The New York Insurance Department has proposed a fourteenth amendment to Regulation 64, Unfair Claims Settlement Practices and Claims Cost Control Measures (the “Proposed Amendment”). The Proposed Amendment would impose additional restrictions on releases issued in connection with settlements. These additional restrictions provide that:
1. Insurers may not require the execution of a release that requires the releasor to keep the terms and conditions of the settlement confidential, unless warranted by the circumstances;
2. Insurers may not require the execution of a release that prohibits the releasor from making true statements about the releasee that are disparaging, negative, denigrating or derogatory;
3. An insurer shall not require execution of a release for a claim arising under a liability insurance policy unless specified information is included in the release;
4. Insurers must issue separate releases for property damage claims and bodily injury claims where settlements involve both types of claims arising under liability insurance policies; and
5. Insurers may only use a prescribed release form for releases of motor vehicle property damage liability claims, or a form containing substantially similar language to that contained in the prescribed form.
Under the Proposed Amendment, insurers would not be subject to the additional restrictions if the claimant is a “large commercial claimant,” and if such claimant agrees in writing that the insurer shall not be subject to the additional restrictions.
Comments on the Proposed Amendment may be sent to the New York State Insurance Department on or before May 5, 2010. If you would like EAPD to assist you with preparing and submitting comments, please click the “Email the Editor” button and provide your contact information for follow-up by an EAPD attorney.
Click here to view the Proposed Amendment.