Relates to insurance companies and car rental steering; prohibits compensation, rebates, discounts, or anything of value in consideration of a referral.
TITLE OF BILL: An act to amend the insurance law, in relation to insurance companies and car rental steering
SUMMARY OF SPECIFIC PROVISIONS:
This bill would require the insurance company, when providing a claimant with a rental vehicle, to provide the claimant with the name and contact information of at least three rental vehicle companies that are located within 30 miles of the location where the insured will use the rental vehicles; if there are not three rental vehicle companies within 30 miles, the insurance company shall provide the name and contact information of as many rental vehicle companies as possible. In addition, the bill would prohibit an insurer from receiving any compensation from a rental vehicle company when the insurer refers a claimant.
Even though the Insurance Law currently prohibits insurers from requiring a consumer to use specific rental vehicle companies, some insurers have found a way around this provision by establishing relationships with large, national rental vehicle companies and then recommending those companies to the consumer. While the consumer can still choose any rental care company, the consumer feels compelled to use the company recommended by the insurer; this arrangement hurts smaller, local businesses that provide vehicle rentals. This bill would address this by requiring insurers to provide consumers with a list of at least three rental vehicle companies.
In addition, while there may be several legitimate reasons why an insurer would recommend a particular rental vehicle company (good customer service, for example), there have been allegations that some insurance companies receive rebates from rental vehicle companies for large numbers of referrals. Referrals should be based upon whether the rental company will be best able to meet the consumer's needs. This bill would address this by prohibiting insurance companies from receiving compensation or rebates from a rental vehicle company in exchange for a referral.
PRIOR LEGISLATIVE HISTORY:
This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 5795 2013-2014 Regular Sessions IN SENATE June 14, 2013 ___________Introduced by Sen. GOLDEN -- 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 insurance companies and car rental steering THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (c) of section 2610-a of the insurance law, as added by chapter 322 of the laws of 2010, is amended and a new subsection (e) is added to read as follows: (c) In processing any such claim, the insurer shall disclose to the insured that the insured has the right, as granted by this section, to utilize any rental vehicle company, rental vehicle company location or a particular concern. IN ADDITION, THE INSURER SHALL PROVIDE THE INSURED WITH A LIST CONTAINING THE NAME AND CONTACT INFORMATION OF NOT LESS THAN THREE RENTAL VEHICLE COMPANIES THAT ARE WITHIN THIRTY MILES OF THE LOCATION WHERE THE INSURED WILL USE THE RENTAL VEHICLE. IF THERE ARE NOT THREE RENTAL VEHICLE COMPANIES LOCATED WITHIN THIRTY MILES OF SUCH LOCATION, THE INSURER SHALL PROVIDE THE NAME AND CONTACT INFORMATION OF AS MANY RENTAL VEHICLE COMPANIES AS POSSIBLE WITHIN THIRTY MILES OF SUCH LOCATION. (E) NO INSURER SHALL RECEIVE ANY COMPENSATION, REBATE, DISCOUNT, OR ANYTHING OF VALUE FROM A RENTAL VEHICLE COMPANY IN CONSIDERATION OF A DIRECT REFERRAL OF A CLAIMANT. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11432-01-3