Creates a task force on disasters

Summary of specific provisions

§ 215. (a) Creates a task force to examine how insurers who write policies that cover loss of or damage to real property, personal property, or other liabilities for loss of, damage to, or injury to persons or property in New York State respond to disasters, in what ways state and local agencies such as the Department of Financial Services and the Department of Homeland Security and Emergency Services can assist claimants in connecting with insurance companies, and what steps the industry can take to improve its response in the future.

(b) 1. The task force would consist of 18 members, including the Superintendent of the Department of Financial Services and Commissioner of the Department of Homeland Security and Emergency Services (who shall serve as co-chairs), 5 insurers who write policies that cover loss or damage to property (including at least one insurer who writes for the National Flood insurance Program), 5 local officers who respond to disasters and emergencies (including representatives from New York City, Long Island, the Hudson Valley, and rural areas of the state that are prone to flooding), 2 organizations that represent independent and public adjusters, 2 non-profits that have experience with disaster relief, and 2 consumer advocacy groups.

The task force would report to the Governor, the Speaker of the Assembly, the Temporary President of the Senate, and the Chairs of the Assembly and Senate Insurance Committees one year after the effective date of its authorizing legislation.

The report would be required to include the following information:

(1) Steps insurers currently take in order to respond to disaster-related claims in a timely fashion.

(2) Challenges insurer experience when responding to disasters.

(3) Steps insurers currently take to adequately assess damage so that homeowners and municipalities can remove debris and make repairs quickly.

(4) Additional steps insurers and state and local agencies can take to better respond to the needs of communities and policyholders affected by a disaster.

(5) Ways insurers and state and local agencies can proactively reach out to policyholders and communities following a disaster.

(6) Ways insurers assist homeowners and businesses affected by a disaster whose premiums are due.

(7) Steps insurers can take if their employees are affected by a disaster in order to ensure that they are still able to respond to claims in a timely fashion.

(8) Whether or not New Yorkers have adequate insurance coverage and if not, identifying what barriers exist that may prevent people from purchasing adequate coverage.

(9) Identifying measures to encourage homeowners and businesses to purchase flood insurance as needed.

(10) Steps insurers take to prevent disputes with policy holders and to resolve those which do occur as well as additional steps insurers can take.

(11) Legislative actions that can be considered to address such issues.

§ 2. This act shall take effect immediately.

Justification

Following Super-storm Sandy and Tropical Storms Irene and Lee, it was found that there were lengthy delays in the time to investigate and process claims, conducting site inspections of damaged property, and making payments to policyholders. This was due to the large volume of claims received and obstacles the storms presented to insurance companies, such as washed away roads and displaced policyholders. Such delays made it difficult for homeowners and communities to begin to make repairs and rebuild in a timely fashion and were especially troublesome when repairs were necessary for the health and safety of individuals and the community.

In addition, disasters have a significant impact upon businesses, especially small businesses. For example, following Sandy, many businesses in downtown Manhattan were unable to open, resulting in not only lost income for the businesses but also lost wages for their employees. This can make it difficult for business owners and individuals to make premium payments, putting them at risk for losing their insurance coverage when they need it the most.

Furthermore, following the storms many policyholders were surprised to learn that they did not have adequate coverage. Many policyholders were unaware that their homeowner's policy did not cover flood damages or, if they were aware, did not purchase a separate flood policy. Policyholders also expressed confusion over what types of damages homeowners and flood policies cover and what the coverage limits were under their policies. As a result, many policyholders received payments that were far less than what they expected to receive.

Because of these issues and the increasing frequency with which the State is seeing destructive storms like Sandy, Irene, and Lee, it is important to examine how the insurance industry responds to disasters and what steps the industry can take to improve its response in the future.

This task force will in effect create a public/private partnership between both New York State and the insurance industry. Working together, issues brought on by future disasters will addressed in a more effective manner.

Prior legislative history

Skoufis - 01/09/13 referred to insurance Latimer - 03/15/13 REFERRED TO INSURANCE

Fiscal implications for state

To be determined

Local governments

To be determined

Effective date

This act shall take effect immediately