The Professional Insurance Agents of New York State Inc. issued a bulletin praising legislators efforts in passing S4633, which goes into effect in the middle of February 2004. The measure assures that policyholders and their agents will get copies of important notices affecting their coverage, including the amount due on nonpayment cancellation notices.
“PIANY requested the legislation, which was passed in the Senate and Assembly in June and was forwarded to the governor Oct. 3, to be signed into law,” said the announcement. “The proposal met with bipartisan support. Sen. Charles J. Fuschillo Jr. (R-C, Farmingdale), chairman of the Senate Consumer Protection Committee, agreed to sponsor the bill. In the Assembly, the measure was sponsored by Ivan C. Lafayette (D-L-WF, Jackson Heights), long-time member of the Assembly Insurance Committee.”
PIANY President T.J. Derella CPIA noted: “This law closes loopholes companies can take advantage of to terminate coverage. We applaud the governor for taking action to protect the insurance-buying public.”
The law requires companies to provide notice to agents and brokers when personal lines policies are being cancelled, nonrenewed, conditionally renewed or altered mid-term, and requires property-casualty nonpayment cancellation notices to show the amount due.
“As ombudsmen for our customers, we cannot emphasize enough the importance of notifying both policyholders and their insurance producers of insurers’ intentions,” Derella continued. “Moreover unless a notice of cancellation for nonpayment tells clients how much they owe, they may not be able to pay the correct amount in time to avoid the cancellation. Both of these changes are needed to reduce unnecessary cancellation of insurance. In today’s difficult market conditions, a cancellation can mean a company will refuse to reinstate coverage and the policyholder can be left searching for another insurer. That’s a difficult and expensive task nowadays.”
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