Amd §2327, Ins L; amd §2, Chap of 2023 (as proposed in S.5764-B & A.4668-B)
Limits third party verification of an applicant's driving history when used as a rating or underwriting factor for private passenger motor vehicle insurance to such applicant's New York State driving history; limits application to policies issued on and after the effective date.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8500
SPONSOR: Weprin TITLE OF BILL:
An act to amend the insurance law and a chapter of the laws of 2023
amending the insurance law relating to using driving history as a rating
or underwriting factor for private passenger motor vehicle insurance, as
proposed in legislative bills numbers S. 5764-B and A. 4668-B, in
relation to using driving history as a rating or underwriting factor for
private passenger motor vehicle insurance
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to make amendments to Chapter 767 of the
Laws of 2023 relating to the verification of driving history when used
as a rating or underwriting factor for private passenger motor vehicle
insurance.
SUMMARY OF PROVISIONS:
Sections 1 & 2 provide technical amendments to Chapter 767 of the Laws
of 2023 and specifies that the law applies to drivers' New York State
driving history.
Section 3 provides 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. The practice
of intentionally disregarding driver history information in order to
present a false price to an insurance consumer undermines the credibili-
ty 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.
Chapter 767 of the Laws of 2023 requires auto insurers that utilize an
applicant's driving history as a rating or underwriting factor for
private passenger motor vehicle insurance to, before binding a policy of
insurance or accepting a percentage of the annual premium due for a
policy, make a good faith effort to verify the applicant's driving
history and other named drivers that aze listed on the application using
a third-party database. The law also requires insurers to vetify•the,7,
driving history of a named driver used to rate the policy when added
during the policy period and all drivers used to rate the policy at
policy renewal, unless the driving history is unavailable at the time of
the initial inquiry due to a temporary website outage, service inter-
ruption or other circumstances beyond the control of the insurer,
producer or third-party representative. This Chapter amendment provides
technical amendments and specifies that the law applies to drivers' New
York State driving history.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect on the same date and in the same manner as a
chapter of the laws of 2023 amending the insurance law relating to using
driving history as a rating or underwriting factor for private passenger
motor vehicle insurance, as proposed in legislative bills numbers S.
5764-B and A. 4668-B, takes effect.
STATE OF NEW YORK
________________________________________________________________________
8500
IN ASSEMBLY
January 4, 2024
___________
Introduced by M. of A. WEPRIN -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law and a chapter of the laws of 2023
amending the insurance law relating to using driving history as a
rating or underwriting factor for private passenger motor vehicle
insurance, as proposed in legislative bills numbers S. 5764-B and A.
4668-B, in relation to using driving history as a rating or underwrit-
ing 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. Section 2327 of the insurance law, as added by a chapter of
2 the laws of 2023 amending the insurance law relating to using driving
3 history as a rating or underwriting factor for private passenger motor
4 vehicle insurance, as proposed in legislative bills numbers S. 5764-B
5 and A. 4668-B, is amended to read as follows:
6 § 2327. Verification of driving history. No insurer who utilizes an
7 applicant's New York state driving history as a rating or underwriting
8 factor for private passenger motor vehicle insurance in this state shall
9 bind a policy of insurance, or [accept] process a percentage of the
10 annual premium due for a policy, without first making a good faith
11 effort to verify said applicant's New York state driving history, as
12 well as the New York state driving history of all named drivers that are
13 used to rate the policy and are listed by the applicant on the private
14 passenger motor vehicle insurance application, through the use of a
15 third-party database. An insurer also shall verify, through a third-par-
16 ty database, the New York state driving history of a named driver used
17 to rate the policy when added during the policy period [and shall verify
18 the driving history of all drivers used to rate the policy at policy
19 renewal], unless the New York state driving history is unavailable at
20 the time of the initial inquiry due to a temporary website outage,
21 service interruption or other circumstances beyond the control of the
22 insurer, producer or third-party representative.
23 § 2. Section 2 of a chapter of the laws of 2023 amending the insurance
24 law relating to using driving history as a rating or underwriting factor
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09439-08-4
A. 8500 2
1 for private passenger motor vehicle insurance, as proposed in legisla-
2 tive bills numbers S. 5764-B and A. 4668-B, is amended to read as
3 follows:
4 § 2. This act shall take effect on the one hundred eightieth day after
5 it shall have become a law and shall apply to policies issued [or
6 renewed] on or after such date. Effective immediately, the addition,
7 amendment and/or repeal of any rule or regulation necessary for the
8 implementation of this act on its effective date are authorized to be
9 made and completed on or before such effective date.
10 § 3. This act shall take effect on the same date and in the same
11 manner as a chapter of the laws of 2023 amending the insurance law
12 relating to using driving history as a rating or underwriting factor for
13 private passenger motor vehicle insurance, as proposed in legislative
14 bills numbers S. 5764-B and A. 4668-B, takes effect.
