Relates to enacting the "insurance modernization act of 2014"

Second, insurance companies providing information regarding certain fire claim losses are immunized from liability for providing such information to the New York City fire agency but not any other local fire agency in the state. This measure corrects that by amending the law to include any local fire agency within the law's definition of a local fire agency for purposes of such reporting.

Third, current law through an oversight does not expressly include advance premium cooperatives as a type of cooperative allowed to invest in certificates of deposit in a certain manner that is presently allowed for assessment cooperatives. This bill would correct this oversight by stating that all co-operative property/casualty insurance companies may invest in certificates of deposit under this applicable section of law.

Summary of provisions

Section 1 and 2 of the bill provide for the title and legislative intent.

Section 3. Amend Insurance Law section 2132 (i) (3) by stipulating that a continuing education course provider under the insurance law may satisfy signature requirements through compliance with New York General Construction Law section 46, Signature.

Section 4. Insurance Law section 3432 (b) (6) is amended by including a local fire investigation agency of any municipal corporation in the state within the clause providing immunity for a property/casualty insurance company's report of a fire claim loss.

Section 5. Amends Insurance Law section 6623 (c) to delete the words "an assessment corporation" and replace them with the words "a co-operative property/casualty insurance company".

Section 6. Effective date is immediately upon enactment.

Justification

DFS currently requires continuing education course providers to submit all documents with original, or "wet", signatures. Modern technology with its extensive use of faxed documents, scanned documents and even electronic signatures has overtaken the anachronistic practice of obtaining original signatures in all cases. In fact, DFS's predecessor agency, the Department of Insurance, opined in a 2007 office of general counsel opinion (Opinion No. 07-02-11)

that an insurance producer may use a stamped signature on an application for group insurance. Furthermore, New York has the Electronic Signatures and Records Act (New York Technology Law sections 101-109), which authorizes the use and acceptance of electronic signatures in commercial transactions throughout New York state. This bill would modernize DFS's practices regarding signatures submitted by continuing education providers by allowing a copy of a signature or an electronic signature, as well as an original signature, on documents submitted by such providers.

Insurance Law sections 3415 and 3432 created a reporting system for reporting fire loss claims in excess of $10,000 in order to provide more information for arson investigations and insurance fraud investigators. An insurer submitting the required report to a "local fire investigation agency" (defined in law as the fire investigation agency for New York City) is immune from liability for the information they provided so long as they did not act fraudulently or in bad faith. Unfortunately, this immunity does not extend to such reports made by insurers to fire investigation agencies outside of New York City. Fundamental fairness dictates that the public policy reasons for this immunity similarly apply to reports made to non-New York City fire investigation agencies. Accordingly, this legislation extends the current immunity to reports made to any local fire investigation agency in New York State.

One of the chapter laws of 2000 amended Insurance Law section 6623 to allow assessment corporations, one of the two types of cooperative insurance companies in New York with the other one being advance premium corporations, to invest in certificates of deposit (CDs) with any one institution in an amount not to exceed the amount guaranteed by the Federal Deposit Insurance Corporation (FDIC). The impetus for this change was the prohibition, prior to this 2000 law, on cooperative insurers investing more than 10% of their admitted assets in any one financial institution. According to the sponsor memorandum for the 2000 law, the change in the statute was necessitated by the fact that assessment corporations are often located in small, rural areas with few investment opportunities. Since this fact also exists for many advance premium corporations, they should similarly be included within this authorization to invest in certificates of deposit. This measure would resolve that inequity by including advance premium corporations under the section of law authorizing investments in CDs.

Legislative history

New bill.

Fiscal implications

None.

Effective date

Immediately.