S5798   LACK
LACK, DeFRANCISCO, FARLEY, FUSCHILLO, HOFFMANN, KUHL, LARKIN, LAVALLE, MARCELLINO,
MAZIARZ, MORAHAN, PADAVAN, SALAND, SPANO, TRUNZO, VOLKER, WRIGHT
Add S2613, Ins L
Authorizes the superintendent, pursuant to regulations promulgated, to prohibit insurance contracts from exempting any claim
by the insured for a loss incurred as a result of terrorism; further defines terrorism.

STATUS:
Insurance Law
TITLE....Prohibits insurance contracts from exempting any claim by the insured for a loss incurred as a result of terrorism
09/28/01         REFERRED TO RULES
 

BILL TEXT:

 
                STATE OF NEW YORK
       ________________________________________________________________________
 
                                         5798
 
                              2001-2002 Regular Sessions
 
                    IN SENATE
 
                                  September 28, 2001
                                      ___________
 
       Introduced  by  Sens.  LACK,  FARLEY,  FUSCHILLO, KUHL, LARKIN, LAVALLE,
         MARCELLINO, MAZIARZ, McGEE, MORAHAN, NOZZOLIO, PADAVAN, SALAND,  TRUN-
         ZO,  VOLKER  -- read twice and ordered printed, and when printed to be
         committed to the Committee on Rules
 
       AN ACT to amend the insurance law, in relation to terrorism  and  insur-
         ance contracts
 
         The  People of the State of New York, represented in Senate and Assem-
       bly, do enact as follows:
 
    1    Section 1. The insurance law is amended by adding a new  section  2613
    2  to read as follows:
    3    §  2613.  Terrorism  attacks.  Notwithstanding any other provisions of
    4  law, no insurance policy or contract shall be made, issued or  delivered
    5  in  this state containing a term, provision or rider exempting any claim
    6  filed under such policy or contract by an insured, claimant  or  policy-
    7  holder  based upon a loss incurred as a result of terrorism. Any refusal
    8  to pay a current claim based upon a loss incurred as a result of terror-
    9  ism shall be voided by the superintendent as against public policy.  For
   10  the  purposes of this section, "terrorism" means activities that involve
   11  a violent act or acts dangerous to human life that are in  violation  of
   12  the criminal laws of this state and are intended to intimidate or coerce
   13  a  civilian  population, influence the policy of a unit of government by
   14  intimidation or coercion, or affect the conduct of a unit of  government
   15  by  murder,  assassination,  or  kidnapping.    The superintendent shall
   16  promulgate regulations pursuant to the provisions of this section.
   17    § 2. This act shall take effect immediately; provided that the  super-
   18  intendent  of  insurance  is authorized and directed, within 30 days, to
   19  promulgate any and all rules and regulations and take any other measures
   20  necessary to implement the provisions of this act.
 
 
        EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD13834-03-1
 

SPONSORS MEMO:
                                   NEW YORK STATE SENATE
                           INTRODUCER'S MEMORANDUM IN SUPPORT
                           submitted in accordance with Senate Rule VI. Sec 1

 
BILL NUMBER: S5798
 
SPONSOR: LACK

 
TITLE OF BILL:  An act to amend the insurance law, in relation to
terrorism and insurance contracts
 
 
PURPOSE: To prohibit the sale or making of any insurance contract or
policy which exempts a claim based on a loss incurred as a result of
terrorism. To allow the superintendent to void any refusal to pay a
current claim based on a loss incurred as a result of terrorism.
 
 
SUMMARY OF PROVISIONS: A new ? is added to the Insurance Law which
would prohibit the sale or making of any insurance contract or policy
which exempts a claim based on a loss incurred as a result of terrorism
and allow the superintendent to void any refusal to pay a current claim
based on a loss incurred as a result of terrorism. The superintendent
has 30 days from its effective date to promulgate regulations to imple-
ment the provisions of this chapter.
 
 
JUSTIFICATION: Since the destruction of the World Trade Center on
September 11th as a result of a terrorist attack, the Legislature has
learned that some insurance policies are written with terms excluding
claims for a loss incurred as a result of a terrorist attack. In the
shadow of these events, the families of those who lost their lives have
suffered enough. The failure to pay a claim based on such a loss shocks
the conscience and must be viewed as an egregious violation of good
public policy. The superintendent must have the power to vitiate such
terms and ameliorate the further financial devastation of our fellow New
Yorkers.
 
Furthermore, as the unfortunate likelihood of future attacks continues,
prospectively written policies should be prohibited from containing any
clause, term or provision which would exclude the disbursement of a
benefit for a claim based on a loss incurred as a result of terrorism.
 
 
FISCAL IMPLICATIONS: None.
 
 
PRIOR LEGISLATIVE HISTORY: New bill.
 
 
EFFECTIVE DATE: This act shall take effect immediately; provided that
the superintendent of insurance is authorized and directed, within 30
days, to promulgate any and all rules and regulations and take any other
measures necessary to implement the provisions of this act.