Relates to electronic delivery of property/casualty insurance notices and posting property/casualty insurance policies on the internet; authorizes electronic delivery of insurance notices with consent and the posting of policies on the internet if certain conditions are met; requires notice in the subject line and body of an email to be clear and conspicuous.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A651A
SPONSOR: Rosenthal D TITLE OF BILL:
An act to amend the insurance law, in relation to electronic delivery of
property/casualty insurance notices
PURPOSE OR GENERAL IDEA OF BILL:
To permit insurance notices and documents to be delivered electronically
with policyholder consent.
SUMMARY OF PROVISIONS:
Section 1 adds new section 3457 to the Insurance Law to permit
property/casualty insurers to deliver insurance notices and documents
electronically with policyholder consent.Section 2 is the effective
date.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
This version of the legislation removes the original language to mandate
a clickwrap acknowledgement of receipt. This version strengthens to
requirements for insurers to conspicuously flag relevant notices via
electronic delivery.
JUSTIFICATION:
There has been an increasing trend in society towards digital communi-
cation. Insurance companies and consumers have both expressed interest
in having the option to send and receive notices electronically.The
Department of Financial Services allows the use of electronic communi-
cations in some insurance related notices. However, there is significant
exception to this allowance. Electronic delivery is not allowed for
notices where statute requires the notice to be physically mailed. Such
notices include cancellation, discontinuance or other major changes to
policy. This legislation would remove these exceptions and allow for all
insurance notices to be delivered electronically if the consumer affir-
matively consents to delivery by this method. The bill includes safe-
guards to protect the consumer including options to withdraw consent,
notices of necessary software/hardware requirements and requires insur-
ers to provide a clear notice of rights before consent is granted.
Insurers are further required to make efforts to deliver by alternate
methods in instances where electronic deliver is believed to have
failed.By allowing for consumer directed opt-in for paperless delivery,
we safeguard customers from missing vital information that may be lost
or disregarded in mail delivery. Furthermore, this bill has positive
environmental impacts by drastically reducing non-essential physical
printing and postage in cases where consumers opt for electronic deliv-
ery.
PRIOR LEGISLATIVE HISTORY:
A.1683 (2017-2018) A.80768 (2015-2016)
A16830 (2017-2018) A7877 (2020)- Referred to Insurance
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None to the state.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become law.
STATE OF NEW YORK
________________________________________________________________________
651--A
2021-2022 Regular Sessions
IN ASSEMBLY(Prefiled)
January 6, 2021
___________
Introduced by M. of A. D. ROSENTHAL, DICKENS, L. ROSENTHAL, SIMON, NIOU,
McDONALD -- Multi-Sponsored by -- M. of A. BLANKENBUSH -- read once
and referred to the Committee on Insurance -- reported and referred to
the Committee on Codes -- reported and referred to the Committee on
Rules -- Rules Committee discharged, bill amended, ordered reprinted
as amended and recommitted to the Committee on Rules
AN ACT to amend the insurance law, in relation to electronic delivery of
property/casualty insurance notices
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 3458
2 to read as follows:
3 § 3458. Electronic notices and documents. (a) As used in this section,
4 the following words shall have the following meanings:
5 (1) "Delivered by electronic means" includes:
6 (A) delivery to an electronic mail address at which a party has
7 consented to receive notices or documents; or
8 (B) posting on an electronic network or site accessible via the inter-
9 net, mobile application, computer, mobile device, tablet, or any other
10 electronic device, together with separate notice of the posting which
11 shall be provided by electronic mail to the address at which the party
12 has consented to receive notice or by any other delivery method that has
13 been consented to by the party.
14 (2) "Party" means any recipient of any notice or document required as
15 part of a property/casualty insurance transaction, including but not
16 limited to an applicant, an insured, or a policyholder.
17 (b) Subject to the requirements of this section, any notice to a party
18 or any other document required under applicable law in a
19 property/casualty insurance transaction or that is to serve as evidence
20 of property/casualty insurance coverage may be delivered, stored, and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05115-02-1
A. 651--A 2
1 presented by electronic means so long as it meets the requirements of
2 article three of the state technology law.
3 (c) Delivery of a notice or document in accordance with this section
4 shall be considered equivalent to any delivery method required under
5 applicable law, including delivery by first class mail; first class
6 mail, postage prepaid; certified mail; certificate of mail; or certif-
7 icate of mailing.
8 (d) A notice or document may be delivered by electronic means by an
9 insurer to a party under this section if:
10 (1) the party has affirmatively consented to that method of delivery
11 and has not withdrawn the consent;
12 (2) the party, before giving consent, is provided with a clear and
13 conspicuous statement informing the party of:
14 (A) the right of the party to withdraw consent to have a notice or
15 document delivered by electronic means, at any time, and any conditions
16 or consequences imposed in the event consent is withdrawn;
17 (B) the types of notices and documents to which the party's consent
18 would apply;
19 (C) the right of a party to have a notice or document delivered in
20 paper form; and
21 (D) the procedures a party must follow to withdraw consent to have a
22 notice or document delivered by electronic means and to update the
23 party's electronic mail address;
24 (3) the party:
25 (A) before giving consent, is provided with a statement of the hard-
26 ware and software requirements for access to and retention of a notice
27 or document delivered by electronic means; and
28 (B) consents electronically, or confirms consent electronically, in a
29 manner that reasonably demonstrates that the party can access informa-
30 tion in the electronic form that will be used for notices or documents
31 delivered by electronic means as to which the party has given consent;
32 and
33 (4) after consent of the party is given, the insurer, in the event a
34 change in the hardware or software requirements needed to access or
35 retain a notice or document delivered by electronic means creates a
36 material risk that the party will not be able to access or retain a
37 subsequent notice or document to which the consent applies:
38 (A) provides the party with a statement that describes:
39 (i) the revised hardware and software requirements for access to and
40 retention of a notice or document delivered by electronic means; and
41 (ii) the right of the party to withdraw consent without the imposition
42 of any condition or consequence that was not disclosed at the time of
43 initial consent; and
44 (B) complies with paragraph two of this subsection.
45 (e) Any electronic mail being sent by an insurer to a party in
46 connection with the delivery of a cancellation notice, non-renewal
47 notice or conditional renewal notice delivered by electronic means shall
48 include in the subject line and body of the communication clear and
49 conspicuous language alerting the receiving party as to the importance
50 of the communication and the type of notice being delivered to such
51 party electronically.
52 (f) This section does not affect requirements related to content or
53 timing of any notice or document required under applicable law.
54 (g) If a provision of this chapter or applicable law requiring a
55 notice or document to be provided to a party expressly requires verifi-
56 cation or acknowledgment of receipt of the notice or document, the
A. 651--A 3
1 notice or document may be delivered by electronic means only if the
2 method used provides for verification or acknowledgment of receipt.
3 (h) The legal effectiveness, validity, or enforceability of any
4 contract or policy of insurance executed by a party may not be denied
5 solely because of the failure to obtain electronic consent or confirma-
6 tion of consent of the party in accordance with subparagraph (B) of
7 paragraph three of subsection (d) of this section.
8 (i) (1) A withdrawal of consent by a party does not affect the legal
9 effectiveness, validity, or enforceability of a notice or document
10 delivered by electronic means to the party before the withdrawal of
11 consent is effective.
12 (2) A withdrawal of consent by a party is effective within a reason-
13 able period of time after receipt of the withdrawal by the insurer.
14 (3) Failure by an insurer to comply with paragraph four of subsection
15 (d) and subsection (k) of this section may be treated, at the election
16 of the party, as a withdrawal of consent for purposes of this section.
17 (j) This section does not apply to a notice or document delivered by
18 an insurer in an electronic form before the effective date of this
19 section to a party who, before that date, has consented to receive a
20 notice or document in an electronic form otherwise allowed by law.
21 (k) If the consent of a party to receive certain notices or documents
22 in an electronic form is on file with an insurer before the effective
23 date of this section, and pursuant to this section, an insurer intends
24 to deliver additional notices or documents to such party in an electron-
25 ic form, then prior to delivering such additional notices or documents
26 electronically, the insurer shall:
27 (1) provide the party with a statement that describes:
28 (A) the notices or documents that shall be delivered by electronic
29 means under this section that were not previously delivered electron-
30 ically; and
31 (B) the party's right to withdraw consent to have notices or documents
32 delivered by electronic means, without the imposition of any condition
33 or consequence that was not disclosed at the time of initial consent.
34 (2) comply with paragraph two of subsection (d) of this section.
35 (l) An insurer shall deliver a notice or document by any other deliv-
36 ery method permitted by law other than electronic means if:
37 (1) the insurer attempts to deliver the notice or document by elec-
38 tronic means and has a reasonable basis for believing that the notice or
39 document has not been received by the party, or
40 (2) the insurer becomes aware that the electronic mail address
41 provided by the party is no longer valid.
42 (m) This section may not be construed to modify, limit, or supersede
43 the provisions of the federal Electronic Signatures in Global and
44 National Commerce Act, Public Law 106-229, as amended.
45 § 2. This act shall take effect on the ninetieth day after it shall
46 have become a law.
