Expand Insurance Price Transparency

Section 1. The insurance law is amended by adding a new article 6 to read as follows:

ARTICLE 6

AUTOMOBILE INSURANCE CONSUMER INFORMATION Section 601. Title; legislative declaration and purpose.

602. Automobile insurance consumer information and complaint

rankings.

603. Consumer rating factors.

604. Disclosure procedures.

605. Noninterference with obtaining coverage.

606. Public outreach.

§ 601. Title; legislative declaration and purpose. This article shall be known and may be cited as the "automobile insurance consumer information act".

The legislature finds and declares that automobile insurance is required by law for all residents who drive and that the cost of automobile insurance represents a substantial expense for many consumers. The legislature further finds that the premium costs for any given individual for identical insurance coverage from different licensed insurers can vary widely and that wide variations also exist in the quality of service provided by insurers as measured by the department's annual

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD06853-01-9

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complaint handling rankings. In addition, the legislature finds that few consumers are aware of these wide cost and quality of service variations, that as a result consumers as a group may pay hundreds of millions of dollars annually for overpriced policies and that individual consumers may encounter unnecessary difficulty in having their automobile insurance claims and complaints handled expeditiously. The legislature further finds and declares that it intends for the superintendent and the department to have broad authority under this article to establish mechanisms to fully inform consumers as to which policies are available to them at the lowest possible cost and which insurers provide the highest quality of service. The legislature intends with this article to create certain disclosure requirements that will make such information more readily available to all consumers. Increased availability of information is intended to make the automobile insurance system more competitive with respect to both cost of coverage and the quality of service.

§ 602. Automobile insurance consumer information and complaint rankings. (a) The superintendent shall maintain a database containing nonbusiness automobile insurance rate information and complaint rankings for all companies licensed to do business in the state.

(b) Every person, upon making an inquiry to the department and providing the information specified in section six hundred three of this article, shall be mailed within five business days, or, at the option of the person, receive at the time of such inquiry:

(1) The names, addresses, telephone numbers and, if appropriate, web site addresses of the five companies having the lowest premiums for the requested package of coverage that would write insurance for such person; the total cost for the package of coverage from each such insurer; and the most recent complaint ranking of each such insurer;

(2) The names, addresses, telephone numbers and, if appropriate, web site addresses of the five companies having the best complaint rankings that would write insurance for such person, and the total cost for the package of coverage from each insurer listed;

(3) An explanation of how to obtain from such companies the names, addresses, telephone numbers, and, if appropriate, web site addresses of those agents, brokers or sales representatives of such companies that are situated in a location reasonably convenient to the person; and

(4) Until such database is established, the department shall provide persons making an inquiry the department's Annual Ranking of Automobile Insurance Complaints and Consumers Guide to Auto Insurance. After the database is established, if the person making an inquiry prefers, the department may provide, in lieu of the information specified in paragraphs one, two and three of this subsection, the department's Annual Ranking of Automobile Insurance Complaints, and Consumer Guide to Auto Insurance.

§ 603. Consumer rating factors. In order to receive the list of lowest cost insurers described in section six hundred two of this article, the person shall provide the following information:

(a) The place in which the vehicle is garaged or stored, or other information needed to determine geographical territory;

(b) The age, sex, marital status and other information needed to determine the driver class of the principal and occasional operators;

(c) The make, model and year of the automobile;

(d) Information relating to qualification for discounts;

(e) Information relating to surcharges or credits based on driving record or driving courses taken;

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(f) Desired effective date of the policy;

(g) Desired coverages; and

(h) Such other information as the superintendent may by regulation require.

§ 604. Disclosure procedures. Every policy of nonbusiness automobile insurance delivered, issued for delivery, renewed or issued for renewal in this state shall include a notice prescribed by the superintendent in regulation of the availability of the information and procedure for obtaining such information described in sections six hundred two and six hundred three of this article. Such notice shall include the department's address, telephone number and web site address.

§ 605. Noninterference with obtaining coverage. No applicant for automobile insurance shall be prevented or delayed in effecting or applying for coverage by the requirements of section six hundred four of this article. In those cases where, prior to or at the time an application is taken, it is impractical to provide any disclosure documents prescribed by section six hundred four of this article, such documents shall be furnished as soon thereafter as practical and, in any event, no later than at the time the policy is delivered. Where any such document is not provided as required by section six hundred four of this article, the applicant may, no later than thirty days following receipt of the policy, and notwithstanding the provisions of section three thousand four hundred twenty-eight of this chapter, return the policy for a pro rata refund of premiums paid. A clear and conspicuous written notice explaining this refund provision, in language promulgated by the superintendent, shall be delivered with the policy.

§ 606. Public outreach. The department shall conduct public education and outreach to inform consumers as to the availability of and how to access the consumer information prescribed by this article. Notwithstanding any inconsistent law to the contrary, no advertisement utilizing electronic means, (including but not limited to radio, television and the internet) public service announcement or other broadcast produced or distributed pursuant to this section shall feature the likeness, picture or voice of a statewide elected official or a family member of such official.

§ 2. If any provision of section one of this act or the application thereof to any person or circumstances be adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the provision or application or persons or circumstances directly involved in the controversy in which such judgment shall have been rendered and shall not affect or impair the validity of the remainder of this act or the application thereof to other persons or circumstances.

§ 3. The executive law is amended by adding a new article 44-A to read as follows:

ARTICLE 44-A

OFFICE OF PUBLIC INSURANCE CONSUMER ADVOCATE Section 945. Office of public insurance consumer advocate.

946. Public insurance consumer advocate.

947. Powers and duties.

§ 945. Office of public insurance consumer advocate. There is hereby created in the executive department an independent office of public insurance consumer advocate (hereinafter referred to in this article as "office") to represent the interests of nonbusiness automobile and health insurance consumers in the state.

§ 946. Public insurance consumer advocate. 1. The governor, with the advice and consent of the senate, shall appoint a public insurance

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consumer advocate (hereinafter referred to in this article as "advocate") who shall serve as the executive director of the office of public insurance consumer advocate and shall receive an annual salary to be fixed by the governor within the amount available therefor by appropriation.

2. (a) To be eligible to serve as advocate, a person must be a resident of the state. The advocate shall be a person who has demonstrated a strong commitment to and involvement in efforts to safeguard the rights of the public, and who possesses the knowledge and experience necessary to practice effectively in insurance proceedings.

(b) A person shall not be eligible for appointment as advocate if such person or the person's spouse:

(i) is employed by or participates in the management of a business entity or other organization regulated by the department of financial services or receiving funds from such department;

(ii) owns or controls, directly or indirectly, more than ten percent interest in a business entity or other organization regulated by the department of financial services or receiving funds from the department of financial services or the office;

(iii) uses or receives a substantial amount of tangible goods, services or funds from the department of financial services or the office, other than compensation or reimbursement authorized by law for the department of financial services or office membership, attendance or expenses.

3. The advocate shall serve for a term of two years.

4. It shall be a ground for removal from office if the advocate:

(a) does not have at the time of appointment the qualifications required by this section;

(b) does not maintain during service as advocate the qualifications required by this section;

(c) violates a prohibition established by this section; or

(d) cannot discharge the advocate's duties for a substantial part of the term for which the advocate is appointed because of illness or disability.

5. The validity of an action of the office shall not be affected by the fact that it is taken when a ground for removal of the advocate exists.

6. (a) A person shall not serve as the advocate or act as the general counsel for the office of advocate if the person is required to register as a lobbyist pursuant to article one-A of the legislative law.

(b) A person serving as the advocate shall not, for a period of two years after the date the person ceases to be an advocate, represent any person in a proceeding before the superintendent of financial services or the department of financial services or receive compensation for services rendered on behalf of any person regarding a case before the superintendent of financial services or the department of financial services.

(c) A person shall not serve as the advocate or be an employee of the office if the person is an officer, employee or paid consultant of a trade association in the field of insurance.

(d) A person who is the spouse of an officer, manager or paid consultant of a trade association in the field of insurance shall not serve as the advocate and may not be an office employee.

(e) For the purposes of this section, a trade association is a nonprofit, cooperative and voluntarily joined association of business or professional competitors designed to assist its members and its industry

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or profession in dealing with mutual business or professional problems and in promoting their common interest.

§ 947. Powers and duties. 1. The advocate, as executive director of the office, shall be charged with the responsibility of administering, enforcing and carrying out the provisions of this article, including preparation of a budget for the office, employing all necessary professional, technical and other employees to carry out provisions of this article, approval of expenditures for professional services, travel, per diem and other actual and necessary expenses incurred in administering the office. The compensation of employees of the office shall be fixed by the advocate within the appropriation provided therefor.

2. The office shall file annually with the governor, temporary president of the senate and speaker of the assembly a complete and detailed written report accounting for all funds received and disbursed by the office during the preceding fiscal year. The annual report shall be in the form and reported as part of the executive budget.

3. All money paid to the office under this article shall be deposited in the state treasury.