STATE OF NEW YORK ________________________________________________________________________ 1508 2023-2024 Regular Sessions IN SENATE January 12, 2023 ___________ 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 requiring all motor vehicle insurers to file annual financial statements and detailed claim data with the superintendent of financial services The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative intent. The legislature hereby finds and 2 declares that insurance companies issuing motor vehicle policies in this 3 state owe a duty to those they insure and to those who may in the future 4 be insured by them, to fully disclose in a public and transparent manner 5 all elements relating to their financial condition and solvency. Such 6 obligation is essential in maintaining the public's inherent right to 7 know the details and specifics of such insurer's expenses and claims 8 history on a global basis so, as consumers, they can make a reasoned and 9 rational selection of the insurer with which they intend to do business. 10 As premiums escalate, it is more incumbent on such insurers to honor 11 this obligation by making the public aware of the rationale they use in 12 determining the premiums they charge, and it is the sense of the legis- 13 lature that where the data used is available, it should be disclosed in 14 an open and public manner. 15 § 2. The insurance law is amended by adding a new section 346 to read 16 as follows: 17 § 346. Financial statement and detailed claim data to be filed with 18 the department. (a) For purposes of this section, the term "insurer" 19 shall mean any person, corporation, association or other business entity 20 authorized to issue a motor vehicle insurance policy in this state. 21 (b) On or before April first of each year, every insurer shall provide 22 the superintendent with a detailed financial statement to supplement and 23 expand upon the information contained in the statutory annual statement 24 for the most recently concluded calendar year. The financial statement EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04474-01-3
S. 1508 2 1 shall contain information on a combined basis for all lines of insurance 2 as well as information separately for each of the following lines of 3 insurance: (1) private passenger automobile other liability, (2) private 4 passenger automobile personal injury protection, (3) private passenger 5 automobile physical damage, (4) commercial automobile other liability, 6 (5) commercial automobile personal injury protection, and (6) commercial 7 automobile physical damage. That financial statement shall include the 8 entirety of its business activities conducted in this state, or 9 conducted outside this state, but having a nexus to insurance policies 10 or contracts of insurance insuring persons or risks in this state, 11 consistent with the procedures for determining New York state insurance 12 business for statutory annual statement reporting purposes. Such state- 13 ment shall be in a form determined by the superintendent. The form shall 14 be sufficiently itemized in a manner that allows for an actuarially 15 sound analysis of the income realized by the insurer from all sources 16 during such year, including but not limited to premiums, investment 17 income, profit from sale of assets and any other category or categories 18 of income as determined by the superintendent to reflect the full 19 disclosure requirements of this section. At a minimum, such information 20 shall consist of the items set forth in the statement of income, exclud- 21 ing the capital and surplus account section of the property/casualty 22 statutory annual statement, as applicable to the insurer's New York 23 state business, as well as the other information delineated in this 24 subsection. Such financial statement shall also contain a comprehensive 25 and detailed disclosure of the insurer's expenses actually incurred and 26 paid during such calendar year, to include normal business expenses, 27 salaries, commissions, consulting fees, legal expenses, advertising 28 costs and any other category deemed pertinent to the intent of this 29 section. At a minimum, the expense information required shall consist of 30 the items set forth in the underwriting and investment exhibit - part 3 31 - expenses of the property / casualty statutory annual statement, as 32 applicable to the insurer's New York state business. With respect to 33 salaries (including all other forms of compensation), each insurer shall 34 itemize the salary of the twenty most highly compensated employees of 35 such insurer during such year, provided that the name of such employees 36 need not be disclosed. Such financial statement shall also provide the 37 public with a synopsis of claims or settlements paid pursuant to such 38 policies or contracts, listing the total of such claims and settlements 39 by type of insurance or the risk insured. At a minimum, the claim infor- 40 mation required shall consist of the items set forth in the exhibit of 41 premiums and losses of the property / casualty statutory annual state- 42 ment, as applicable to the insurer's New York state business and identi- 43 fied and categorized separately for each zip code in this state. Such 44 financial statement shall be signed and attested as full, complete and 45 accurate by the chief executive officer of the insurer, and he or she 46 shall be held personally responsible with respect to the accuracy of the 47 content of such statement. The superintendent shall provide insurers 48 with a method to submit their financial statements electronically via 49 the internet, which method shall include instructions relating to the 50 use of an electronic signature which shall be subject to, and submitted 51 in accordance with section three hundred sixteen of this article; 52 provided, however, that no exception authorized in such section may be 53 requested or granted. 54 (c) On or before April first of each year, every insurer shall provide 55 the superintendent with detailed closed claim information for the same 56 lines of insurance provided for in subsection (b) of this section for
S. 1508 3 1 the most recently concluded calendar year. Until the superintendent 2 promulgates data collection forms and procedures for private passenger 3 automobile insurance, data shall be collected using, at a minimum, the 4 most recent publicly available forms used by the Insurance Research 5 Council for its Auto Injury Survey. The superintendent may require addi- 6 tional information beyond that which is contained in such survey if he 7 or she deems it necessary and warranted. Instead of collecting informa- 8 tion for all private passenger automobile claims the superintendent may 9 collect data for a statistically valid sample of claims. The minimum 10 sample size shall represent five per centum of the number of claims for 11 each year. Until the superintendent promulgates data collection forms 12 and procedures for commercial automobile insurance, data shall be 13 collected using information which may be available from any other 14 source. For commercial automobile claims, instead of collecting informa- 15 tion for all claims the superintendent may collect data for a statis- 16 tically valid sample of claims. The minimum sample size shall represent 17 ten per centum of the number of claims for each year for such line of 18 insurance. Such detailed claim data shall be signed and attested as 19 full, complete and accurate by the chief executive officer of the insur- 20 er, and he or she shall be held personally responsible with respect to 21 the accuracy of the data. The detailed claim data shall be submitted in 22 the same manner as provided for in subsection (b) of this section. 23 (d) The superintendent shall, in both written form and as part of the 24 department web site, make such financial statements and detailed claim 25 information available to the public. The detailed claim information 26 shall be provided in aggregate form for all insurers combined without 27 any identification of a specific claim to a specific insurer. None of 28 the publicly available detailed claim information shall identify the 29 individual insurer, defendant or plaintiff associated with the claim. 30 Such financial statements and detailed claim information shall be deemed 31 a public document and no person shall be required to file a request for 32 such financial statements pursuant to article six of the public officers 33 law in order to receive a copy thereof, but upon request and payment of 34 the fee for copying such document, it shall be provided. With respect to 35 the electronic copy of such financial statements and detailed claim 36 information, which shall be accessible on the department's web site, the 37 department shall highlight the availability of such information to the 38 public on such web site, and the link to each insurer's financial state- 39 ment and the aggregated detailed claim information shall be accessible 40 in a simple and easy manner. Both the financial statement and aggregated 41 detailed claim information on the department web site shall be available 42 in EXCEL format, in addition to any other format the superintendent 43 determines is appropriate. 44 (e) On or before July first of each year, the superintendent shall 45 issue reports summarizing and explaining the information collected from 46 the financial statements and the detailed claim information. Copies of 47 such reports shall be forwarded to the temporary president of the 48 senate, the speaker of the assembly and the chairs of both the senate 49 and assembly insurance committees. Such reports shall be public docu- 50 ments and shall be accessible both in paper copy and on the department's 51 web site. 52 (f) Where an insurer fails or refuses to provide the superintendent 53 with a full and complete disclosure as required by this section, the 54 superintendent shall take such action he or she deems necessary to bring 55 the insurer into full compliance. Such action may include imposition of 56 a civil penalty of up to fifty thousand dollars assessed against the
S. 1508 4 1 insurer for each violation, temporary suspension of any right to issue 2 additional policies or contracts until the insurer brings itself into 3 full compliance, an audit of the insurer's records by the department or 4 its designated representative to obtain the information and which audit 5 shall be paid for by the insurer, or any other civil remedy the super- 6 intendent deems warranted or necessary until such insurer fully 7 complies. In addition the officer whose signature is affixed to such 8 statement may be personally penalized to the same extent. 9 (g) The superintendent may promulgate such rules and regulations he or 10 she deems necessary for the proper administration of the provisions of 11 this section, and such rules and regulations may be promulgated on an 12 emergency basis if the superintendent warrants such action to be neces- 13 sary. 14 § 3. Severability. If any item, clause, sentence, subparagraph, subdi- 15 vision or other part of this act, or the application thereof to any 16 person or circumstances shall be held to be invalid, such holding shall 17 not affect, impair or invalidate the remainder of this act but it shall 18 be confined in its operation to the item, clause, sentence, subpara- 19 graph, subdivision or other part of this act directly involved in such 20 holding, or to the person and circumstances therein involved. 21 § 4. This act shall take effect immediately.