BILL NUMBER: S5239
SPONSOR: COMRIE
 
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 insurance law to clarify that telemat-
ics rewards programs do not violate the anti-rebate provisions of
Section 2324 of the insurance 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:
S3553 of 2023-24
S.504 of 2021-22
S.3497 of 2019-20
S.3554 of 2017-18
S.5890 of 2015-16.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S5239: 2324 insurance law