A03056 Summary:

Amd §2324, Ins L
Ensures that insurers are permitted to offer loss prevention programs as long as such programs are offered to the general public and the insurer's policyholders.
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A03056 Actions:

02/02/2023referred to insurance
01/03/2024referred to insurance
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A03056 Committee Votes:

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A03056 Floor Votes:

There are no votes for this bill in this legislative session.
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A03056 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Pretlow
  TITLE OF BILL: An act to amend the insurance law, in relation to providing loss prevention programs   PURPOSE: To permit insurers to offer incentives to both insureds and prospective insureds for participating in certain risk management programs through the use of "telematics devices".   SUMMARY OF PROVISIONS: Section 1 of the bill amends the Financial Services Law to clarify that telematics rewards programs do not violate the "anti-rebate" provisions of Section 2324 of the Financial Services Law. Section 2 of the bill provides for an effective date.   JUSTIFICATION: This bill would allow insurance companies to offer incentives to both insureds and prospective insureds for participating in certain risk management programs through the use of "telematics devices". "Telemat- ics" refers to the technology of sending, receiving, and storing infor- mation relating to remote objects, such as vehicles, via telecommuni- cation devices. The term is often used to refer specifically to the use of the technology in connection with the provision of auto insurance, See Insurance Circular Letter No. 4, Insurance Telematics and Usage- Based Auto Insurance (May 27, 2014). Currently, it is estimated that approximately forty-nine states allow for such telematics rewards programs and recognize that these programs do not constitute an improper rebate under their respective anti-rebate statutes. By being able to offer incentives to both insureds and prospective insureds to participate in telematics-based risk management programs, insurance companies can help drivers improve their driving habits, thereby resulting in safer conditions on the state's roads and highways.   LEGISLATIVE HISTORY: 2021-2022 A1687 referred to Insurance 2019-2020 A3573 referred to insurance 01/03/18 A3852 referred to insurance   FISCAL IMPLICATIONS: None to the State.   EFFECTIVE DATE: Immediately
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A03056 Text:

                STATE OF NEW YORK
                               2023-2024 Regular Sessions
                   IN ASSEMBLY
                                    February 2, 2023
        Introduced  by M. of A. PRETLOW -- read once and referred to the Commit-
          tee on Insurance
        AN ACT to amend  the  insurance  law,  in  relation  to  providing  loss
          prevention programs
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 2324  of  the  insurance  law,  subsection  (a)  as
     2  amended  by  chapter  291  of  the  laws  of 2012, is amended to read as
     3  follows:
     4    § 2324. Rebating and discrimination. (a)  No  authorized  insurer,  no
     5  licensed  insurance agent, no licensed insurance broker, and no employee
     6  or other representative of any such insurer, agent or broker shall make,
     7  procure or negotiate any contract of insurance  other  than  as  plainly
     8  expressed in the policy or other written contract issued or to be issued
     9  as evidence thereof, or shall directly or indirectly, by giving or shar-
    10  ing  a  commission or in any manner whatsoever, pay or allow or offer to
    11  pay or allow to the insured or to any employee of the insured, either as
    12  an inducement to the making of insurance or  after  insurance  has  been
    13  effected,  any rebate from the premium which is specified in the policy,
    14  or any special favor or advantage in the dividends or other  benefit  to
    15  accrue  thereon,  or  shall give or offer to give any valuable consider-
    16  ation or inducement of any kind, directly or indirectly,  which  is  not
    17  specified  in such policy or contract, other than any valuable consider-
    18  ation,  including  but  not  limited  to   merchandise   or   periodical
    19  subscriptions,  not  exceeding  twenty-five  dollars  in value, or shall
    20  give, sell or purchase, or offer  to  give,  sell  or  purchase,  as  an
    21  inducement  to  the making of such insurance or in connection therewith,
    22  any stock, bond or other securities or any dividends or profits  accrued
    23  thereon,  nor  shall  the insured, his agent or representative knowingly
    24  receive directly or indirectly, any such  rebate  or  special  favor  or
    25  advantage,  provided,  however, a licensed insurance agent or a licensed

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 3056                             2
     1  insurance broker may retain the usual commission or underwriting fee  on
     2  insurance  placed on his own property or risks, if the aggregate of such
     3  commissions or underwriting fees will not exceed  five  percent  of  the
     4  total  net  commissions  or  underwriting fees received by such licensed
     5  insurance agent or insurance broker during the calendar year.
     6    (b) Within the meaning of subsection (a)  hereof,  the  sharing  of  a
     7  commission with the insured shall be deemed to include any case in which
     8  a  licensed  insurance  agent  or a licensed insurance broker which is a
     9  subsidiary corporation of, or a corporation affiliated with, any  corpo-
    10  ration  insured, received commissions for the negotiation or procurement
    11  of any policy or contract of insurance for the insured.
    12    (c) This section shall not prohibit any insurer from offering  partic-
    13  ipation  in  a loss prevention program that promotes and incentives safe
    14  driving behavior with points-based rewards so long as  participation  in
    15  such program is offered both to members of the general public and to the
    16  insurer's policyholders.
    17    (d)  This  section  shall  not  prohibit  any  insurer  from equitably
    18  distributing to its policyholders  dividends  payable  from  surplus  on
    19  earned  premiums, nor prohibit the return at any time during the term or
    20  at the termination of the contract of insurance of dividends, savings or
    21  the unused or unabsorbed portion of premiums  and  premium  deposits  to
    22  policyholders  of  a  mutual  insurer  or to subscribers of a reciprocal
    23  insurer, nor prohibit any insurer or insurance agent from paying commis-
    24  sions to a  licensed  insurance  broker  for  negotiating  a  policy  or
    25  contract  of  insurance, nor prohibit any licensed insurance broker from
    26  sharing or dividing a commission earned or  received  by  him  with  any
    27  other  licensed  insurance broker or brokers who shall have aided him in
    28  respect to the insurance for the negotiation of which the commission has
    29  been earned or paid.
    30    [(d)] (e) This section shall not  prohibit  the  making  of  temporary
    31  contracts  of insurance, either by temporary binders or other memoranda,
    32  if the premium applicable to the insurance shall be  due  and  shall  be
    33  paid  for  the  time during which the insurance is in force by virtue of
    34  the temporary contract.
    35    [(e)] (f) This section shall not apply to any policy  or  contract  of
    36  reinsurance  nor  to  any contract or policy of life insurance, accident
    37  insurance or health insurance which is  subject  to  the  provisions  of
    38  section  four  thousand  two hundred twenty-four of this chapter, nor to
    39  any contract or policy of marine  insurance,  other  than  contracts  or
    40  policies  of automobile insurance, or of marine protection and indemnity
    41  insurance, nor to any  insurance  contract,  or  rate  of  insurance  in
    42  connection with any insurance contract either against loss or damage to,
    43  or  legal  liability  in  connection  with,  any property located wholly
    44  outside of this state or any activity carried on outside of  this  state
    45  or any motor vehicle or aircraft principally garaged and used outside of
    46  this state.
    47    [(f)]  (g)  Any person or corporation violating the provisions of this
    48  section shall, in addition to all other penalties provided by  law,  pay
    49  to the people of this state as a penalty the sum of five hundred dollars
    50  for each such violation.
    51    § 2. This act shall take effect immediately.
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A03056 LFIN:

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A03056 Chamber Video/Transcript:

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