BILL NUMBER: S4963
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law, in relation to requiring the super-
intendent of financial services to promulgate regulations which provide
standardized definitions for commonly used terms and phrases in certain
insurance policies
 
SUMMARY OF PROVISIONS:
This bill would require the Superintendent of Financial Services, within
six months of the effective date of this bill, to promulgate regulations
which provide standardized definitions for commonly used terms and
phrases found in homeowners policies and commercial lines policies that
provide coverage for loss or damage to real property, personal property,
or other liabilities for loss or damage to property. Insurers would be
required to use the standardized terms and phrases in policies issued or
delivered on or after the date the regulations are finalized. The bill
would also allow insurers to use alternative definitions at the
discretion of the Superintendent, so long as such definitions are not
any less favorable to the policyholder or claimant than those required
under the regulations.
 
JUSTIFICATION:
Homeowners and commercial insurance policies provide necessary coverage
to individuals and business owners that can prove vital in the aftermath
of a disaster such as Superstorm Sandy. However, these policies can also
be complex, and commonly used terms and phrases may have different mean-
ings when used in different policies. This can cause confusion amongst
policyholders, especially following a disaster when they need their
insurance coverage the most. This bill would address this by ensuring
that all homeowner policies and certain commercial policies contain
standardized terms and phrases.
 
LEGISLATIVE HISTORY:
2023-24: Referred to Insurance
2021-22: Referred to Insurance
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S4963: 3425 insurance law, 3426 insurance law