Gov. Cuomo as Chapter 173 of Laws of 2012, and became effective immediately.

Pre-need funeral services commissions. S.7490/A.10413 extends provisions of Chapter 557 of the Laws of 2001 relating to pre-need funeral services. This bill extends for five years Chapter 557 of Laws of 2001, which prohibits acceptance of commissions on pre-need funeral insurance. It also requires a study be completed by the DFS no later than three years after the effective date of this chapter. This bill was signed into law on June 29, 2012, by Gov. Cuomo as Chapter 88 of the Laws of 2012. It became effective immediately and was deemed to have been in full force and effect on and after Dec. 12, 2001.

Wage deduction law change. Gov. Cuomo’s Program Bill #49, is an amendment to New York’s wage deduction statute—New York Labor Law Section 193 will permit New York employers to make a wider range of payroll deductions than currently enumerated in Section 193 and will impose several new deduction-related requirements. This bill was signed into law by Gov. Cuomo on Sept. 7, 2012, and became effective Nov. 6, 2012, and shall expire and be deemed repealed three years after it takes effect.

Privacy
Social Security number protection. A.8992-A/S.6608-A restricts the requirement that a person disclose their Social Security number. This law tracks the federal Privacy Act of 1974 with respect to the obligation of a person to disclose their Social Security number to another person, partnership, association or corporation and provides where there is no legal basis for request that a person may refuse to provide his or her Social Security number. The provisions of the law will be subject to enforcement by the attorney general. The bill was signed into law by Gov. Cuomo on Aug. 14, 2012, as Chapter 372 of the Laws of 2012, and became effective 120 days after enactment.

Producer issues
State agency advertisements. A.9034-B/S.6285-A, a PIANY priority bill, would prohibit state agencies, when entering into a contract to disseminate advertising materials through the mail to the public from disseminating materials that relate to the authority, mission or subject matter of the state agency. The proposal successfully passed both houses of the state Legislature in two consecutive sessions; however, it was ultimately vetoed by Gov. Cuomo on Aug. 17, 2012.

Insurance anti-rebating. A.9702/S.6812-A relates to anti-rebating provisions for insurers. This bill would amend existing anti-rebating protection laws to permit property/casualty companies, agents and brokers to provide merchandise with a value up to $25 to an applicant for insurance during the insurance sales process. This bill also removes a current restriction that the merchandise be promotional in nature and would create a cost of living inflation provision that would allow for the periodic adjustment of the monetary amount for the allowable gift of merchandise. This adjustment would be tied to the rate of inflation and the $25 limit could be raised in the future. This bill was signed into law on Aug. 1, 2012, by Gov. Cuomo as Chapter 291 of the Laws of 2012, and became effective immediately.

New insurance license terms. Bill A.6435-A/S.2704-A relates to license terms for new applicants for certain insurance licenses. Under the current law, someone who applies for and gets a new license may have to renew it shortly afterward. This is because licenses issued to individuals expire on that person’s birthday every two years. Therefore, if someone born in October 1986 applies for a license today, that license will have to renew in two months because it will expire on their birthday in an even-numbered year. This bill, which PIANY supported, would allow the Department of Financial Services to issue new agent, broker, excess-line broker, adjuster and consultant licenses for periods of up to 30 months to eliminate this problem for newly licensed producers. This bill was signed into law on Aug. 17, 2012, by Gov. Cuomo as Chapter 442 of the Laws of 2012, and became effective 90 days after signature.

Certificates of insurance. One of the association’s top legislative priorities this year has been S.4425-B/A.6925 which would stop requests for certificates of insurance. PIANY worked throughout the legislative session in negotiations with all interested groups, including commercial lenders and general contractors and we remain committed to continuing our work beyond the legislative session toward passing a law that would prohibit anyone from requesting a certificate unless it is an ACORD, ISO, a company-issued form or a form used in a commercial-lending transaction. On June 21, 2012, this bill was committed to Senate Rules Committee.

Consolidation of banking and insurance departments. A.9820-A/S.6738-A relates to the consolidation of the banking and insurance departments. The law makes technical changes in the various laws that enact the consolidation of the banking and insurance departments into the Department of Financial Services. This bill was signed into law on July 18, 2012, by Gov. Cuomo as Chapter 155 of the Laws of 2012, and became effective upon signature with certain exceptions.

Bills that passed one house of the Legislature
A.3507-A/S.3092-B, which prohibits insurers from refusing to issue or renew, cancel or charge or impose an increased premium for certain policies solely on the breed of dog owned. This bill passed the Assembly and on June 20, 2012, was referred to the Senate Rules Committee.

The Assembly passed A.3729-A/S.7802, which related to continuing education for licensed persons and qualifications for independent adjusters. On June 19, 2012, this bill was referred to the Senate Rules Committee.

The Senate passed S.3057-B/A.4432-C, which establishes the Interstate Insurance Product Regulation Compact to regulate certain insurance products among member states. This bill passed the Senate and on June 19, 2012, was referred to the Assembly Insurance Committee.
 
The Assembly passed A.6177-A, which relates to the crime of insurance fraud. On June 19, 2012, it was delivered to the Senate Rules Committee.
 
The Senate passed S.5573-D/A.8117-D, which authorizes certain organizations in a city of one million people or more to be known as “fire patrols” under the Non-for-Profit Corporation Law. On June 21, 2012, this bill was referred to the Assembly Codes Committee.

The Senate passed S.4950/A.9932, which creates exceptions to the general prohibition on rebating. On June 18, 2012, the bill was delivered to the Assembly Insurance Committee.

The Assembly passed A.10316/S.7562, which relates to the pre-audit of expenditures from the State Insurance Fund by the state comptroller. On June 20, the bill was delivered to the Senate Rules Committee.

The Assembly passed A.10318-A, which relates to deductibles for physical damage insurance. On June 18, 2012, the bill was referred to the Senate Rules Committee.
 
The Senate passed S.5024/A.10537, which relates to replacement of individual life insurance policies or annuity contracts. On June 20, 2012, the bill was delivered to the Assembly Insurance Committee.

The Senate passed S.7745, which establishes protections to prevent surprise medical bills. On June 20, 2012, the bill was delivered to the Assembly Insurance Committee.

The Senate passed S.7746, which permits an insurer to rescind or retroactively cancel a policy in circumstances involving an accident staged to defraud an insurer. On June 20, 2012, the bill was delivered to the Assembly Insurance Committee. 3/13

 


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