Section 2401. Purpose. 2402. Definitions. 2403. Unfair methods of competition or unfair and deceptive acts or practices prohibited. 2404. Power of superintendent. 2405. Hearings and reports on defined violations and determined violations. 2406. Procedure after report; defined violation. 2407. Procedure after report; determined violation. 2408. Judicial review by intervenor. 2409. Effect on other powers and laws. S 2401. Purpose. The purpose of this article is to regulate trade practices in the business of insurance in accordance with the intent of congress as expressed in Public Law 15, 79th Congress, by defining, or providing for the determination of, all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined. S 2402. Definitions. In this article: (a) "Person" means any individual and any legal entity subject to any provision of this chapter, engaged in the business of insurance in this state, including any reciprocal exchange or Lloyds insurer. (b) "Defined violation" means the commission by a person of an act prohibited by: section one thousand two hundred fourteen, one thousand two hundred seventeen, one thousand two hundred twenty, one thousand three hundred thirteen, subparagraph (B) of paragraph two of subsection (i) of section one thousand three hundred twenty-two, two thousand one hundred twenty-two, two thousand one hundred twenty-three, subsection (p) of section two thousand three hundred thirteen, section two thousand three hundred twenty-four, two thousand five hundred two, two thousand five hundred three, two thousand five hundred four, two thousand six hundred one, two thousand six hundred two, two thousand six hundred three, two thousand six hundred four, two thousand six hundred six, two thousand seven hundred three, three thousand one hundred nine, three thousand two hundred twenty-four-a, three thousand four hundred twenty-nine, three thousand four hundred thirty-three, paragraph seven of subsection (e) of section three thousand four hundred twenty-six, four thousand two hundred twenty-four, four thousand two hundred twenty-five or four thousand two hundred twenty-six of this chapter; or section 135.60, 135.65, 175.05, 175.45, or 190.20, or article one hundred five of the penal law. (c) "Determined violation" means any unfair method of competition or any unfair or deceptive act or practice, which is not a defined violation but is determined by the superintendent pursuant to section two thousand four hundred five of this article to be such method, act or practice. S 2403. Unfair methods of competition or unfair and deceptive acts or practices prohibited. No person shall engage in this state in any trade practice constituting a defined violation or a determined violation as defined herein. S 2404. Power of superintendent. The superintendent is empowered to examine and investigate into the affairs of any person in order to determine whether the person has violated or is violating section two thousand four hundred three of this article. In the event any person does not provide a good faith response to a request for information from the superintendent, within a time period specified by the superintendent of not less than fifteen business days, as part of an examination or investigation initiated by the superintendent pursuant to this section relating to accident insurance, health insurance, accident and health insurance or health maintenance organization coverage, the superintendent is authorized, after notice and hearing, to levy a civil penalty against such person in an amount not to exceed five hundred dollars per day for each day beyond the date specified by the superintendent for response, but in no event shall such penalty exceed ten thousand dollars. In the event the superintendent levies five separate civil penalties against any one person within five years for failure to comply with this section, the superintendent is authorized, after notice and hearing, to levy an additional civil penalty against such person in an amount not to exceed fifty thousand dollars. The superintendent is also authorized to levy additional civil penalties not to exceed fifty thousand dollars, after notice and hearing, against such person for every five subsequent violations of this section within a five year period. Any person licensed pursuant to article twenty-one of this chapter may surrender such license in lieu of payment of any civil penalty imposed by the superintendent pursuant to this section. S 2405. Hearings and reports on defined violations and determined violations. (a) Whenever the superintendent has reason to believe that a person has committed or is committing a defined violation or has been engaged in or is engaging in any method of competition, or any act or practice, which could become a determined violation and that a proceeding thereon would be in the interest of the public, he shall serve upon the person in the manner provided by section three hundred three of this chapter, a statement of the charges and notice of a hearing to be held at a time not less than ten days after the date of service of the notice and at the place fixed in the notice. (b) The person shall have an opportunity at the hearing to be heard personally or by counsel, and, in the case of a defined violation, to show cause why an order should not be made by the superintendent requiring the person to cease and desist from the charged defined violation. Upon good cause shown, the superintendent shall permit anyone to intervene, appear and be heard at the hearing personally or by counsel. (c) After the hearing, the superintendent shall make a written report containing his findings, and shall serve a copy of the report upon the person and any intervenor.
S 2406. Procedure after report; defined violation. (a) If the hearing was on a charge of a defined violation the superintendent shall make an order on his report and serve a copy of the findings and order upon the person charged with the violation and any intervenor. If the superintendent finds that the person complained of has engaged in a defined violation, the order shall require the person to cease and desist from engaging in such defined violation. Furthermore, if the superintendent finds, after notice and hearing, that the person complained of has engaged in an act prohibited by section three thousand two hundred twenty-four-a of this chapter, the superintendent is authorized to levy a civil penalty against such person in an amount up to five hundred dollars per day for each day beyond the date that a bill or claim was to be processed in accordance with section three thousand two hundred twenty-four-a of this chapter, but in no event shall such penalty exceed five thousand dollars. (b) Until a proceeding for judicial review has been commenced, or the time to commence the proceeding has expired, the superintendent may, upon notice and in the manner he deems proper, modify or set aside all or part of any order issued by him under this section. (c) If a proceeding for judicial review has not been commenced within the time allowed, the superintendent may, after notice and opportunity for hearing, modify or set aside, all or part, of any order issued by him under this section, whenever in his opinion changed conditions of fact or law or the public interest require. (d) A cease and desist order issued under this section is final upon the expiration of the time allowed for commencing a proceeding for judicial review if no proceeding has been commenced within such time, or upon the final decision of the court affirming the order or dismissing the proceeding. (e) Any person who violates a cease and desist order issued by the superintendent under this section after it has become final, and while it is in effect, shall be liable to the people of this state for a penalty in an amount not to exceed five thousand dollars for each violation. In determining the amount of the penalty the question of whether the violation was wilful shall be taken into consideration. Nothing herein shall limit a court in enforcing its own orders. S 2407. Procedure after report; determined violation. (a) If the report charges a determined violation and if the method of competition, act or practice constituting such determined violation has not been discontinued, the superintendent may, through the attorney general, at any time after the service of the report cause an action to be instituted to enjoin the person from engaging in such determined violation. (b) The court may on motion and affidavits grant a preliminary injunction and interlocutory injunction upon such terms as may be just. (c) A certified transcript of the proceedings before the superintendent including all evidence taken and the report and findings shall be received in evidence in the action. S 2408. Judicial review by intervenor. If the report of the superintendent made pursuant to subsection (c) of section two thousand four hundred five of this article or the order of the superintendent made pursuant to subsection (a) of section two thousand four hundred six of this article does not charge a violation of this article, then any intervenor in the proceedings may, after the service of such report or order upon the intervenor and within the time allowed by law, commence a proceeding for judicial review. S 2409. Effect on other powers and laws. (a) The powers vested in the superintendent by this article shall be additional to any other powers to enforce any penalties, fines or forfeitures authorized by law with respect to the methods, acts and practices defined in section two thousand four hundred two of this article as defined violations or determined violations. (b) No order of the superintendent under this article or order of a court to enforce the same shall in any way relieve any person affected by the order from any liability under any other law.
