A.1092-A (Scoufis) / S.3413-A (Carlucci)


Vice President of Government Affairs


A.1092-A (Scoufis) / S.3413-A (Carlucci)


Insurance Settlement Standards



The Business Council opposes this legislation which sets new standards for prompt investigation and settlement of claims arising from state emergencies.

Whenever the local, state or federal government declares a state of emergency, insurers must inform policyholders within 15 days from the time a claim is filed, if the claim is accepted or rejected. The insurer would be required to pay the claim within 3 business days of the settlement.

This bill imposes unreasonable and unnecessary requirements on the settlement process. The bill presumes that substantial problems existed in handling claims following recent natural disasters like Superstorm Sandy. In fact, the Department of Financial Services' own Sandy report card on insurance performance shows that out of over 400,000 filed claims as of May 17, 2013, more than 380,000 have been closed with more than 310,000 closed with payment. Less than 1% of claims filed were followed by a complaint. The industry did a remarkable job under very difficult circumstances.

This arbitrary time frame would also have the unintended effect of slowing down the settlement for heavily damaged properties that need a quick response. Because all claims would have to be inspected within a fairly quick time frame, insurance adjusters would no longer be in a position to prioritize the most severe situations. With only so many claims adjusters in the field, many of the hardest hit property owners would face delayed claims payments as adjusters visit every effected location.

This bill also fails to take into account the fact that some locations are not easily reachable following a natural disaster. Roads and highways are often severely damaged, making it impossible to inspect properties within the regulated time frame as proposed in this bill.

This bill seeks to correct problems that do not exist. The insurance industry, as judged by the public, policy holders and the state's top insurance regulator, responded remarkably well following storm Sandy. Legislation such as this could lead to a much less competitive property insurance market in New York, with negative results for residents and businesses.

For these reasons we urge the legislature to disapprove A.1092-A/S.3413-A.