Relates to limits on certain supplementary insurance; requires notice of procedures for rejecting supplementary uninsured/underinsured motorists coverage.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5445A
SPONSOR: Morelle (MS) TITLE OF BILL:
An act to amend the insurance law, in relation to limits on certain
supplementary insurance
PURPOSE:
The purpose of this bill is to make certain that auto insurance consum-
ers are made aware of the benefits of supplementary uninsured/under
motorists (SUM) coverage and to provide these consumers with the option
of declining such coverage.
SUMMARY OF PROVISIONS:
This bill would require that the amount of supplementary
uninsured/underinsured motorist (SUM) coverage that insurance carriers
must make available to consumers is equal to the bodily injury limits on
a policy, removing a $250,000 cap on required coverage. In addition,
this bill would require that, at the time a policy is purchased, consum-
ers be offered a choice of: 1) Declining SUM coverage equal to the level
of bodily injury limits on the policy; 2) Purchasing SUM coverage at
limits less than bodily injury limits on the policy; or 3) Declining SUM
coverage that is in addition to the statutory minimum. To ensure that
the consumer has adequate information to make an informed choice, the
insurer or agent would be required to disclose to the consumer what SUM
coverage is and what premiums would apply at each level of coverage.
JUSTIFICATION:
Supplementary insurance, also known as uninsured or underinsured motor-
ist insurance, protects motorists who suffer severe and devastating
injuries in accidents with drivers who carry inadequate or no insurance.
Few drivers are aware of the value of supplementary insurance and insur-
ance companies rarely offer supplementary insurance coverage above the
statutory minimum. This bill will ensure that drivers are informed of
the availability of SUM coverage and can affirmatively elect the cover-
age that best meets their needs.
LEGISLATIVE HISTORY:
A6727 of 2013/2014 - referred to insurance, reported to Rules
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act will take effect on the 180th day after it shall have become a
law.
STATE OF NEW YORK
________________________________________________________________________
5445--A
Cal. No. 221
2017-2018 Regular Sessions
IN ASSEMBLY
February 9, 2017
___________
Introduced by M. of A. MORELLE, PEOPLES-STOKES, ZEBROWSKI, STIRPE, HOOP-
ER, WEPRIN, MOSLEY, ARROYO, ROSENTHAL, SKOUFIS, LIFTON, BRINDISI,
BRONSON, AUBRY, M. G. MILLER, JENNE, LUPARDO, WALKER, GALEF, PAULIN,
SANTABARBARA -- Multi-Sponsored by -- M. of A. GRAF, LUPINACCI, RAIA
-- read once and referred to the Committee on Insurance -- reported
from committee, advanced to a third reading, amended and ordered
reprinted, retaining its place on the order of third reading
AN ACT to amend the insurance law, in relation to limits on certain
supplementary insurance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 2 of subsection (f) of section 3420 of the insur-
2 ance law, as separately amended by chapters 547 and 568 of the laws of
3 1997, is amended to read as follows:
4 (2) (A) Any such policy shall, at the option of the insured, also
5 provide supplementary uninsured/underinsured motorists insurance for
6 bodily injury, in an amount up to the bodily injury liability insurance
7 limits of coverage provided under such policy[, subject to a maximum of
8 two hundred fifty thousand dollars because of bodily injury to or death
9 of one person in any one accident and, subject to such limit for one
10 person, up to five hundred thousand dollars because of bodily injury to
11 or death of two or more persons in any one accident, or a combined
12 single limit policy of five hundred thousand dollars because of bodily
13 injury to or death of one or more persons in any one accident. Provided
14 however, an insurer issuing such policy, in lieu of offering to the
15 insured the coverages stated above, may provide supplementary
16 uninsured/underinsured motorists insurance for bodily injury, in an
17 amount up to the bodily injury liability insurance limits of coverage
18 provided under such policy, subject to a maximum of one hundred thousand
19 dollars because of bodily injury to or death of one person in any one
20 accident and, subject to such limit for one person, up to three hundred
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04852-03-7
A. 5445--A 2
1 thousand dollars because of bodily injury to or death of two or more
2 persons in any one accident, or a combined single limit policy of three
3 hundred thousand dollars because of bodily injury to or death of one or
4 more persons in any one accident, if such insurer also makes available a
5 personal umbrella policy with liability coverage limits up to at least
6 five hundred thousand dollars which also provides coverage for supple-
7 mentary uninsured/underinsured motorists claims]; provided, however,
8 that any insured may exercise the choice to decline such supplementary
9 uninsured/underinsured motorists insurance or select a lower amount of
10 coverage through a written waiver signed, or electronically signed, by
11 such insured, subject to the requirements of subparagraph (B) of this
12 paragraph. Supplementary uninsured/underinsured motorists insurance
13 shall provide coverage, in any state or Canadian province, if the limits
14 of liability under all bodily injury liability bonds and insurance poli-
15 cies of [another] any other motor vehicle liable for damages are in a
16 lesser amount than the bodily injury liability insurance limits of
17 coverage provided by such policy. Upon written request by any insured
18 covered by supplemental uninsured/underinsured motorists insurance or
19 his duly authorized representative and upon disclosure by the insured of
20 the insured's bodily injury and supplemental uninsured/underinsured
21 motorists insurance coverage limits, the insurer of any other owner or
22 operator of another motor vehicle against which a claim has been made
23 for damages to the insured shall disclose, within forty-five days of the
24 request, the bodily injury liability insurance limits of its coverage
25 provided under the policy or all bodily injury liability bonds. The time
26 of the insured to make any supplementary uninsured/underinsured motorist
27 claim, shall be tolled during the period the insurer of any other owner
28 or operator of another motor vehicle that may be liable for damages to
29 the insured, fails to so disclose its coverage. As a condition precedent
30 to the obligation of the insurer to pay under the supplementary
31 uninsured/underinsured motorists insurance coverage, the limits of
32 liability of all bodily injury liability bonds or insurance policies
33 applicable at the time of the accident shall be exhausted by payment of
34 judgments or settlements.
35 (B) [In addition to the notice provided, upon issuance of a policy of
36 motor vehicle liability insurance pursuant to regulations promulgated by
37 the superintendent, insurers shall notify insureds, in writing, of the
38 availability of supplementary uninsured/underinsured motorists coverage.
39 Such notification shall contain an explanation of supplementary
40 uninsured/underinsured motorists coverage and the amounts in which it
41 can be purchased. Subsequently, a notification of availability shall be
42 provided at least once a year and may be simplified pursuant to regu-
43 lations promulgated by the superintendent, but must include a concise
44 statement that supplementary uninsured/underinsured motorists coverage
45 is available, an explanation of such coverage, and the coverage limits
46 that can be purchased from the insurer.] The selection of lower supple-
47 mentary uninsured/underinsured motorists coverage or rejection of such
48 coverage must be made on a written or electronic form provided to the
49 insured at the time the policy is sold, purchased or negotiated. Such
50 form shall advise the insured of the amount of the premium attributed to
51 supplementary uninsured/underinsured motorists coverage as required by
52 this paragraph. Such form shall also advise that such coverage is equal
53 to the insured's bodily injury liability limits unless lower limits are
54 requested or the coverage is rejected.
55 (i) The form shall be in at least 12-point bold type and shall state:
56 "SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE (SUM COVERAGE)
A. 5445--A 3
1 PROVIDES INSURANCE PROTECTION FOR ANY PERSON INCLUDED AS INSURED UNDER
2 YOUR POLICY IF HE OR SHE IS INJURED IN AN ACCIDENT INVOLVING ANOTHER
3 MOTOR VEHICLE WHOSE OWNER OR OPERATOR WAS NEGLIGENT BUT WHO HAS EITHER
4 NO BODILY INJURY OR LIABILITY INSURANCE, OR LESS THAN THE INSURANCE YOU
5 CARRY. SUM COVERAGE SHALL BE EQUAL TO THE LEVEL OF THE BODILY INJURY
6 LIABILITY COVERAGE OF YOUR POLICY UNLESS YOU SIGN A WAIVER REQUESTING
7 LOWER COVERAGE OR DECLINING THE COVERAGE. YOU ARE URGED TO CAREFULLY
8 CONSIDER THIS DECISION."
9 (ii) If an insured rejects such coverage or selects coverage at a
10 lower limit, the insurer shall notify the named insured at least annual-
11 ly of his or her options as to the coverage required by this paragraph
12 pursuant to regulations issued by the superintendent, if any, at the
13 time of or within sixty days prior to the renewal of the policy, or at
14 least annually for multi-year policies. Receipt of such notice does not
15 constitute an affirmative waiver of the insured's right to supplementary
16 uninsured/underinsured motorist coverage or indicate the selection of
17 any lower amount of such coverage where the insured has not signed a
18 form to reject such coverage or select a lower amount of coverage.
19 (iii) The superintendent may promulgate regulations pertaining to
20 supplementary uninsured/underinsured motorists insurance coverage in
21 accordance with the provisions of this section, regarding the form and
22 content of the notices required by clauses (i) and (ii) of this subpara-
23 graph.
24 § 2. This act shall take effect on the one hundred eightieth day after
25 it shall have become a law, and shall apply to insurance policies and
26 contracts issued, entered into or renewed on and after such effective
27 date.
