New York State Assembly

 
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•  Chamber Video/Transcript 

A00979 Summary:

A00979 Actions:

A00979 Committee Votes:

Committee:INSURANCE   Chair:Weprin      
DATE:05/13/2025AYE/NAY:24/0  Action: Favorable         
Weprin
Aye
Blankenbush
Aye
Cook
Aye
Hawley
Aye
Lavine
Aye
Palmesano
Aye
Steck
Aye
Gandolfo
Aye
Dilan
Aye
Jensen
Aye
Hunter
Aye
Blumencranz
Aye
Jacobson
Aye
Bendett
Aye
Meeks
Aye
Forrest
Excused
Anderson
Aye
Cruz
Aye
Bores
Aye
Lunsford
Aye
Berger
Aye
Eichenstein
Aye
Kay
Aye
Yeger
Aye
Wieder
Aye

A00979 Floor Votes:

A00979 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A979A
 
SPONSOR: Lunsford

 
TITLE OF BILL:
 
An act to amend the insurance law, in relation to contractual liability
insurance policies
 
 
PURPOSE OR GENERAL IDEA OF BILL:
 
This bill allows service contractor providers to maintain up to five
service contract reimbursement insurance policies to insure active
service contract agreements.
 
 
SUMMARY OF PROVISIONS:
 
Section 1 of the bill amends section 7903 of the insurance law to affirm
that service contract providers are authorized to obtain coverage
through up to five service contract reimbursement insurance policies on
acitively offered service contracts.
 
Section 2 is the effective date.
 
 
JUSTIFICATION:
 
Primary service contract coverage offers benefits comparable to a
manufacturer's limited warranty (i.e. coverage for defects in materials
and workmanship or wear and tear). Service contract coverage is supple-
mental to a manufacturer's warranty. To avoid unintentionally selling
duplicative coverage, primary service contract coverage may not begin
until the manufacturer's warranty expires.
 
Service contracts often also provide protection against power surges and
accidental damage from handling, but manufacturers' warranties usually
do not provide such coverage. Currently, the NYS Department of Financial
Services interprets Insurance Law § 7902(k) to state that coverage for
power surges and accidental damage from handling is only permissible as
incidental coverage and therefore, it must share the primary coverage's
term length (effective and expiration dates).
 
Since a manufacturer's warranty does not provide protection against
power surges and accidental damage from handling, and since a service
contract's protection against these perils may not begin until the
manufacturer's warranty expires, consumers are often left exposed and
without coverage against these perils during the term of the manufactur-
er's warranty.
 
This bill amends the Insurance Law to clarify that service contractor
providers may maintain up to five service contract reimbursement insur-
ance policies to insure their active service contract agreements.
 
 
PRIOR HISTORY:
 
2024: Similar Bill (A.1193/Lunsford) Died in Insurance
 
2023: Similar Bill (A.1193/Lunsford) Died in Insurance
 
2022: Similar Bill (A.10591/Rules/Lunsford) Died in Insurance
 
 
FISCAL IMPLICATIONS:
 
None to the State.
 
 
EFFECTIVE DATE:
This act shall take effect immediately.

A00979 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         979--A
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 8, 2025
                                       ___________
 
        Introduced by M. of A. LUNSFORD, WEPRIN -- read once and referred to the
          Committee  on Insurance -- committee discharged, bill amended, ordered
          reprinted as amended and recommitted to said committee
 
        AN ACT to amend the insurance law, in relation to contractual  liability
          insurance policies

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraph 1 of subsection (c) of section 7903 of the insur-
     2  ance law, as amended by chapter 578 of the laws of 2000, is  amended  to
     3  read as follows:
     4    (1)  insure the performance of [all] its obligations under all service
     5  contracts pursuant to a service contract reimbursement insurance  policy
     6  issued  by an insurer authorized to issue service contract reimbursement
     7  insurance in this state or procured by an excess line licensee  pursuant
     8  to  section  two  thousand  one  hundred eighteen of this chapter.  Each
     9  provider may maintain a maximum of five service  contract  reimbursement
    10  insurance  policies insuring its service contracts actively offered.  In
    11  the event the provider fails to insure its obligations pursuant to  this
    12  paragraph  or  in the event that such insurance shall lapse or be termi-
    13  nated, the provider shall comply with either paragraph two or  three  of
    14  this  subsection within forty-five days of the insurance lapse or termi-
    15  nation;
    16    § 2.  This act shall take effect immediately.
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01514-02-5

A00979 LFIN:

 
NO LFIN

A00979 Chamber Video/Transcript: