Creates a task force on disasters; provides that such task force shall consist of eighteen members.
TITLE OF BILL: An act to amend the insurance law, in relation to creating a task force on disasters
Purpose Or General Idea Of Bill: The purpose of this bill is to create a task force to examine and report on whether policyholders and communities have adequate insurance coverage and if they are able to rely upon that coverage in the event of a disaster.
Summary Of Specific Provisions: This bill would create a task force to examine how insurers who write policies that cover loss of or damage to real property, personal property, or other liabilities for loss of, damage to, or injury to persons or property in New York State respond to disasters, in what ways state and local agencies such as the Department of Financial Services and the Department of Homeland Security and Emergency Services can assist claimants in connecting with insurance companies, and what steps the industry can take to improve its response in the future.
The task force would consist of 18 members, including the Superintendent of the Department of Financial Services and Commissioner of the Department of Homeland Security and Emergency Services (who shall serve as co-chairs), 5 insurers who write policies that cover loss or damage to property (including at least one insurer who writes for the National Flood insurance Program), 5 local officers who respond to disasters and emergencies (including representatives from New York City, Long Island, the Hudson Valley, and rural areas of the state that are prone to flooding), 2 organizations that represent independent and public adjusters, 2 non-profits that have experience with disaster relief, and 2 consumer advocacy groups.
The task force would report to the Governor, the Speaker of the Assembly, the Temporary President of the Senate, and the Chairs of the Assembly and Senate Insurance Committees one year after the effective date of its authorizing legislation. The report would be required to include information on the challenges that insurers face when responding to a disaster, possible ways for insurers to work with community stakeholders and state agencies to ensure that claims are investigated and processed in a timely fashion, a summary of complaints that policyholders from affected areas have filed with the Department of Financial Services and the final resolution of those complaints, suggested legislation on how to improve the insurance industry's response to disasters, and any other information the Superintendent of the Department of Financial Services and the Commissioner of the Department of Homeland Security and Emergency Services deems relevant.
Justification: Following Superstorm Sandy and Tropical Storms Irene and Lee, it was found that there were lengthy delays in the time it was taking insurance companies to investigate and process claims, conducting site inspections of damaged property, and making payments to policyholders. This was due to the large volume of claims received and obstacles the storms presented to insurance companies, such as washed away roads and displaced policyholders. Such delays made it difficult for homeowners and communities to begin to make repairs and rebuild in a timely fashion and were especially troublesome when
repairs were necessary for the health and safety of individuals and the community.
In addition, disasters have a significant impact upon businesses, especially small businesses. For example, following Sandy, many businesses in downtown Manhattan were unable to open, resulting in not only lost income for the businesses but also lost wages for their employees. This can make it difficult for business owners and individuals to make premium payments, putting them at risk for losing their insurance coverage when they need it the most.
Furthermore, following the storms many policyholders were surprised to learn that they did not have adequate coverage. Many policyholders were unaware that their homeowner's policy did not cover flood damages or, if they were aware, did not purchase a separate flood policy. Policyholders also expressed confusion over what types of damages homeowners and flood policies cover and what the coverage limits were under their policies. As a result, many policyholders received payments that were far less than what they expected to receive.
Because of these issues and the increasing frequency with which the State is seeing destructive storms like Sandy, Irene, and Lee, it is important to examine how the insurance industry responds to disasters and what steps the industry can take to improve its response in the future.
Prior Legislative History: New bill
Fiscal Implications For State: Unknown
Fiscal Implications for Local Governments: Unknown
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 4235 2013-2014 Regular Sessions IN SENATE March 15, 2013 ___________Introduced by Sen. LATIMER -- 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 creating a task force on disasters THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The insurance law is amended by adding a new section 215 to read as follows: S 215. TASK FORCE ON DISASTERS. (A) THERE IS HEREBY CREATED A TASK FORCE TO EXAMINE HOW INSURERS WHO WRITE POLICIES THAT COVER LOSS OF OR DAMAGE TO REAL PROPERTY, PERSONAL PROPERTY, OR OTHER LIABILITIES FOR LOSS OF, DAMAGE TO, OR INJURY TO PERSONS OR PROPERTY IN NEW YORK STATE RESPOND TO DISASTERS, IN WHAT WAYS STATE AND LOCAL AGENCIES SUCH AS THE DEPARTMENT OF FINANCIAL SERVICES AND THE DEPARTMENT OF HOMELAND SECURITY AND EMERGENCY SERVICES CAN ASSIST CLAIMANTS IN CONNECTING WITH INSURANCE COMPANIES, AND WHAT STEPS THE INDUSTRY CAN TAKE TO IMPROVE ITS RESPONSE IN THE FUTURE. THE GOAL OF THE TASK FORCE ON DISASTERS WILL BE TO DETERMINE IF POLICYHOLDERS AND COMMUNITIES HAVE ADEQUATE INSURANCE COVERAGE AND IF THEY ARE ABLE TO RELY UPON THAT COVERAGE IN THE EVENT OF A DISASTER. (B) (1) THE TASK FORCE SHALL CONSIST OF EIGHTEEN MEMBERS, ONE OF WHOM SHALL BE THE SUPERINTENDENT OR HIS OR HER DESIGNATED REPRESENTATIVE, ONE OF WHOM SHALL BE THE COMMISSIONER OF THE DEPARTMENT OF HOMELAND SECURITY AND EMERGENCY SERVICES OR HIS OR HER DESIGNATED REPRESENTATIVE, FOUR OF WHOM SHALL BE APPOINTED BY THE GOVERNOR, FOUR OF WHOM SHALL BE APPOINTED BY THE GOVERNOR BASED UPON THE RECOMMENDATION OF THE SPEAKER OF THE ASSEMBLY, FOUR OF WHOM SHALL BE APPOINTED BY THE GOVERNOR BASED UPON THE RECOMMENDATION OF THE TEMPORARY PRESIDENT OF THE SENATE, TWO OF WHOM SHALL BE APPOINTED BY THE GOVERNOR BASED UPON THE RECOMMENDATION OF THE MINORITY LEADER OF THE ASSEMBLY, AND TWO OF WHOM SHALL BE APPOINTED BYEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05808-02-3 S. 4235 2
THE GOVERNOR BASED UPON THE RECOMMENDATION OF THE MINORITY LEADER OF THE SENATE. (2) THE APPOINTEES SHALL INCLUDE REPRESENTATIVES OF THE FOLLOWING: (A) FIVE INSURERS WHO WRITE POLICIES THAT COVER LOSS OF OR DAMAGE TO REAL PROPERTY, PERSONAL PROPERTY, OR OTHER LIABILITIES FOR LOSS OF, DAMAGE TO, OR INJURY TO PERSONS OR PROPERTY, INCLUDING REPRESENTATIVES FROM COMPANIES OF VARYING SIZES AND LOCATIONS AND AT LEAST ONE INSURER WHO WRITES FOR THE NATIONAL FLOOD INSURANCE PROGRAM. (B) FIVE LOCAL OFFICIALS WHO RESPOND TO DISASTERS AND EMERGENCIES, INCLUDING POLICE OFFICIALS, PROFESSIONAL AND VOLUNTEER FIRE AND EMERGEN- CY SERVICES PERSONNEL, AND LOCAL OFFICIALS RESPONSIBLE FOR THE COORDI- NATION OF EMERGENCY SERVICES AND THE LOCALITY'S RESPONSE TO A DISASTER OR EMERGENCY. THESE APPOINTMENTS SHALL REFLECT THE GEOGRAPHIC DIVERSITY OF THE STATE AND INCLUDE REPRESENTATIVES FROM LOCALITIES WITH VARYING POPULATION DENSITIES. THESE APPOINTMENTS SHALL ALSO INCLUDE REPRESEN- TATIVES FROM NEW YORK CITY, LONG ISLAND, THE HUDSON VALLEY, AND RURAL AREAS OF THE STATE THAT ARE PRONE TO FLOODING. (C) TWO ORGANIZATIONS THAT REPRESENT INDEPENDENT AND PUBLIC ADJUSTERS. (D) TWO NON-PROFITS THAT HAVE EXPERIENCE WITH DISASTER RELIEF. (E) TWO CONSUMER ADVOCACY GROUPS. (3) RECOMMENDATIONS AND APPOINTMENTS SHALL TAKE INTO CONSIDERATION THE EXPERTISE OF OTHER APPOINTEES, SO THAT THE TASK FORCE REFLECTS A DIVER- SITY OF EXPERIENCE. (4) THE MEMBERS OF THE TASK FORCE SHALL NOT RECEIVE COMPENSATION, BUT SHALL BE REIMBURSED FOR REASONABLE TRAVEL EXPENSES. (C) THE SUPERINTENDENT, OR HIS OR HER DESIGNATED REPRESENTATIVE, AND THE COMMISSIONER OF THE DEPARTMENT OF HOMELAND SECURITY AND EMERGENCY SERVICES, OR HIS OR HER DESIGNATED REPRESENTATIVE, SHALL SERVE AS THE CO-CHAIRS OF THE TASK FORCE. (D) THE TASK FORCE SHALL REPORT TO THE GOVERNOR, THE SPEAKER OF THE ASSEMBLY, THE TEMPORARY PRESIDENT OF THE SENATE, AND THE CHAIR OF THE ASSEMBLY INSURANCE COMMITTEE AND THE CHAIR OF THE SENATE INSURANCE COMMITTEE ON THE RESULTS OF ITS EXAMINATION ONE YEAR AFTER THE EFFECTIVE DATE OF THIS SECTION. THE REPORT SHALL INCLUDE INFORMATION ON THE CHAL- LENGES THAT INSURERS FACE WHEN RESPONDING TO A DISASTER, POSSIBLE WAYS FOR INSURERS TO WORK WITH COMMUNITY STAKEHOLDERS AND STATE AGENCIES TO ENSURE THAT CLAIMS ARE INVESTIGATED AND PROCESSED IN A TIMELY FASHION, A SUMMARY OF COMPLAINTS THAT POLICYHOLDERS FROM AFFECTED AREAS HAVE FILED WITH THE DEPARTMENT AND THE FINAL RESOLUTION OF THOSE COMPLAINTS, SUGGESTED LEGISLATION ON HOW TO IMPROVE THE INSURANCE INDUSTRY'S RESPONSE TO DISASTERS, AND ANY OTHER INFORMATION THE SUPERINTENDENT AND THE COMMISSIONERS OF THE DEPARTMENT OF HOMELAND SECURITY AND EMERGENCY SERVICES DEEMS RELEVANT. (E) IN COMPLETING ITS TASK, THE TASK FORCE WILL CONSIDER THE FOLLOWING ISSUES, AS WELL AS ANY OTHER ISSUE THAT IT DEEMS RELEVANT: (1) STEPS INSURERS CURRENTLY TAKE IN ORDER TO RESPOND TO DISASTER-RE- LATED CLAIMS IN A TIMELY FASHION; (2) CHALLENGES INSURERS EXPERIENCE WHEN RESPONDING TO DISASTERS; (3) ADDITIONAL STEPS INSURERS CAN TAKE TO BETTER RESPOND TO THE NEEDS OF COMMUNITIES AND POLICYHOLDERS AFFECTED BY A DISASTER; (4) HOW INSURERS CAN EFFECTIVELY INVESTIGATE CLAIMS AND MAKE PAYMENTS WHEN ENTIRE COMMUNITIES HAVE BEEN WIPED OUT AND PEOPLE HAVE BEEN DISPLACED; (5) WAYS INSURERS CAN PROACTIVELY REACH OUT TO POLICYHOLDERS AND COMMUNITIES FOLLOWING A DISASTER;S. 4235 3
(6) WHETHER OR NOT INSURERS ARE GIVING POLICYHOLDERS ENOUGH TIME TO FILE CLAIMS FOLLOWING A DISASTER; (7) STEPS INSURERS CURRENTLY TAKE TO ADEQUATELY ASSESS DAMAGE SO THAT HOMEOWNERS AND MUNICIPALITIES CAN REMOVE DEBRIS AND MAKE REPAIRS QUICKLY AND ANY ADDITIONAL STEPS INSURERS CAN TAKE; (8) WAYS INSURERS ASSIST HOMEOWNERS AND BUSINESSES AFFECTED BY A DISASTER WHOSE PREMIUMS ARE DUE AND WHETHER THERE IS ADDITIONAL ASSIST- ANCE AVAILABLE TO POLICYHOLDERS; (9) STEPS INSURERS CAN TAKE IF THEIR EMPLOYEES ARE AFFECTED BY A DISASTER IN ORDER TO ENSURE THAT THEY ARE STILL ABLE TO RESPOND TO CLAIMS IN A TIMELY FASHION; (10) WHETHER OR NOT NEW YORKERS HAVE ADEQUATE INSURANCE COVERAGE AND IF NOT, IDENTIFYING WHAT BARRIERS EXIST THAT MAY PREVENT PEOPLE FROM PURCHASING ADEQUATE COVERAGE; (11) STEPS INSURERS TAKE TO PREVENT DISPUTES WITH POLICYHOLDERS AND TO RESOLVE THOSE WHICH DO OCCUR AS WELL AS ADDITIONAL STEPS INSURERS CAN TAKE; (12) LEGISLATIVE ACTIONS THAT CAN BE CONSIDERED TO ADDRESS SUCH ISSUES. S 2. This act shall take effect immediately.