New York Issues New Rules to Speed Sandy-Claims Process

In an effort to resolve outstanding non-flood-related insurance claims from Superstorm Sandy, New York’s governor has established a mediation program and established new rules to speed the insurance-claims process.

Gov. Andrew M. Cuomo said yesterday that the Department of Financial Services created a voluntary mediation process for homeowners who are disputing their insurance claims or are dissatisfied with the denial of a claim. Cuomo called it a speedy and low-cost resolution for contested homeowners claims and “a win for everybody.”

Superintendent of Financial Services Benjamin M. Lawsky said that, under the emergency regulation, insurers will offer and pay for voluntary mediation. 

The American Arbitration Association will administer the process, which Cuomo noted successfully resolved over 70 percent of past claims disputes after major hurricanes in the United States.

Today, the governor announced new rules that reduces the amount of time an insurer can delay a decision on a claim and requires carriers to report the number of delays and why.

“These new regulations will push insurers to move those claims as quickly as possible so people can repair their homes and get back to their lives,” Cuomo said.

The rule cuts the extension period for insurers to make a decision from 90 days to 30 days and requires insurers to estimate the date of their decision. It does not limit the number of extensions available to insurers.

Insurers must report to the department all extensions past the initial 15-business-day decision window along with the amount of the reported loss, the reason for the extension and the number of extensions utilized.

Cuomo also said today that Fannie Mae and Freddie Mac agreed with the state’s request for new rules reducing restrictions on how banks and mortgage servicers can release insurance money to homeowners with a mortgage.

Hold-ups had emerged since insurance-settlement checks issued jointly to homeowners and lenders require the bank’s endorsement before funds are released. Fannie Mae and Freddie Mac rules limited the amount of insurance money the banks can release pending monitoring and completion of repairs.

The new rules give banks greater discretion to disperse the insurance money.

Insurers have settled the vast majority of claims in New York, notes Ellen Melchionni, president of the New Insurance Association.

Citing figures released by the governor’s office, she says 94 percent of the 287,000 residential-property claims have been fully resolved and points to a satisfaction rate of 99 percent based on the number of complaints filed with the state compared to claims filed.

“Despite the numerous challenges we face outside of our control, companies have responded quickly to policyholders and in a positive manner,” she said.

Addressing the extension-period cut, she said insurers need to fully review legitimate claims to ensure fair and quick payment.

“Every claim is unique and different,” she said. “Some can be settled very quickly while complex claims may take longer to review.” 

Comments

Resource Center

View All »

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Extending Contact Center Capabilities Across the Insurance Enterprise

Today advancements in technology are making a big impact on business and society. To yield...

Drug and Alcohol Testing Requirements

In this two-part series, NBIS Risk Management team will break down the requirements to assist...

Why Cyber Liability is Essential for Human Service Organizations

For traditional low-tech operations, information is often compromised in ways that don't involve technology. Access...

A Solution for Large Commercial Habitational Accounts

6 Reasons to place your LARGE Habitational Accounts with Dauntless.

Personal Lines Pro eNewsletter

Critical insights into the personal auto, homeowners, and other consumer insurance markets to help P&C professionals stay informed – FREE! Sign Up Now!

Advertisement. Closing in 15 seconds.