NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4668B
SPONSOR: Weprin TITLE OF BILL:
An act to amend the insurance law, in relation to using driving history
as a rating or underwriting factor for private passenger motor vehicle
insurance
PURPOSE:
This bill would require verification of driving history when used as a
rating or underwriting factor for private passenger motor vehicle insur-
ance.
SUMMARY OF PROVISIONS:
Section one amends the insurance law to add a new section 2327 regarding
verification of driving history. The section establishes that no insurer
who utilizes an applicant's driving history as a rating or underwriting
factor for private passenger motor vehicle insurance in the state shall
bind a policy of insurance, or accept a down payment for a policy, with-
out first making a good faith effort to verify said applicant's driving
history, as well as the driving history of all named-drivers listed by
the applicant on the private passenger motor vehicle insurance applica-
tion, through the use of a third party database unless the driving
history is unavailable.
Section two establishes the effective date.
JUSTIFICATION:
There is currently a practice in the insurance community of certain
carriers of personal automobile policies binding coverage based on an
initial quote and questionnaire with the insured, and then raising the
premium following a check of the insureds driving history.
Responsible insurance agents and companies utilize all available under-
writing resources prior to binding a policy for an insured. The practice
of intentionally disregarding driver hittory information in order to
present a false price to an insurance consumer under mines the credibil-
ity of the insurance industry as a whole. Consumers should be able to
rely on the quotes for insurance policies to be fair and accurate so
they can determine whether the coverage is affordable. This practice
detracts from that ability and leaves the consumers bound to policies
that are much more expensive than originally represented and in some
cases, unaffordable. Requiring all carriers to run motor vehicle reports
prior to binding coverage would guarantee the consumer will receive a
fair and accurate quote prior to committing to the expense.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on the 180th day after it shall have become a
law and shall apply to policies issued or renewed on or after such date.
Effective immediately, any actions necessary to implement the provisions
of this act on its effective date are authorized and directed to be
completed on or before such date.
STATE OF NEW YORK
________________________________________________________________________
4668--B
Cal. No. 88
2023-2024 Regular Sessions
IN ASSEMBLY
February 22, 2023
___________
Introduced by M. of A. WEPRIN -- read once and referred to the Committee
on Insurance -- advanced to a third reading, passed by Assembly and
delivered to the Senate, recalled from the Senate, vote reconsidered,
bill amended, ordered reprinted, retaining its place on the order of
third reading -- again amended on third reading, ordered reprinted,
retaining its place on the order of third reading
AN ACT to amend the insurance law, in relation to using driving history
as a rating or underwriting factor for private passenger motor vehicle
insurance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 2327
2 to read as follows:
3 § 2327. Verification of driving history. No insurer who utilizes an
4 applicant's driving history as a rating or underwriting factor for
5 private passenger motor vehicle insurance in this state shall bind a
6 policy of insurance, or accept a percentage of the annual premium due
7 for a policy, without first making a good faith effort to verify said
8 applicant's driving history, as well as the driving history of all named
9 drivers that are used to rate the policy and are listed by the applicant
10 on the private passenger motor vehicle insurance application, through
11 the use of a third-party database. An insurer also shall verify, through
12 a third-party database, the driving history of a named driver used to
13 rate the policy when added during the policy period and shall verify the
14 driving history of all drivers used to rate the policy at policy
15 renewal, unless the driving history is unavailable at the time of the
16 initial inquiry due to a temporary website outage, service interruption
17 or other circumstances beyond the control of the insurer, producer or
18 third-party representative.
19 § 2. This act shall take effect on the one hundred eightieth day after
20 it shall have become a law and shall apply to policies issued or renewed
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09439-07-3
A. 4668--B 2
1 on or after such date. Effective immediately, the addition, amendment
2 and/or repeal of any rule or regulation necessary for the implementation
3 of this act on its effective date are authorized to be made and
4 completed on or before such effective date.
