STATUS UPDATE (Part IV) -- Direct DJ/Late Notice/Prejudice Bill Passes NYS Legislature on June 23, 2008

As expected, the direct DJ/late notice/prejudice bill has passed and awaits the Governor's signature or veto.

Yesterday, Program Bill #65 passed both houses of the New York State Legislature. The Senate version, Bill # S8610, passed first by a 62-0 vote, and then was delivered to and passed the Assembly, under Bill # A11541, the same day. Since this bill originated from the Governor's Office, expect it to be signed into law.

The new provisions under this bill will take effect 180 days (six months) after the bill becomes law (is signed by the Governor). The new provisions will apply to qualifying policies "issued or delivered in this state on or after [the effective] date and to any action maintained under such a policy[.]"

For an outline and discussion of the provisions of this new law, see my May 14th Status Update (Part II) post.

For a discussion of how the new prejudice rule will work, see my June 14th Prejudice, Presumptions and Burdens of Proof post.

Remember that this new law adds a new paragraph (1) to Insurance Law § 3420(d), which will require certain liability insurers, upon written request by injured persons or other claimants, to confirm the existence and liability coverage limits of qualifying insurance policies. This new requirement will apply to liability policies providing coverage for bodily injury or death, where the policy is: subject to Insurance Law § 3425, other than an excess or liability policy; or used to satisfy a financial responsibility requirement imposed by law or regulation.

Since this bill passed both houses at the end of the Legislature's 2008 session and presumably will be sent to the Governor when the Legislature is out of session, Governor Paterson will have 30 days in which to sign or not sign the bill. A failure to act (not signing the bill) would represent a "pocket veto" and have the same effect as a veto. See, How a Bill Becomes a Law.

Coverage Counsel will report when the Governor signs this bill into law and it becomes effective. Liability insurers doing business in New York should begin preparing for its new provisions, including the requirements for new policy language.

July 23, 2008 -- Governor Paterson signed this bill today. See my post here.