BILL NUMBER: S5343
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the insurance law, in relation to payment of interest
penalty and attorney fees to a claimant when a claim is overdue and the
ability of an insurer to assert a defense or deny a claim if timely
payment is not made within thirty days after proof of claim has been
submitted
 
PURPOSE:
This bill would amend the insurance law by adding a new section 1106 and
would allow insurers additional time to investigate potentially fraudu-
lent no-fault automobile insurance claims.
 
SUMMARY OF PROVISIONS:
Section 1 amends subsection. (a) of section 5106 of the insurance law to
include "payment of the interest and reasonable attorney fees to a
claimant when payment of a claim is overdue shall be the exclusive reme-
dy when an insurer fails to make timely payment. The failure of an
insurer to make timely payment or issue a denial within thirty days
after proof of claim has been submitted to an insurer shall riot
preclude such insurer from issuing a denial or asserting a defense after
the thirty day period has elapsed."
Section 2 of this bill states that this act shall take effect sixty days
after it shall become a law.
 
JUSTIFICATION:
This bill will help to reduce no fault insurance fraud thereby reducing
premiums paid by consumers. This legislation clarifies the exclusive
penalty for an overdue payment to be interest and reasonable attorney
fees. Additionally, the legislation permits the insurer to issue a
denial after the thirty days and assert a defense after the thirty day
period. Often times in cases of fraud the investigation takes longer
than thirty days and requires additional time to determine the appropri-
ate course of action.
 
LEGISLATIVE HISTORY:
S.2814 of 23/24
S.4046 of 2021/22
S.3513 of 2019-20;
S.779 of 2017-18;
S.1056 of 2015-16;
S.2892 of 2013-14;
S.1686 of 2011-12;
S.6448 of 2009-2010;
S.2638 of 2007-08
 
FISCAL IMPLICATIONS:
Minimal.
 
EFFECTIVE DATE:
This act shall take effect sixty days after it shall become a law.

Statutes affected:
S5343: 5106 insurance law, 5106(a) insurance law