Unfair Claim Settlement Practices and Interest Upon Settlement

What this document is

New York Insurance Law Article 26 - Unfair Claim Settlement Practices and Interest Upon Settlement (Secs. 2601-2620) is a state statute published by New York State Senate, NYS Open Legislation (nysenate.gov). It is one of the New York documents that insurance license exam questions are written from, including new york life & health, new york property & casualty, new york personal lines practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• N.Y. Ins. Law Article 26 § 2618(d) (Payment of Agreed Settlement Amounts)

  “Every insurer shall pay any amount finally agreed upon in settlement of all or part of any claim not later than four business days from the receipt of such agreement by the insurer, or from the date of the performance by the claimant of any condition set by such agreement, whichever is later,...”

• N.Y. Ins. Law Article 26 § 2618(c)(5) (Contents of a Claim Rejection Notice)

  “In any case where the claim is rejected by the insurer, the insurer shall notify the claimant, or the claimant's authorized representative, in writing, of all applicable policy provisions and deadlines by which a claimant may sue the insurer. Any notice rejecting any element of a claim involving...”

• N.Y. Ins. Law Article 26 § 2601(a)(5) (Compelling Suit by Inadequate Offers)

  “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...”

• N.Y. Ins. Law Article 26 § 2601(a) (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:”

• N.Y. Ins. Law Article 26 § 2601(c) (Penalties for Unfair Claim Settlement Practices)

  “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...”

• N.Y. Ins. Law Sec. 2610(a), (b) (Collision or comprehensive coverage on motor vehicles; claims; repairs)

  “(a) Whenever a motor vehicle collision or comprehensive loss shall have been suffered by an insured, no insurer providing collision or comprehensive coverage therefor shall require that repairs be made to such vehicle in a particular place or shop or by a particular concern.”

• N.Y. Ins. Law Sec. 2601(b) (Unfair claim settlement practices; evidence of complaints)

  “(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...”

• N.Y. Ins. Law Sec. 2610(b) (Collision or comprehensive coverage on motor vehicles; claims; repairs)

  “In processing any such claim (other than a claim solely involving window glass), the insurer shall not, unless expressly requested by the insured, recommend or suggest repairs be made to such vehicle in a particular place or shop or by a particular concern.”

• N.Y. Ins. Law Sec. 2604 (False statements as to insurers)

  “No person shall either (i) wilfully make, circulate or transmit to another any statement written, printed or by word of mouth, which is untrue in fact and is directly or by inference derogatory to the financial condition, or affects the solvency or financial standing, of any insurer doing business in this state”

• N.Y. Ins. Law Sec. 2608(a), (b) (Discrimination because of treatment for a mental disability)

  “No individual or entity shall refuse to issue or renew, or shall cancel any policy of insurance because of any past treatment for a mental disability of the insured. (b) The prohibition of subsection (a) hereof shall not preclude an insurer from refusing to issue or renew or from cancelling a...”

• N.Y. Ins. Law Sec. 2601(c) (Unfair claim settlement practices; penalties; separate violations; not a misdemeanor)

  “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...”

• N.Y. Ins. Law Sec. 2612(f) (Discrimination based on being a victim of domestic violence; order of protection; nondisclosure to the policyholder)

  “shall be prohibited for the duration of the order, or until the request designating an alternative mailing address, telephone number or other method of contact is cancelled by the requesting person in writing, from disclosing to the policyholder the address, telephone number or other method of...”

Practice this material

Questions about this source

More New York sources

• 11 NYCRR Chapter IX (Unfair Trade Practices), Parts 216 and 218 - New York unfair claims settlement practices and claim cost control measures, and the prohibition against geographical redlining (Part 216 = Regulation 64; Part 218 = Regulation 90)Regulation
• 11 NYCRR Parts 27 and 30 - New York excess line placements governing standards and producer compensation transparency (Part 27 = Regulation 41; Part 30 = Regulation 194)Regulation
• 11 NYCRR Chapter III Subchapter B (Property and Casualty Insurance), Subpart 60-2 and Parts 67 and 73 - New York supplementary uninsured/underinsured motorists insurance, mandatory underwriting inspection of private passenger automobiles, and claims-made policy standards (Subpart 60-2 = Regulation 35-A; Part 67 = Regulation 79; Part 73 = Regulation 121)Regulation
• 11 NYCRR Chapter II (Agents, Brokers and Adjusters), Parts 20, 21, 22, 23 and 34 - New York producer licensing, examination, fiduciary, recordkeeping and place-of-business rules (Part 20 = Regulations 9, 18 and 29; Part 21 = Regulation 5; Part 22 = Regulation 6; Part 23 = Regulation 7; Part 34 = Regulation 125)Regulation
• 11 NYCRR Part 243 (Chapter X, Records) and Part 420 (Chapter XIX) - New York standards of records retention by insurance companies, and privacy of consumer financial and health information (Part 243 = Regulation 152; Part 420 = Regulation 169)Regulation
• 23 NYCRR Part 500 - Cybersecurity Requirements for Financial Services Companies (New York Department of Financial Services; the Part the New York P&C exam outline cites as "Reg 23")Regulation
• Seventh Amendment to 11 NYCRR Part 67 (Insurance Regulation 79) -- Mandatory Underwriting Inspection Requirement for Private Passenger Automobiles, sections 67.2 and 67.3 as adoptedRegulation
• N.Y. Ins. Law s. 3203: Individual life insurance policies; standard provisionsState statute