Bill S413-2009

Establishes the consumer advocate insurance commission

Establishes the consumer advocate insurance commission to use insurance data submitted by insurance companies and health maintenance organizations to support sound policy decisions that protect the consumer.

Details

Actions

  • Jan 6, 2010: REFERRED TO CONSUMER PROTECTION
  • Jan 7, 2009: REFERRED TO CONSUMER PROTECTION

Memo

 BILL NUMBER:  S413

TITLE OF BILL :

An act establishing the consumer advocate insurance commission

PURPOSE :

The purpose of this bill is to ensure that insurance consumers in New York State have an institutional advocate to act on their behalf.

SUMMARY OF PROVISIONS :

Section 1. Establishes the legislative intent of the bill to create a Consumer Advocate Insurance Commission to ensure accurate resources are available to all consumers through the presence of members who will have experience in the insurance industry. This section ensures that the Commission will promote markets where competition is not present and will exercise its regulatory authority judiciously to ensure equitable rates and superior service.

Section 2. Provides the conditions of the Consumer Advocate Insurance Commission such that, the Commission shall consist of five members, to be appointed by the Governor, with the advice and consent of the Senate and Assembly. One member will be designated as the Chair at the pleasure of the Governor.

Section 3. Provides for staggered terms for five years for the members which will be determined by the Governor. This section also mandates that members of the Commission will receive no compensation for their services, but will reimburse members for actual and necessary expenses incurred in the performance of their duties. Requires the Commission to utilize insurance data submitted by insurance companies and health maintenance companies to protect the consumer and to post complete annual statements in regard to rate changes on their web site free of charge This section also mandates that the Commission provides the following services: determine whether insurance rates charged are reasonable; identity false claims of insurance companies and insurance regulators; analyze the impact of insurance law changes and regulations; review individual insurers and industry wide profitability by company and by type of insurance coverage in relation to claims for higher rates or less regulation; analyze insurance availability and redlining; track services in insurance markets. This bill will also stipulate that public hearings be held quarterly to provide information on any changes that may affect insurance rate increases and any new legislation that may provide detrimental to consumers. Lastly, this provides that the Commission publish a handbook that will be available to all consumers which provide information on the following insurance data and rate making, glossary of insurance data terms, information on insurance sales and service.

JUSTIFICATION :

Insurance companies, health maintenance organizations and their lobbyists deluge consumers and the media with broad generalizations about insurance that is often designed to promote rate increases. The ideas float in a sea of numbers that can drown out opposing views and ultimately negatively impact consumers. It is clear that consumers in New York State need to have an institutional advocate to act on their behalf. It is important for the New York State legislature to create a Consumer Advocate Insurance Commission. The Consumer Advocate Insurance Commission will use insurance data submitted by insurance companies to support sound policy proposals that will protect the consumer. This Commission of trained professionals will be able to quickly identify and rebut the misuse of insurance industry data by industry lobbyists, a powerful tool during negotiations over rates (and legislation). The establishment of the Consumer Advocate Insurance Commission will ensure accurate resources are available to all consumers. This will be competed through posting complete annual statements in regards to rate and legislative changes on their web site free of charge, providing such services but not limited to determining whether insurance rates charged are reasonable, and analyzing the impact of insurance law changes and regulations. The Commission will also hold quarterly public hearings to provide information on any changes that may affect insurance rate increases and on any new legislation that may prove detrimental to consumers.

LEGISLATIVE HISTORY :

2007/2008 - S.6073 Remained in the Senate Committee on Consumer Protection

FISCAL IMPLICATIONS :

To be determined.

EFFECTIVE DATE : This act shall take effect on the one hundred twentieth day after it has become a law.

Text

STATE OF NEW YORK ________________________________________________________________________ 413 2009-2010 Regular Sessions IN SENATE (PREFILED) January 7, 2009 ___________
Introduced by Sens. BRESLIN, DIAZ, DUANE, HUNTLEY, C. JOHNSON, KRUGER, MONTGOMERY, PERKINS, SCHNEIDERMAN, SMITH, STACHOWSKI, STAVISKY, STEWART-COUSINS -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection AN ACT establishing the consumer advocate insurance commission THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Legislative intent. Consumers in New York state need to have an institutional advocate to act on their behalf. It is important for the New York state legislature to create a consumer advocate insur- ance commission to ensure accurate resources are available to all consumers. The consumer advocate insurance commission shall consist of individuals who have had experience and can provide expertise in the insurance industry, including individuals from the private sector who are interested in a public focus. The consumer advocate insurance commission will promote markets and where competition is not present, the commission will exercise its regu- latory authority judiciously to ensure equitable rates and superior service. Insurance companies, health maintenance organizations and their repre- sentatives deluge consumers and the media with broad generalizations about insurance that are often designed to promote rate increases. The ideas float in a sea of numbers that can drown out opposing views and ultimately negatively impact consumers, unless consumers learn to under- stand insurance data for themselves. S 2. Consumer advocate insurance commission. 1. There is hereby estab- lished the consumer advocate insurance commission hereinafter "commis- sion". The commission shall consist of five members, to be appointed by the governor, by and with the advice and consent of the senate. The governor shall designate one of the members of the commission as chair
to serve in such capacity at the pleasure of the governor or until the member's term of office expires and a successor is appointed, whichever occurs first. The term of office of a member shall be five years, but in the first instance such members shall be appointed to hold office, one for one year, one for two years, one for three years, one for four years and one for five years, the term to be fixed by the governor in making the original appointment. Upon resignation of a member, or a vacancy occurring in any other manner, it shall be filled by appointment for the unexpired term. Three members shall constitute a quorum for the trans- action of business. Members of the commission shall receive no compen- sation for their services, but shall be reimbursed for actual and neces- sary expenses incurred in the performance of their duties. 2. The commission shall use insurance data submitted by insurance companies and health maintenance organizations to support sound policy decisions that protect the consumer. The commission shall consist of trained professionals who should be able to quickly identify and rebut the misuse of insurance industry data by representatives of the insur- ance industry that is often used as a tool during negotiations over rates and proposed legislation. The commission shall post complete annu- al statements in regards to rate and legislative changes on their web site free of charge. 3. The commission shall provide the following services: a. determine whether insurance rates charged are reasonable; b. identify false claims of insurance companies, insurance regulators and health maintenance organizations; c. analyze the impact of insurance law changes and regulations; d. review individual insurer and industry-wide profitability by compa- ny and health maintenance organization and by type of insurance coverage in relation to claims for higher rates or less regulation; e. analyze insurance availability and redlining to assist insurers in documenting their efforts to increase insurance availability in under- served areas; and f. track services in insurance markets. 4. The commission shall hold public hearings quarterly to provide information on any changes that may affect insurance rate increases and on any new legislation that may prove detrimental to consumers. Such public hearings will allow increased public participation which will result in improved credibility in the regulation and accountability of the insurance industry. 5. The commission shall publish a handbook that will be available to all consumers. The handbook shall provide an introduction to the topic of insurance data and rate making, and shall include a glossary of insurance data terms. The handbook shall also provide information on insurance sales and markets and should serve as a tool kit for consumers by discussing the sources, use and misuses of insurance data. S 3. This act shall take effect on the one hundred twentieth day after it shall have become a law.

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