S 5048: Relates to contractual liability insurance policies; provides that each provider may maintain a maximum of five service contract reimbursement insurance policies insuring its service contracts actively offered.

  
  STATE OF NEW YORK ________________________________________________________________________ 5048 2025-2026 Regular Sessions  IN SENATE February 18, 2025 ___________ Introduced by Sen. BAILEY -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to contractual liability insurance policies The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 1 of subsection (c) of section 7903 of the insur- 2 ance law, as amended by chapter 578 of the laws of 2000, is amended to 3 read as follows: 4 (1) insure the performance of all its obligations under all service 5 contracts pursuant to [a] one or more service contract reimbursement 6 insurance [policy] policies issued by [an insurer] one or more insurers 7 authorized to issue service contract reimbursement insurance in this 8 state or procured by an excess line licensee pursuant to section two 9 thousand one hundred eighteen of this chapter. Each service contract 10 reimbursement insurance policy shall obligate the insurer that issued 11 such policy to either discharge the obligations and liabilities of such 12 provider under the terms of the service contracts issued by such provid- 13 er, including the return of unearned provider fees upon any termination 14 or cancellation of service contracts, in the event of non-performance of 15 any such obligations or liabilities by such provider or indemnify the 16 provider for losses sustained by reason of the performance of such 17 provider's obligations under service contracts issued pursuant to this 18 article. In the event the provider fails to insure its obligations 19 pursuant to this paragraph or in the event that such insurance shall 20 lapse or be terminated, the provider shall comply with either paragraph 21 two or three of this subsection within forty-five days of the insurance 22 lapse or termination; 23 § 2. Subsection (b) of section 7905 of the insurance law, as added by 24 chapter 614 of the laws of 1997, is amended to read as follows: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01514-01-5 
 S. 5048 2 1 (b) Service contracts insured under [a] one or more service contract 2 reimbursement insurance [policy] policies pursuant to [paragarph] para- 3 graph one of subsection (c) of section seven thousand nine hundred three 4 of this article shall contain a statement in substantially the following 5 form: "Obligations of the provider under this service contract are 6 insured under a service contract reimbursement insurance policy. If the 7 provider fails to pay or provide service on a claim within sixty days 8 after proof of loss has been filed, the contract holder is entitled to 9 make a claim directly against the insurer under the service contract 10 reimbursement insurance policy." The service contract shall also state 11 the name and address and a toll-free telephone number of the insurer 12 under [the] each related service contract reimbursement insurance poli- 13 cy. 14 § 3. This act shall take effect immediately.