2023 New York Laws › ISC - Insurance › Article 26 - Unfair Claim Settlement Practices; Other Misconduct; Discrimination › 2601 - Unfair Claim Settlement Practices; Penalties.

§  2601.  Unfair claim settlement practices; penalties. (a) No insurer
doing business in this state shall engage  in  unfair  claim  settlement
practices. Any of the following acts by an insurer, if committed without
just  cause  and  performed with such frequency as to indicate a general
business practice, shall constitute unfair claim settlement practices:
(1) knowingly misrepresenting to claimants pertinent facts  or  policy
provisions relating to coverages at issue;
(2)  failing  to  acknowledge  with  reasonable  promptness  pertinent
communications as to claims arising under its policies;
(3) failing to adopt and implement reasonable standards for the prompt
investigation of claims arising under its policies;
(4) not attempting in  good  faith  to  effectuate  prompt,  fair  and
equitable  settlements of claims submitted in which liability has become
reasonably clear, except where there is a reasonable basis supported  by
specific  information  available  for  review by the department that the
claimant has caused the loss  to  occur  by  arson.  After  receiving  a
properly  executed  proof of loss, the insurer shall advise the claimant
of acceptance or denial of the claim within thirty working days;
(5) compelling policyholders to institute suits to recover amounts due
under its policies by  offering  substantially  less  than  the  amounts
ultimately recovered in suits brought by them;
(6)  failing  to promptly disclose coverage pursuant to subsection (d)
or subparagraph (A) of paragraph two of subsection (f) of section  three
thousand four hundred twenty of this chapter;
(7)  submitting  reasonably rendered claims to the independent dispute
resolution process  established  under  article  six  of  the  financial
services law; or
(8)  artificially  deflating  or otherwise lowering cost data used for
adjusted claims, or using cost data that  is  not  appropriate  for  the
region  of  the state where the loss occurred; this shall include but is
not limited to claims adjusted by a person  issued  a  temporary  permit
pursuant  to subsection (n) of section two thousand one hundred eight of
this chapter.
(b) Evidence as to numbers and types of complaints to  the  department
against  an insurer and as to the department's complaint experience with
other insurers writing similar lines of insurance shall be admissible in
evidence in any administrative or judicial proceeding under this section
or article twenty-four or seventy-four of this chapter, but  no  insurer
shall  be  deemed  in  violation of this section solely by reason of the
numbers and types of such complaints.
(c) If it is found, after notice and an opportunity to be heard,  that
an  insurer  has  violated  this section, each instance of noncompliance
with subsection (a) hereof may be treated as  a  separate  violation  of
this  section  for  purposes  of ordering a monetary penalty pursuant to
subsection (b) of section one hundred nine of this chapter. A  violation
of this section shall not be a misdemeanor.