Posted on 25 Jul 2008
New late-notice legislation representing years of work by PIANY on behalf of its members was signed into law by New York Governor Paterson on Wednesday, with provisions of the legislation taking effect Jan. 19, 2009.
This newly-enacted legislation will prohibit insurers from denying claims for purported “late notice” unless they can demonstrate their defense of the claim has been prejudiced by the delay in reporting. PIANY sought a legislative remedy to this growing problem for our agent and broker members and their clients, wherein insurers are denying claims based on “late notice” with increasing frequency.
This practice has caused legal exposure for the agents and brokers who provided the policies under which claims are being denied. Moreover, it’s patently unfair to policyholders who paid their premiums expecting coverage.
PIANY originally discussed the problem with the New York State Insurance Department and key state legislators, and advocated for the approval of legislation which would have addressed the problem in 2007. Following the governor’s veto of that bill (for reasons unrelated to the late-notice provisions), PIA worked to craft a bill that could succeed in winning enactment.
PIANY applauds and appreciates the work of the sponsors of this proposal in finally bringing New York in line with the majority of other states, and to our members who responded to our PIANY grassroots alert and contacted the governor’s office in support of this legislation.