What's happening
This bill requires the New York superintendent of financial services to create standardized definitions for common terms in certain personal and commercial insurance policies.
Why it matters
Greater Consistency and Clarity. By requiring standardized definitions for common insurance terms, the bill aims to reduce confusion and ambiguity for policyholders, making it easier to understand what their insurance actually covers.
Enhanced Consumer Protections. Insurers would only be allowed to use alternative definitions if they are not less favorable to policyholders, potentially preventing companies from using vague or unfavorable language to limit payouts or deny claims.
Improved Comparability. Standardized language across different insurance products would make it simpler for individuals and businesses to compare policies from different insurers, supporting more informed decision-making.
Regulatory Accountability. The superintendent of financial services is given a set deadline to implement these changes, ensuring timely action and adding pressure for regulatory follow-through.
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Who cares
Headline styles
Standardize Insurance Policy Terms
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Standardize Insurance Policy Terms
Assembly Floor Calendar · Sponsor Kevin Cahill
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3501
2019-2020 Regular Sessions
IN SENATE
February 8, 2019
Introduced by Sens. BRESLIN, SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to requiring the superintendent of financial services to promulgate regulations which provide standardized definitions for commonly used terms and phrases in certain insurance policies
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 3425 of the insurance law is amended by adding a new subsection (t) to read as follows:
(t) Within six months after the effective date of this subsection, the superintendent shall promulgate regulations in accordance with section two hundred two of the state administrative procedure act which provide standardized definitions for commonly used terms and phrases in policies that provide coverage for personal lines insurance as defined in paragraph two of subsection (a) of this section. Such standardized terms and phrases shall be used in such policies issued or delivered in this state on or after the date the regulations are finalized, which shall be no later than January first, two thousand twenty-one. An insurer may use alternative definitions, so long as such definitions are not any less favorable to the policyholder or claimant, as determined by the superintendent.
§ 2. Section 3426 of the insurance law is amended by adding a new subsection (p) to read as follows:
(p) Within six months after the effective date of this subsection, the superintendent shall promulgate regulations in accordance with section two hundred two of the state administrative procedure act which provide standardized definitions for commonly used terms and phrases in policies that provide coverage for commercial lines insurance policies that cover loss or damage to real property, personal property, or other liabilities for loss or damage to property. Such standardized terms and phrases
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01962-01-9
S. 3501 2
shall be used in such policies issued or delivered in this state on or after the date the regulations are finalized, which shall be no later than January first, two thousand twenty-one. An insurer may use alternative definitions, so long as such definitions are not any less favorable to the policyholder or claimant, as determined by the superintendent.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to requiring the super- intendent of financial services to promulgate regulations which provide standardized definitions for commonly used terms and phrases in certain insurance policies
Summary of provisions
This bill would require the Superintendent of Financial Services, within six months of the effective date of this bill, to promulgate regulations which provide standardized definitions for commonly used terms and phrases found in homeowners policies and commercial lines policies that provide coverage for loss or damage to real property, personal property, or other liabilities for loss or damage to property. Insurers would be required to use the standardized terms and phrases in policies issued or delivered on or after the date, the regulations are finalized, which would be no later than January 1, 2021. The bill would also allow insur- ers to use alternative definitions at the discretion of the Superinten- dent, so long as such definitions are not any less favorable to the policyholder or claimant than those required under the regulations.
Justification
Homeowners and commercial insurance policies provide necessary coverage to individuals and business owners that can prove vital in the aftermath of a disaster such as Superstorm Sandy. However, these policies can also be complex, and commonly used terms and phrases may have different mean- ings when used in different policies. This can cause confusion amongst policyholders, especially following a disaster when they need their insurance coverage the most. This bill would address this by ensuring that all homeowners policies and certain commercial policies contain standardized terms and phrases.
Legislative history
S.2809a of 2017-18; S.4221 of 2015-16; S.5579 of 2013-14.
Fiscal implications
To be determined.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.