Prohibits refusal to issue or renew certain insurance policies solely on the ground of the nature of the occupation of the applicant

BILL NUMBER:S2436

Title of bill

An act to amend the insurance law, in relation to prohibited basis for refusal to issue or renew a covered policy of property/casualty insurance or for limiting coverage therein

Purpose

To prohibit insurance companies from denying the application for or renewal of a personal umbrella liability insurance policy based on an applicant's occupation.

Summary of provisions

Section 1: Amends section 3425 of the insurance law by adding a new subsection (i-1) which would prohibit an insurer from refusing to issue or renew a covered policy or include a provision in the insurance contract limiting coverage under the contract, based on the nature of the occupation of the applicant or insured.

Existing law

Currently, all insurance contracts for personal umbrella liability insurance prohibit a person from applying or having their insurance contract renewed if they are public office holders, seeking public office, professional entertainers, professional athletes, radio and television broadcasters, newspaper publishers, editors and reporters, individuals convicted of libel or slander, labor leaders, private detectives, sheriffs and police officers.

Justification

Personal umbrella liability insurance is designed to cover personal (non business) liability of individuals. Currently, certain individuals because of their occupations are not able to apply for or even renew an existing personal umbrella liability insurance policy. The following occupations because they are considered to be a high risk group are denied umbrella insurance coverage: public office holders, professional entertainers, professional athletes, radio and television broadcasters, newspaper publishers, editors and reporters, individuals convicted of libel or slander, labor leaders, private detectives, sheriffs and police officers.

Recognizing that public office holders should not be discriminated against, states such as Oregon and Texas have enacted statutes to exempt public office holders from this high risk group, permitting them to apply for personal liability insurance.

The decision to grant insurance coverage or not should be made on a case by case basis weighing various risk factors, not based on a wholesale exclusion of a certain classes of people. Therefore, this legislation does not mandate that insurance companies grant individuals working in an excluded profession an umbrella policy. It merely allows these individuals to apply for such coverage and be

granted or denied coverage based on their individual backgrounds and experiences.

Legislative history

2007-2008 - Insurance. 2010 - Insurance

Fiscal implications

None to the state.

Effective date

This act shall take effect on the first day of the calendar month next succeeding the 30th day after it shall have become a law.