Bill S4654-2011

Prohibits discrimination in the issuance of homeowner's insurance policies and clarifies prohibition of refusal to issue policies based solely on geographical location

Prohibits discrimination in the issuance of homeowner's insurance policies based upon the subject property's location; makes various provisions clarifying prohibition on refusal to issue or renew certain policies including homeowner's fire and extended coverage based solely on geographical location.

Details

Actions

  • Jan 4, 2012: REFERRED TO INSURANCE
  • Apr 14, 2011: REFERRED TO INSURANCE

Memo

BILL NUMBER:S4654

TITLE OF BILL:

An act to amend the insurance law, in relation to prohibiting discrimination in the issuance or renewal of homeowner's insurance policies and to the geographical location of risk of certain policies

PURPOSE OR GENERAL IDEA OF BILL:

Prohibits discrimination in the issuance and renewal of homeowner's insurance policies based on the geographic location of the risk or property.

SUMMARY OF SPECIFIC PROVISIONS:,

Section 3429 of the insurance law is amended to include homeowner's insurance in the list of insurance categories said section applies to. Subdivision (a) of section 3429 of the insurance law is amended to add rejection of an application and limiting the type or amount of coverage offered as actions that are prohibited with regard to discrimination based on geographic location of a risk or property. Part 2 of subdivision (a) of section 3429 is amended to include protection against discrimination based on property location and to allow an insurer to reject an application based on geographic location only when there is unreasonable distance of a risk or property from the insurer's ordinary service area. Subdivision 1 of section 3433 of the insurance law is amended to include homeowner's insurance in the categories of insurance for which the agents or brokers may not have their contracts or accounts terminated or not renewed based on their geographical location or the geographical location of the risks for which coverage is afforded. Subdivision 2 of section 3433 of the insurance law is amended to include geographic location of a risk as a basis of discrimination that is prohibited with respect to terminating or not renewing the contract or account of a broker or agent.

JUSTIFICATION:

In light of a move on the part of Allstate Insurance Company to cease offering insurance only on Long Island, New York City, and Westchester County, the insurance law must be changed before other companies follow suit. Insurance companies that do business in our State should not have the option to pick and choose which areas they will do business with. As the number of insurance companies writing in these areas decreases, the cost of homeowner's insurance will skyrocket and protecting our homes will become a luxury few could afford.

PRIOR LEGISLATIVE HISTORY:

2009-10: A.2101/S.8238 - Reported Referred to Assembly Codes Committee 2007-08: A.1508 - Held for consideration in Insurance 2005-06: A.9783 - Held for consideration in Insurance

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect on the thirtieth day after it shall have become a law and shall apply to all contract and policies of insurance issued or renewed on and after such date.


Text

STATE OF NEW YORK ________________________________________________________________________ 4654 2011-2012 Regular Sessions IN SENATE April 14, 2011 ___________
Introduced by Sen. ZELDIN -- 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 prohibiting discrimi- nation in the issuance or renewal of homeowner's insurance policies and to the geographical location of risk of certain policies THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 3429 of the insurance law is amended to read as follows: S 3429. Geographical location of risks; HOMEOWNERS'; fire, fire and extended coverage policies; private passenger automobile insurance poli- cies. (a) No insurer shall REJECT ANY APPLICATION FOR, refuse to issue or renew, LIMIT THE TYPE OR AMOUNT OF COVERAGE OFFERED or shall cancel a policy of: (1) HOMEOWNERS' INSURANCE, fire insurance or fire and extended cover- age insurance, or (2) automobile insurance subject to section three thousand four hundred twenty-five of this article based solely on the geographical location of the risk OR PROPERTY within this state. Such prohibition shall not preclude an insurer from REJECT- ING AN APPLICATION FOR SUCH COVERAGE BASED ON THE UNREASONABLE DISTANCE OF THE RISK OR PROPERTY FROM THE INSURER'S ORDINARY SERVICE AREA, OR FROM refusing to issue or renew, LIMITING THE TYPE OR AMOUNT OF COVERAGE OFFERED or from cancelling such policies [based on sound underwriting and actuarial principles] reasonably related to actual or anticipated loss experience subject to the applicable provisions of section three thousand four hundred twenty-five of this article. (b) The superintendent shall by regulation establish procedures with respect to notification to insureds of the insurer's specific reason or reasons for refusal to issue or renew or for cancellation of such poli- cy.
S 2. Section 3433 of the insurance law is amended to read as follows: S 3433. Termination of contracts or accounts of licensed agents or brokers; prohibition; geographical location. (a) No insurer shall termi- nate or refuse to renew a contract or account of a licensed agent or broker who negotiated policies of: (1) HOMEOWNERS' INSURANCE, fire insurance or fire and extended cover- age insurance or (2) automobile insurance subject to section three thousand four hundred twenty-five of this article when such termination or refusal to renew is based solely on the geographical location of the agent or broker or GEOGRAPHICAL LOCATION of the risks for which coverage is afforded through such agent or broker. (b) The superintendent shall by regulation establish procedures requiring notification to such agents or brokers of the insurer's specific reason or reasons for termination or refusal to renew the agent's or broker's contract or account. S 3. This act shall take effect on the thirtieth day after it shall have become a law and shall apply to all contracts and policies of insurance issued or renewed on and after such date.

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