The New York State Assembly recently approved a bill (A04458) that would require insurers to expedite claims investigation and settlement processes after declared disasters and emergencies.
Under the legislation, which passed the Assembly on June 17, insurers would be required to advise the claimant in writing within 15 business days of closing the investigation whether the insurer has accepted or rejected the claim. The insurer would be allowed a one-time extension of 15 additional business days, provided that the insurer notifies the claimant of the reasons why more time is needed. Additionally, the insurer would be required to pay the claim within three business days from the settlement of the claim.
Following Superstorm Sandy and Tropical Storms Irene and Lee, it was found that there were often “lengthy delays” in the time it was taking insurers to investigate and process claims and make payments to policyholders, the bill’s memo states. The memo said that in wake of Sandy, the New York State Department of Financial Services found it necessary to issue an emergency regulation in a bid to speed up the claims process.
“This bill would address this issue by requiring insurers to respond to a claim arising from a disaster or emergency in accordance with regulations established by the Superintendent of Financial Services, accept or reject a claim within 15 business days of closing the investigation, and pay a claim within three business days of the claim being settled,” the bill’s memo states. The measure has been referred to the Senate Rules Committee.
Separately, the Assembly also recently approved A04172 that would create a 23-member task force to examine and report on whether policyholders and communities have adequate and reliable insurance coverage in the event of another natural disaster. The task force would study possible ways that insurers can improve service and overall response in order to prepare for future weather events.
A0417 passed the Assembly on June 11 and has been referred to the Senate Rules Committee.
The proposed task force would include: the superintendent of the Department of Financial Services and commissioner of the Department of Homeland Security and Emergency Services; five insurers who write policies that cover loss or damage to property (including at least one insurer who writes for the National Flood insurance Program); five local officers who respond to disasters and emergencies (including representatives from New York City, Long Island, the Hudson Valley, and rural areas of the state that are prone to flooding); two organizations that represent independent and public adjusters; two non-profits that have experience with disaster relief; and two consumer advocacy groups.
The task force would report to the governor, the speaker of the Assembly, the temporary president of the Senate, and the chairs of the Assembly and Senate Insurance Committees one year after the effective date of its authorizing legislation.
The bill states that the report would be required to include the following information:
- Steps insurers currently take in order to respond to disaster-related claims in a timely fashion;
- Challenges insurer experience when responding to disasters;
- Steps insurers currently take to adequately assess damage so that homeowners and municipalities can remove debris and make repairs quickly;
- Additional steps insurers and state and local agencies can take to better respond to the needs of communities and policyholders affected by a disaster;
- Ways insurers assist homeowners and businesses affected by a disaster whose premiums are due;
- Steps insurers can take if their employees are affected by a disaster in order to ensure that they are still able to respond to claims in a timely fashion;
- Whether or not New Yorkers have adequate insurance coverage and if not, identifying what barriers exist that may prevent people from purchasing adequate coverage;
- Identifying measures to encourage homeowners and businesses to purchase flood insurance as needed;
- Steps insurers take to prevent disputes with policyholders and to resolve those which do occur as well as additional steps insurers can take; and
- Legislative actions that can be considered to address such issues.
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