NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A807
TITLE OF BILL:
An act to amend the insurance law, in relation to permitting insurers to
provide certain loss prevention and risk management devices to insureds
and prospective insureds
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends the insurance law to allow auto insurance
companies to provide certain loss prevention and risk management devices
to their insureds and prospective insureds, and to offer certain incen-
tives for participating in such programs.
Section 2 of the bill provides for an effective date.
This bill would allow insurance companies to offer incentives to both
insureds and prospective insureds, for participating in certain loss
prevention and risk management programs through the use of "telematics
devices" to monitor the driving habits of those individuals participat-
ing in the rewards program. "Telematics" refers to the technology of
sending, receiving, and storing information relating to remote objects,
such as vehicles, via telecommunication devices. The term is often used
to refer specifically to the use of the technology in connection with '
the provision of auto insurance
The bill would clarify that telematics rewards programs do not violate
the "anti-rebate" provisions of Section 2324 of the New York State
Insurance Law. Currently, it is estimated that the vast majority of the
states allow for such telematics rewards programs and recognize that
these programs do not in any way constitute an improper rebate under
their state's respective anti-rebate statutes. This bill would clarify
this program in New York in a similar fashion. By being able to offer
incentives for both insured and prospective insureds to participate in
telematics and risk management programs, insurance companies can help
drivers to improve their driving habits, thereby resulting in safer
conditions on the state's roads and highways. Additionally, partic-
ipation in this type of real-time data monitoring program would be
completely voluntary and would have no effect on the existing rates of
insured drivers, should they decide not to participate.
The auto insurance industry is revolutionizing as technology develops,
and this legislation simply amends present law to recognize both the
validity, desirability and legality of a program that simply could not
have been anticipated when the anti-rebate sections of the Insurance Law
were first adopted.
PRIOR LEGISLATIVE HISTORY:
2021-2022A1545 referred to insurance
2019-2020A3834 referred to insurance
06/05/15A8060 referred to insurance
01/06/16A8060 referred to insurance
2017/2018A4338 referred to insurance
The bill is'effective immediately.