Relates to limits on certain supplementary insurance; permits insured to refuse supplementary insurance; requires certain disclaimer.
Sponsor: SEWARD INSURANCE
Law Section: Insurance Law
Law: Amd S3420, Ins L
Law Section: Insurance Law
Law: Amd S3420, Ins L
- May 31, 2012: PRINT NUMBER 7337A
- May 31, 2012: AMEND AND RECOMMIT TO INSURANCE
- May 2, 2012: REFERRED TO INSURANCE
BILL NUMBER:S7337 TITLE OF BILL: An act to amend the insurance law, in relation to limits on certain supplementary insurance PURPOSE: Provides that insurance companies must provide motorists with supplementary insurance coverage equal to bodily injury liability coverage, unless the insured specifically accepts lower supplementary insurance coverage in writing. In no event shall supplementary insurance coverage be less than the statutory minimum bodily injury liability insurance limits. SUMMARY OF PROVISIONS: This bill would amend Section 1. Subparagraph (A) of paragraph 2 of subsection (f) of section 3420 of the insurance law as amended by Chapters 547 and 566 of the laws of 1997, to provides that supplementary insurance coverage must equal bodily injury liability insurance limits unless the insured declines such supplementary uninsured/underinsured motorists insurance or selects lower coverage with a written waiver signed by the insured. This bill also prohibits offsetting, by which compensation received from other sources is deducted from the SUM coverage provided to the insured Where an insured is not driving their own vehicle when an accident occurs, and is thus covered by multiple insurance policies, this bill will allow the insured to receive SUM coverage under each policy. JUSTIFICATION: This bill would amend the insurance law in relation to unknowingly waiving supplementary insurance coverage. Supplementary insurance, also known as uninsured or underinsured motorist insurance, protects motorists who suffer severe and devastating injuries in accidents with drivers who carry inadequate or no insurance. Few drivers are aware of the value of supplementary insurance and insurance companies rarely offer supplementary insurance coverage above the statutory minimum. This bill will ensure that drivers are fully protected by supplementary insurance, equal to the bodily injury liability insurance coverage they select unless the� affirmatively elect lower coverage. This bill will also ensure that an insured will receive up to the full amount of SUM coverage they purchase. The practice of offsetting, by which insurance providers deduct from SUM benefits amounts received from other sources, can leave an insured without any SUM coverage despite having paid the appropriate premiums. Similarly, an insured covered by two or more policies can only receive SUM benefits from one of those policies ill the event of an accident. The practice of offsetting allows insurance providers to collect premiums for SUM coverage but avoid paying claims on that coverage in the event of an accident. LEGISLATIVE HISTORY: New bill. FISCAL IMPLICATIONS: None. EFFECTIVE DATE: 30 days after becoming a law.
S T A T E O F N E W Y O R K ________________________________________________________________________ 7337 I N SENATE May 2, 2012 ___________ Introduced by Sen. SEWARD -- 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 limits on certain supplementary insurance THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 2 of subsection (f) of section 3420 of the insur- ance law, as separately amended by chapters 547 and 568 of the laws of 1997, is amended to read as follows:
(2) (A) Any such policy shall[
, at the option of the insured, also] provide supplementary uninsured/underinsured motorists insurance for bodily injury[ , in an amount up to] IN THE SAME AMOUNT AS the bodily injury liability insurance limits of coverage provided under such poli- cy[ , subject to a maximum of two hundred fifty thousand dollars because of bodily injury to or death of one person in any one accident and, subject to such limit for one person, up to five hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, or a combined single limit policy of five hundred thousand dollars because of bodily injury to or death of one or more persons in any one accident. Provided however, an insurer issuing such policy, in lieu of offering to the insured the coverages stated above, may provide supplementary uninsured/underinsured motorists insurance for bodily injury, in an amount up to the bodily injury liability insurance limits of coverage provided under such policy, subject to a maximum of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to such limit for one person, up to three hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, or a combined single limit policy of three hundred thousand dollars because of bodily injury to or death of one or more persons in any one accident, if such insurer also makes available a personal umbrella policy with liability coverage limits up to at least five hundred thousand dollars which also provides coverage for supplementary uninsured/underinsured motorists claims]. THE COVERAGE REQUIRED UNDER THIS PARAGRAPH IS NOT APPLICABLE WHEN, OR TO EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15532-01-2 S. 7337 2 THE EXTENT THAT, AN INSURED NAMED IN THE POLICY MAKES A WRITTEN REJECTION OF THE COVERAGE ON BEHALF OF ALL INSUREDS UNDER THE POLICY, PROVIDED HOWEVER, THAT IN NO EVENT SHALL COVERAGE REQUIRED UNDER THIS SECTION BE LESS THAN THE STATUTORY MINIMUM BODILY INJURY LIABILITY INSURANCE LIMITS. Supplementary uninsured/underinsured motorists insur- ance shall provide coverage, in any state or Canadian province, if the limits of liability under all bodily injury liability bonds and insur- ance policies of [ another] ANY motor vehicle liable for damages are in a lesser amount than the bodily injury liability insurance limits of coverage provided by such policy. Upon written request by any insured covered by supplemental uninsured/underinsured motorists insurance or his duly authorized representative and upon disclosure by the insured of the insured's bodily injury and supplemental uninsured/underinsured motorists insurance coverage limits, the insurer of any other owner or operator of another motor vehicle against which a claim has been made for damages to the insured shall disclose, within forty-five days of the request, the bodily injury liability insurance limits of its coverage provided under the policy or all bodily injury liability bonds. The time of the insured to make any supplementary uninsured/underinsured motorist claim, shall be tolled during the period the insurer of any other owner or operator of another motor vehicle that may be liable for damages to the insured, fails to so disclose its coverage. As a condition precedent to the obligation of the insurer to pay under the supplementary uninsured/underinsured motorists insurance coverage, the limits of liability of [ all] bodily injury liability bonds or insurance policies applicable at the time of the accident shall be exhausted by payment of judgments or settlements. (B) [ In addition to the notice provided, upon issuance of a policy of motor vehicle liability insurance pursuant to regulations promulgated by the superintendent, insurers shall notify insureds, in writing, of the availability of supplementary uninsured/underinsured motorists coverage. Such notification shall contain an explanation of supplementary uninsured/underinsured motorists coverage and the amounts in which it can be purchased. Subsequently, a notification of availability shall be provided at least once a year and may be simplified pursuant to regu- lations promulgated by the superintendent, but must include a concise statement that supplementary uninsured/underinsured motorists coverage is available, an explanation of such coverage, and the coverage limits that can be purchased from the insurer.] THE REJECTION OR SELECTION OF LOWER LIMITS SHALL BE MADE ON A FORM APPROVED BY THE SUPERINTENDENT. THE FORM SHALL FULLY ADVISE THE INSURED OF THE NATURE OF THE COVERAGE AND SHALL STATE THAT THE COVERAGE IS EQUAL TO BODILY INJURY LIABILITY LIMITS UNLESS LOWER LIMITS ARE REQUESTED OR THE COVERAGE IS REJECTED. THE HEAD- ING OF THE FORM SHALL BE IN 12-POINT BOLD TYPE AND SHALL STATE: "YOU ARE ELECTING NOT TO PURCHASE CERTAIN VALUABLE COVERAGE WHICH PROTECTS YOU AND YOUR FAMILY OR YOU ARE PURCHASING UNINSURED MOTORIST LIMITS LESS THAN YOUR BODILY INJURY LIABILITY LIMITS WHEN YOU SIGN THIS FORM. PLEASE READ CAREFULLY." IF THIS FORM IS SIGNED BY A NAMED INSURED, IT WILL BE CONCLUSIVELY PRESUMED THAT THERE WAS AN INFORMED, KNOWING REJECTION OF COVERAGE OR ELECTION OF LOWER LIMITS ON BEHALF OF ALL INSUREDS. THE INSURER SHALL NOTIFY THE NAMED INSURED AT LEAST ANNUALLY OF HER OR HIS OPTIONS AS TO THE COVERAGE REQUIRED BY THIS PARAGRAPH. SUCH NOTICE SHALL BE PART OF, AND ATTACHED TO, THE NOTICE OF PREMIUM, SHALL PROVIDE FOR A MEANS TO ALLOW THE INSURED TO REQUEST SUCH COVERAGE, AND SHALL BE GIVEN IN A MANNER APPROVED BY THE SUPERINTENDENT. IF THE INSURED HAS REJECTED COVERAGE UNDER THIS PARAGRAPH OR HAS SELECTED LOWER LIMITS, THE NOTICE S. 7337 3 OF PREMIUM SHALL CLEARLY INDICATE THE LEVEL OF COVERAGE ACCEPTED. RECEIPT OF THIS NOTICE DOES NOT CONSTITUTE AN AFFIRMATIVE WAIVER OF THE INSURED'S RIGHT TO UNINSURED MOTORIST COVERAGE WHERE THE INSURED HAS NOT SIGNED A SELECTION OR REJECTION FORM. (C)(I) THE AMOUNT OF SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE AVAILABLE UNDER THIS PARAGRAPH SHALL NOT BE REDUCED BY A SETOFF AGAINST ANY COVERAGE, INCLUDING LIABILITY INSURANCE OBTAINED FROM ANY OTHER VEHICLE INVOLVED IN THE ACCIDENT. SUCH COVERAGE SHALL NOT INURE DIRECTLY OR INDIRECTLY TO THE BENEFIT OF ANY WORKERS' COMPENSATION OR DISABILITY BENEFITS CARRIER OR ANY PERSON OR ORGANIZATION QUALIFYING AS A SELF INSURER UNDER ANY WORKERS' COMPENSATION OR DISABILITY BENEFITS LAW OR SIMILAR LAW. (II) THE COVERAGE PROVIDED AS TO TWO OR MORE MOTOR VEHICLES SHALL NOT BE ADDED TOGETHER TO DETERMINE THE LIMIT OF INSURANCE COVERAGE AVAILABLE TO AN INJURED PERSON FOR ANY ONE ACCIDENT, EXCEPT AS PROVIDED IN CLAUSE (IV) OF THIS SUBPARAGRAPH. (III) IF AT THE TIME OF THE ACCIDENT THE INJURED PERSON IS OCCUPYING A MOTOR VEHICLE WHICH IS OWNED BY HIM OR HER OR BY A FAMILY MEMBER RESID- ING WITH HIM OR HER, THE SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE AVAILABLE TO HIM OR HER IS THE COVERAGE AVAILABLE AS TO THAT MOTOR VEHICLE. (IV) IF, AT THE TIME OF THE ACCIDENT, THE INJURED PERSON IS OCCUPYING A MOTOR VEHICLE WHICH IS NOT OWNED BY HIM OR HER OR BY A FAMILY MEMBER RESIDING WITH HIM OR HER, HE OR SHE IS ENTITLED TO THE HIGHEST LIMITS OF SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE AFFORDED FOR ANY ONE VEHICLE AS TO WHICH HE OR SHE IS A NAMED INSURED OR INSURED FAMILY MEMBER. SUCH COVERAGE SHALL BE EXCESS OVER THE COVERAGE ON THE VEHICLE THE INJURED PERSON IS OCCUPYING. (V) IF, AT THE TIME OF THE ACCIDENT, THE INJURED PERSON IS NOT OCCUPY- ING A MOTOR VEHICLE, HE OR SHE IS ENTITLED TO SELECT ANY ONE LIMIT OF SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE FOR ANY ONE VEHICLE AFFORDED BY A POLICY UNDER WHICH HE OR SHE IS INSURED AS A NAMED INSURED OR AS AN INSURED RESIDENT OF THE NAMED INSURED'S HOUSEHOLD. S 2. This act shall take effect on the thirtieth day after it shall have become a law, and shall apply to insurance policies and contracts issued, entered into or renewed on and after such effective date.