BILL NUMBER: S1655
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law, in relation to requiring all motor
vehicle insurers to file annual financial statements and detailed claim
data with the superintendent of financial services
 
PURPOSE OF BILL:
The bill expands upon current insurance reporting laws by providing for
more detailed reporting requirements of automobile insurers' financial
statements and closed claims data. This enhanced data collection will
provide lawmakers with a source of reliable and accessible data that
will better enable them to evaluate automobile insurance and assist in
providing an optimal product to New Yorkers.
 
SUMMARY OF PROVISIONS OF BILL:
The proposed language provides for a publicly accessible and neutral
method for the systematic collection of automobile insurers' financial
and closed claims data. The supplemental financial disclosure require-
ments stipulate that insurers must provide detailed information concern-
ing all sources of income including, but not limited to, data on premi-
ums received, investment income, and profit from the sale of assets.
Detailed information regarding expenses must also be provided, including
expenses actually incurred and paid, normal business expenses, salaries,
commissions, consulting fees, legal expenses, and advertising costs. A
synopsis of the total claims or settlements paid in each financial
statement and specific data on claims that have been settled with or
without payment (closed claims) must also be provided. Additionally, all
submitted data must be signed by the insurer's chief executive officer,
attesting to its accuracy. Civil penalties will be assessed against
companies that fail to comply with any of the provisions of the bill.
The proposal also indicates that the superintendent must make all infor-
mation publicly available to consumers on the department's web site.
 
JUSTIFICATION:
Automobile insurance is a vital part of the New York State economy and
is of great importance to the citizens of New York. Automobile liability
insurance protects against the possible adverse financial consequences
of being held liable for damage to another person or their property. A
failure to have fairly priced automobile insurance with adequate bene-
fits from solvent insurance companies could have dire consequences for
New York. Given the significance of automobile insurance to New York
State and its citizens, the state has a compelling public interest in
ensuring that the parties with a stake in the transactions - the policy-
holders and insurance companies - are all treated fairly. It is also
important to ensure that the benefits to citizens are adequate and that
insurance companies (1) can earn a fair profit, (2) make good on their
promises, and (3) operate in a fair efficient manner. For lawmakers to
be able to carefully evaluate various alternatives for achieving these
objectives, it is vital that information concerning automobile insurance
be available.
There are many insurance industry entities that give the insurance
industry's perspective on automobile insurance. These entities advocate
for the industry, not necessarily their policyholders. They have access
to detailed financial and claims data they do not make available to the
public. As things currently stand, no independent and neutral mechanism
exists to determine the root cause of declared insurance "crises" and
policy cancellations. Because the insurers typically refuse requests to
produce more detailed data, lawmakers and consumers must rely on the
industry's reports to make policy decisions.
Clear, independent, objective, and accurate data is needed so lawmakers
and the public can conduct sound analyses in reaching a public policy
decision that impacts millions of New Yorkers. For example, more
detailed claims data would help in evaluating no-fault insurance. In the
absence of this basic data, it is impossible for lawmakers and consumers
to engage in rational decision-making about insurance industry proposals
that may very well limit consumers' rights.
To level the proverbial playing field and have vibrant public discourse
and analysis of the issues involving automobile insurance, it is crit-
ically important that all parties involved in the discussion have access
to comprehensive information. This bill takes a step in that direction.
It will make publicly available certain information that insurance
companies have resisted disclosing in the past.
 
LEGISLATIVE HISTORY:
2019-20: Referred to Insurance
2021-22: Referred to Insurance
2023-24: Referred to Insurance
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
 
EFFECTIVE DATE:
Immediately.