The Professional Insurance Agents of New York State Inc. noted that as of Feb. 12 a new law comes into effect in New York that will give greater protection to the state’s insurance-buying consumers, who can be “assured that their insurance agents will be notified of important developments affecting their coverage,” as well as receiving a clear statement of the amount due on nonpayment cancellation notices.
New York’s Senate and Assembly passed the new law, formerly S.4633, conceived and proposed by the PIANY, in June 2003. Governor Pataki signed it in October. The measure had bipartisan support in the legislature, sponsored by Sen. Charles J. Fuschillo Jr., R-C, Farmingdale, chairman of the Senate Consumer Protection Committee and by Ivan C. Lafayette, D-L-WF, Jackson Heights, in the Assembly.
The PIANY bulletin noted that the law requires “insurance companies to provide notice to agents and brokers when their clients’ personal lines policies, such as auto or homeowners, are being canceled, nonrenewed, renewed only if the customer accepts certain changes, or altered mid-term. Additionally, for all property/casualty policies, including business coverage, the law requires nonpayment cancellation notices to show the amount due.”
“Faced with 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,” commented PIANY President T.J. Derella, CPIA. “That’s a difficult and expensive task nowadays.”
The PIANY said the legislation was needed to “close loopholes that could lead companies to terminate a policyholder’s coverage needlessly.” Derella noted: “Policyholders need to be sure that their agents are notified of a company’s intentions to terminate or change coverage, so the agent can help them remain properly insured. 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. We sought both of these changes to reduce unnecessary lapses in our customers’ policies, and we applaud the sponsors, the legislature and the governor for taking action.”
Topics Agencies Legislation New York
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