New York S 5052: Permits an insurer to rescind or retroactively cancel a policy in circumstances involving an accident staged to defraud an insurer

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 Speaker Carl E. Heastie

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S05052 Summary:

BILL NOS05052 

&nbsp

SAME ASSAME AS A07322

&nbsp

SPONSORBAILEY

&nbsp

COSPNSRHELMING, MURRAY

&nbsp

MLTSPNSR

&nbsp

Add §3426-a, amd §§3420, 5103 & 5201, Ins L; amd §313, V & T L

&nbsp

Permits an insurer to rescind or retroactively cancel a policy in circumstances involving an accident staged to defraud an insurer.

Go to top S05052 Actions:

BILL NOS05052 

&nbsp

02/18/2025REFERRED TO INSURANCE

01/07/2026REFERRED TO INSURANCE

02/03/20261ST REPORT CAL.220

02/04/20262ND REPORT CAL.

02/05/2026ADVANCED TO THIRD READING 

02/09/2026PASSED SENATE

02/09/2026DELIVERED TO ASSEMBLY

02/09/2026referred to insurance

Go to topS05052 Committee&nbspVotes:

Go to topS05052 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topS05052 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 5052

 2025-2026 Regular Sessions

 IN SENATE

 February 18, 2025
 ___________

 Introduced by Sens. BAILEY, HELMING -- read twice and ordered printed,
 and when printed to be committed to the Committee on Insurance

 AN ACT to amend the insurance law and the vehicle and traffic law, in
 relation to permitting an insurer to rescind or retroactively cancel a
 policy in certain circumstances

 The People of the State of New York, represented in Senate and Assem-
 bly, do enact as follows:

 1 Section 1. The insurance law is amended by adding a new section 3426-a
 2 to read as follows:
 3 § 3426-a. Cancellation of policy. (a) An insurer may, within the first
 4 sixty days, rescind or retroactively cancel to the inception a newly
 5 issued automobile insurance policy subject to paragraph one of
 6 subsection (a) of section three thousand four hundred twenty-five of
 7 this article, a newly issued commercial automobile insurance policy
 8 subject to section three thousand four hundred twenty-six of this arti-
 9 cle, or a policy issued pursuant to any plan established under article
 10 fifty-three of this chapter, if the initial premium payment is not
 11 honored by a financial institution due to the nonexistence or the unau-
 12 thorized use of a bank account, or the initial premium payment is denied
 13 by a credit card company due to the unauthorized use of a credit card
 14 account. This section shall not apply to policies required under article
 15 eight of the vehicle and traffic law.
 16 (b) A person who is injured during this period and who would ordinar-
 17 ily be covered under the insured's policy had it not been canceled
 18 pursuant to subsection (a) of this section, shall be entitled to recover
 19 under such person's own policy subject to the terms and conditions of
 20 the contract, or if the injured person is uninsured, they shall be enti-
 21 tled to recover under the motor vehicle accident indemnification corpo-
 22 ration, provided such person did not participate in any fraudulent
 23 activity, including, but not limited to, an accident staged to defraud

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD09386-01-5

 S. 5052 2

 1 an insurer. The motor vehicle accident indemnification corporation may
 2 not subrogate its claim against the rescinding or cancelling insurer.
 3 § 2. Paragraph 2 of subsection (d) of section 3420 of the insurance
 4 law, as amended by chapter 388 of the laws of 2008, is amended to read
 5 as follows:
 6 (2) If under a liability policy issued or delivered in this state, an
 7 insurer shall disclaim liability or deny coverage including a disclaimer
 8 or denial because the insurer rescinded or cancelled coverage pursuant
 9 to section three thousand four hundred twenty-six-a of this article, for
 10 death or bodily injury arising out of a motor vehicle accident, includ-
 11 ing any claim for personal injuries under an uninsured motorist endorse-
 12 ment by any occupant of a motor vehicle or other person involved in an
 13 accident that was staged to defraud an insurer who is without knowledge
 14 of the staging or fraudulent intent of the accident, or any other type
 15 of accident occurring within this state, it shall give written notice as
 16 soon as is reasonably possible of such disclaimer of liability or denial
 17 of coverage to the insured and the injur