Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Insurance And Finance topic
No spam. Unsubscribe anytime.
Assembly backs bill limiting insurer demands for personal/financial records in ordinary theft claims absent specific articulable grounds
Summary
The Assembly approved a consumer-protection measure restricting insurers from demanding extensive personal, financial or tax records while investigating ordinary theft claims unless there are specific, articulable circumstances of suspected fraud.
The Assembly passed legislation (rules report 2 03) that makes it an unfair claims settlement practice for insurers to demand broad personal, financial or tax records from insureds while investigating theft claims unless special articulable circumstances exist that are directly related to evidence of potential fraud.
Sponsor Assemblyman Dinowitz said the bill clarifies existing Department of Financial Services (DFS) regulation and protects claimants from intrusive, irrelevant information requests. “If the personal information they’re asking for has nothing to do with the actual claim, then it would be intrusive,” the sponsor said on the floor.
Opponents, including several Republicans and members with insurance-industry concerns, argued the law could hinder detection of organized fraud rings and increase costs to policyholders if insurers cannot access relevant records when suspicion is reasonable. One lawmaker who identified experience in insurance investigations said financial stress is a major driver of fraudulent claims and that the bill was poorly written.
The sponsor said insurers remain free to investigate when reasonable grounds exist and noted the bill uses an “articulable circumstances” test—requiring insurers to identify why the specific personal records are relevant to the claim rather than issuing broad, fishing requests.
The Assembly recorded the vote and passed the bill (Ayes 99; Noes 47). Supporters argued the bill will shorten claim-processing times and reduce review of extraneous documents that add cost; opponents said it could limit detection of fraud and increase premiums. The bill’s floor debate included discussion of DFS regulations and the balance between efficient fraud investigation and claimant privacy.
