Bill > S03673

This bill amends New York insurance law to establish clear guidelines for insurers' claim settlement practices and create legal recourse for policyholders who experience unfair treatment. Specifically, the bill makes an insurer liable for damages if it refuses to pay or unreasonably delays payment without substantial justification. The bill enumerates six specific scenarios that would constitute unsubstantial justification, such as intentionally providing inaccurate information, failing to settle claims in good faith, not providing timely written claim denials, and not making a final claim determination within six months. If a policyholder proves an insurer's violation, they can recover not just the original claim amount, but also interest, costs, compensatory and consequential damages, attorneys' fees, and punitive damages (capped at twice the value of the covered loss). Before filing a lawsuit, policyholders must first submit a detailed civil remedy notice to the insurer and the department, giving the insurer 60 days to cure the violation. The law is designed to protect policyholders by creating a clear legal standard for insurers' claim handling practices and providing meaningful remedies for unfair treatment. The bill will take effect on the first day of January following its passage and will apply to all insurer actions occurring on or after that date.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/S3673