On July 23, 2008, New York Governor David Paterson signed into law what has been referred to as the "late notice bill" (Senate Bill 8610 and Assembly Bill 11541). The new law states that it takes effect 180 days after the date it is signed into law, and applies to policies issued after that 180-day period. Accordingly, the new law takes effect on January 19, 2009. Thus, policies issued prior to that date will be governed by the prior common law rules that did not require an insurer to demonstrate prejudice in order to deny converge based on late notice of claim. Policies issued, renewed or modified on or after January 19, 2009 must conform to the new law. This legislation applies to all policies insuring against liability for personal injury or property damage issued or delivered in New York.

The law also expands the situation when a claimant can initiate a direct action against a tortfeasor’s insurer. The prior direct action provisions of New York Insurance Law § 3420 limited a claimant’s right of direct action against an insurer to situations in which the claimant had previously obtained a judgment against an insured that had remained unsatisfied for more than 30 days.

Click here for a detailed discussion on the various provisions of the new law and its implications, and a link to its text. Additionally, EAPD's Insurance and Reinsurance Department's September Update newsletter will contain an article that provides further analysis of this legislation. Please click on the "Email the Editor" button on the left to subscribe to the Update.