S 7344: Establishes the New York insurance underwriting transparency act; requires material changes to an insured's automobile or homeowners insurance to be explained in clear and useful language.

  
  STATE OF NEW YORK ________________________________________________________________________ 7344 2025-2026 Regular Sessions  IN SENATE April 10, 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 the New York insurance underwriting transparency act 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 article 6 to 2 read as follows: 3 ARTICLE 6 4 NEW YORK INSURANCE UNDERWRITING TRANSPARENCY ACT 5 Section 601. Short title. 6 602. Purpose. 7 603. Scope. 8 604. Definitions. 9 605. Transparency requirements. 10 606. Rules and regulations. 11 § 601. Short title. This article shall be known and may be cited as 12 the "New York Insurance Underwriting Transparency Act". 13 § 602. Purpose. The purpose of this legislation is to provide personal 14 auto and homeowners insurance consumers with clear and useful informa- 15 tion explaining the basis for when a material change is made to a 16 consumer's policy. 17 § 603. Scope. (a) This article applies to personal automobile and 18 homeowner's policies that are underwritten on an individual basis for an 19 individual, family, or household. 20 (b) This article shall not apply to notices required by the federal 21 Fair Credit Reporting Act (15 U.S.C. 1681 et seq.). 22 § 604. Definitions. For the purposes of this article, the following 23 terms shall have the following meanings: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11623-01-5 
 S. 7344 2 1 (a) "Insured" means an individual entitled to coverage under a 2 personal automobile or homeowner's insurance policy. 3 (b) (1) "Material change" means, in relation to insurance in 4 connection with a personal automobile or homeowner's policy: 5 (A) a nonrenewal or cancellation; 6 (B) an increase of more than ten percent over the expiring premium; 7 (C) a reduction in coverage; or 8 (D) another adverse or unfavorable change in the terms of coverage or 9 amount. 10 (2) The term "material change" shall not include: 11 (A) An increase in the insurer's filed rate plan and automatic infla- 12 tionary increases; 13 (B) An additional premium due to a change initiated by the insured, 14 such as: 15 (i) adding or removing vehicles or drivers; 16 (ii) adding an endorsement; 17 (iii) adding additional coverages; 18 (iv) adding covered premises; or 19 (v) increasing coverage limits or deductibles; and 20 (C) An additional premium due to a change in risk exposure as a result 21 of the insured's participation in a usage based or telematics insurance 22 program. 23 § 605. Transparency requirements. (a) An insurer that makes a material 24 change to an insured's personal automobile or homeowner's policy shall 25 provide a written notice to the insured that: 26 (1) explains the principal factors for the material change; or 27 (2) states that the insured has the right to request and obtain an 28 explanation of the principal factors for the material change. 29 (b) An insured who receives a notice of a material change described in 30 paragraph two of subsection (a) of this section may submit to the insur- 31 er a written request for an explanation of the principal factors for the 32 material change. 33 (c) Upon receiving a request for an explanation under subsection (b) 34 of this section, the insurer shall provide a written notice to the 35 insured explaining the principal factors for the material change. 36 (d) An insurer shall provide a copy of a written notice provided under 37 paragraph one of subsection (a) or subsection (c) of this section to the 38 insurance producer, if any, who: 39 (1) represented the insured in obtaining coverage from the insurer, or 40 represented the insurer in regard to the providing of coverage to the 41 insured; and 42 (2) is not an employee, an exclusive agent, or a captive agent of the 43 insurer. 44 (e) A written notice: 45 (1) provided under subsection (a) or (c) of this section, or a written 46 request submitted under subsection (b) of this section, shall be 47 provided by first class mail or electronic delivery to an electronic 48 mail address at which a party has consented to receive notices or docu- 49 ments; 50 (2) provided under subsection (d) of this section may be provided to 51 the insurance producer via the insurer's portal for producer communi- 52 cations. 53 (f) A written notice provided under paragraph one of subsection (a) or 54 subsection (c) of this section shall: 
 S. 7344 3 1 (1) be sufficiently clear and use language sufficiently specific to 2 enable the insured to identify the basis for the insurer's decision to 3 make the material change; 4 (2) include a description of the principal factors most heavily 5 weighed by an insurer in making a material change, listed in no partic- 6 ular order; and 7 (3) provide a point of contact through which the insured may discuss 8 the reasons for the material change. 9 (g) The following type of statements shall not be considered to meet 10 the requirements set forth in subsection (f) of this section: 11 (1) the material change is based on the insurer's internal standards, 12 policies, or models; 13 (2) the insured failed to achieve a particular score on the insurer's 14 scoring system; or 15 (3) one containing generalized terms, such as "poor credit history", 16 "poor credit rating", or "poor insurance score". 17 (h) The requirements set forth in this section do not replace and are 18 in addition to any other requirements under this chapter. 19 (i) Nothing in this article shall prohibit an insurer from voluntarily 20 providing the disclosures required by this article. 21 § 606. Rules and regulations. The superintendent may adopt rules or 22 regulations as the superintendent considers appropriate to carry out the 23 provisions of this article. 24 § 2. This act shall take effect one year after it shall have become a 25 law and shall apply to any policy issued, amended, or renewed on and 26 after such effective date.