Relates to limits on certain supplementary insurance; permits insured to refuse supplementary insurance; requires certain disclaimer.

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S7337-2011 Actions

• May 31, 2012: PRINT NUMBER 7337A
• May 31, 2012: AMEND AND RECOMMIT TO INSURANCE
• May 2, 2012: REFERRED TO INSURANCE

S7337-2011 Memo

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.

S7337-2011 Text

                      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.