Enacts the "insurance modernization act of 2014" which relates to permitting all forms of signatures for continuing insurance education course providers; relates to expanding immunity protection for companies reporting certain fire losses; relates to allowing advance premium cooperative investment in certificates of deposit.
Ayes (57): Addabbo, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Dilan, Espaillat, Farley, Felder, Flanagan, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Hoylman, Kennedy, Klein, Lanza, Larkin, Latimer, LaValle, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Sanders, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousins, Tkaczyk, Valesky, Young, Zeldin
Nays (1): Krueger
Excused (3): Boyle, Diaz, Libous
TITLE OF BILL: An act to amend the insurance law, in relation to enacting the "insurance modernization act of 2014"
PURPOSE: There are three areas of the insurance law where the current law does not accurately reflect the realities of insurance operations. First, with the advent of electronic signatures and the ubiquitous nature of faxed or scanned documents with copies of signatures, the current Department of Financial Services' (DFS) requirement that applications by continuing insurance education providers must have original signatures is anachronistic. This bill would permit both original signatures and copies of signatures.
Second, insurance companies providing information regarding certain fire claim losses are immunized from liability for providing such information to the New York City fire agency but not any other local fire agency in the state. This measure corrects that by amending the law to include any local fire agency within the law's definition of a local fire agency for purposes of such reporting.
Third, current law through an oversight does not expressly include advance premium cooperatives as a type of cooperative allowed to invest in certificates of deposit in a certain manner that is presently allowed for assessment cooperatives. This bill would correct this oversight by stating that all co-operative property/casualty insurance companies may invest in certificates of deposit under this applicable section of law.
SUMMARY OF PROVISIONS:
Section 1 and 2 of the bill provide for the title and legislative intent.
Section 3. Amend Insurance Law section 2132 (i) (3) by stipulating that a continuing education course provider under the insurance law may satisfy signature requirements through compliance with New York General Construction Law section 46, Signature.
Section 4. Insurance Law section 3432 (b) (6) is amended by including a local fire investigation agency of any municipal corporation in the state within the clause providing immunity for a property/casualty insurance company's report of a fire claim loss.
Section 5. Amends Insurance Law section 6623 (c) to delete the words "an assessment corporation" and replace them with the words "a co-operative property/casualty insurance company".
Section 6. Effective date is immediately upon enactment.
JUSTIFICATION: DFS currently requires continuing education course providers to submit all documents with original, or "wet", signatures. Modern technology with its extensive use of faxed documents, scanned documents and even electronic signatures has overtaken the anachronistic practice of obtaining original signatures in all cases. In fact, DFS's predecessor agency, the Department of Insurance, opined in a 2007 office of general counsel opinion (Opinion No. 07-02-11)
that an insurance producer may use a stamped signature on an application for group insurance. Furthermore, New York has the Electronic Signatures and Records Act (New York Technology Law sections 101-109), which authorizes the use and acceptance of electronic signatures in commercial transactions throughout New York state. This bill would modernize DFS's practices regarding signatures submitted by continuing education providers by allowing a copy of a signature or an electronic signature, as well as an original signature, on documents submitted by such providers.
Insurance Law sections 3415 and 3432 created a reporting system for reporting fire loss claims in excess of $10,000 in order to provide more information for arson investigations and insurance fraud investigators. An insurer submitting the required report to a "local fire investigation agency" (defined in law as the fire investigation agency for New York City) is immune from liability for the information they provided so long as they did not act fraudulently or in bad faith. Unfortunately, this immunity does not extend to such reports made by insurers to fire investigation agencies outside of New York City. Fundamental fairness dictates that the public policy reasons for this immunity similarly apply to reports made to non-New York City fire investigation agencies. Accordingly, this legislation extends the current immunity to reports made to any local fire investigation agency in New York State.
One of the chapter laws of 2000 amended Insurance Law section 6623 to allow assessment corporations, one of the two types of cooperative insurance companies in New York with the other one being advance premium corporations, to invest in certificates of deposit (CDs) with any one institution in an amount not to exceed the amount guaranteed by the Federal Deposit Insurance Corporation (FDIC). The impetus for this change was the prohibition, prior to this 2000 law, on cooperative insurers investing more than 10% of their admitted assets in any one financial institution. According to the sponsor memorandum for the 2000 law, the change in the statute was necessitated by the fact that assessment corporations are often located in small, rural areas with few investment opportunities. Since this fact also exists for many advance premium corporations, they should similarly be included within this authorization to invest in certificates of deposit. This measure would resolve that inequity by including advance premium corporations under the section of law authorizing investments in CDs.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 6526--A Cal. No. 241 IN SENATE February 3, 2014 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the insurance law, in relation to enacting the "insur- ance modernization act of 2014" THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act shall be known, and may be cited as, the "insur- ance modernization act of 2014." S 2. The legislature finds and declares that there is a need for modernizing three discrete provisions of the insurance law in order to streamline the conduct of the business of insurance in New York. The "insurance modernization act of 2014" would permit all forms of signa- tures for continuing insurance education course providers, expand immu- nity protection for companies reporting certain fire losses and allow advance premium cooperative investment in certificates of deposit. S 3. Paragraph 3 of subsection (i) of section 2132 of the insurance law, as added by chapter 656 of the laws of 1992, is amended to read as follows: (3) The completed applications shall be returned in a timely manner, as specified by the superintendent, PROVIDED THAT ANY SIGNATURE REQUIRE- MENTS SHALL BE DEEMED SATISFIED IF THE SIGNATURES COMPLY WITH SECTION FORTY-SIX OF THE GENERAL CONSTRUCTION LAW, with a non-refundable filing fee of two hundred dollars per organization, fifty dollars per course, program and seminar, and fifty dollars per instructor. S 4. Paragraph 6 of subsection (b) of section 3432 of the insurance law, as added by chapter 778 of the laws of 1986, is amended to read as follows: (6) information required by the insurer or provided by the insurer in the absence of fraud or bad faith to a local fire investigation agency
[pursuant to section three thousand four hundred fifteen of this arti-OF A "MUNICIPAL CORPORATION" AS DEFINED IN SECTION TWO OF THE GENERAL MUNICIPAL LAW. S 5. Subsection (c) of section 6623 of the insurance law, as added by chapter 431 of the laws of 2000, is amended to read as follows: (c) Notwithstanding the limitation of investments in certificates of deposit set forth in subsection (a) of section one thousand four hundred nine of this chapter,EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13788-02-4 S. 6526--A 2
[an assessment corporation]A CO-OPERATIVE PROPERTY/CASUALTY INSURANCE COMPANY may invest in certificates of depos- it of any one institution in an amount not to exceed the amount guaran- teed by the Federal Deposit Insurance Corporation. S 6. This act shall take effect immediately.