Hochul wants revisions to insurance disclosure law; PBM license bill sign
New York Governor Kathy Hochul this week enacted an insurance disclosure bill that many insurance agents had strongly opposed, but not before asking lawmakers to mitigate the impact of the measure on companies and insurers.
Senate Bill 7052, the Comprehensive Insurance Disclosure Act, was passed on the last day of the 2021 legislative session. It came into force on Saturday, upon the governor’s signature, and requires defendants in lawsuits to disclose information about their insurance coverage. But, perhaps in response to those who had complained that the law would require the disclosure of personal and confidential business information, such as gross income, Hochul “restarted” the bill with many proposed changes.
“I agree with the intention of the bill and have reached an agreement with the legislature to ensure that the scope of the information on insurance coverage that the parties must provide is properly suited to the intended purpose. , which is to ensure that parties to a dispute are properly informed of the limits of potential insurance coverage, âHochul said in a statement.
The New York Legislature meets today, Jan.5, and may approve the changes in the coming weeks.
Professional insurance agents in New York City had spoken out against the original bill, noting that it left corporate defendants little time to put together insurance documents. It would also have required information on policyholders who were covered by a policy but who are not part of a lawsuit, PIANY said in a blog post last summer.
âEssentially, this bill would allow a plaintiff’s attorneys to embark on an unreasonable fishing expedition for any potential insurance coverage, and could result in inflated claims based on the dollar amount of the policy limits, which these policies even provide coverage in a particular case. “, wrote the association.
Now, the revisions proposed by Hochul seem more palatable, although activists in the insurance industry still have some concerns. In a LinkedIn post this week, Buffalo insurance defense attorney Roy Mura described some of Hochul’s proposed changes to the law:
- Disclosure of insurance information should be made within 90 days rather than 60 days of service of the disclosing party’s response.
- Copies of the insurance policy application, showing the defendant’s gross income and other information, would no longer be required.
- Any âpolicies, contracts or agreementsâ that must be disclosed would only be those that ârelate to the claim being disputedâ.
- Only the name, not the telephone number, and e-mail address of a “person designated responsible for the resolution of the claim in question” should be disclosed.
The governor also signed Law S3762 / A1396, requiring drug benefit managers to be licensed and registered with the state. The law, which comes into force in 90 days, also sets out the duties and obligations that PBMs must meet and gives the State Financial Services Department the responsibility for enforcing the law and responding to complaints from consumers and pharmacies. .
âPBMs are widely recognized as major players in increasing drug costs,â National Assembly Member Richard Gottfried, D-Manhattan, said in a statement. âThey have been a black box operating in secrecy without effective regulation, and the mistreatment of independent pharmacists by PBM is escalating as health plans merge with drugstore chains. This new law will ensure effective oversight and transparency in this sector of the health system. “
PBMs were created to help insurers get the lowest price on prescription drugs. But some states have accused a number of PBMs of failing to do so, and ended up costing government and private insurers, including workers’ compensation companies, millions of dollars.
Independent pharmacies have also lobbied for the bill, saying prescribing intermediaries have required pharmacies to sign contracts to remain in a network in order to sell drugs, according to reports from New York.
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