# N.Y. ISC Law § 2601: Unfair claim settlement practices; penalties > New York · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2601 ## Section - **Citation:** N.Y. ISC Law § 2601 - **Heading:** Unfair claim settlement practices; penalties - **Jurisdiction:** New York - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** New York Code / Act ISC / Article 26 / Section 2601 ## Text § 2601. Unfair claim settlement practices; penalties. (a) No insurer\ndoing business in this state shall engage in unfair claim settlement\npractices. Any of the following acts by an insurer, if committed without\njust cause and performed with such frequency as to indicate a general\nbusiness practice, shall constitute unfair claim settlement practices:\n (1) knowingly misrepresenting to claimants pertinent facts or policy\nprovisions relating to coverages at issue;\n (2) failing to acknowledge with reasonable promptness pertinent\ncommunications as to claims arising under its policies;\n (3) failing to adopt and implement reasonable standards for the prompt\ninvestigation of claims arising under its policies;\n (4) not attempting in good faith to effectuate prompt, fair and\nequitable settlements of claims submitted in which liability has become\nreasonably clear, except where there is a reasonable basis supported by\nspecific information available for review by the department that the\nclaimant has caused the loss to occur by arson. After receiving a\nproperly executed proof of loss, the insurer shall advise the claimant\nof acceptance or denial of the claim within thirty working days;\n (5) compelling policyholders to institute suits to recover amounts due\nunder its policies by offering substantially less than the amounts\nultimately recovered in suits brought by them;\n (6) failing to promptly disclose coverage pursuant to subsection (d)\nor subparagraph (A) of paragraph two of subsection (f) of section three\nthousand four hundred twenty of this chapter;\n (7) submitting reasonably rendered claims to the independent dispute\nresolution process established under article six of the financial\nservices law; or\n (8) artificially deflating or otherwise lowering cost data used for\nadjusted claims, or using cost data that is not appropriate for the\nregion of the state where the loss occurred; this shall include but is\nnot limited to claims adjusted by a person issued a temporary permit\npursuant to subsection (n) of section two thousand one hundred eight of\nthis chapter.\n (b) Evidence as to numbers and types of complaints to the department\nagainst an insurer and as to the department's complaint experience with\nother insurers writing similar lines of insurance shall be admissible in\nevidence in any administrative or judicial proceeding under this section\nor article twenty-four or seventy-four of this chapter, but no insurer\nshall be deemed in violation of this section solely by reason of the\nnumbers and types of such complaints.\n (c) If it is found, after notice and an opportunity to be heard, that\nan insurer has violated this section, each instance of noncompliance\nwith subsection (a) hereof may be treated as a separate violation of\nthis section for purposes of ordering a monetary penalty pursuant to\nsubsection (b) of section one hundred nine of this chapter. A violation\nof this section shall not be a misdemeanor.\n ## Nearby sections - [N.Y. ISC Law § 2601 Unfair claim settlement practices; penalties](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2601.md) - [N.Y. ISC Law § 2602 Rebates on life insurance; witnesses' immunity](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2602.md) - [N.Y. ISC Law § 2603 Issue or circulation of false literature](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2603.md) - [N.Y. ISC Law § 2604 False statements as to insurers](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2604.md) - [N.Y. ISC Law § 2605 Penalty for violating workers' compensation law](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2605.md) - [N.Y. ISC Law § 2606 Discrimination because of race, color, creed, national origin, or disability](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2606.md) - [N.Y. ISC Law § 2607 Discrimination because of sex or marital status](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2607.md) - [N.Y. ISC Law § 2608 Discrimination because of treatment for a mental disability](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2608.md) - [N.Y. ISC Law § 2608-A Discrimination in enrollment against certain children](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2608-A.md) - [N.Y. ISC Law § 2609 Discrimination in the issuance of performance or surety bonds](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2609.md) - [N.Y. ISC Law § 2610 Collision or comprehensive coverage on motor vehicles; claims; repairs](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2610.md) - [N.Y. ISC Law § 2610-A Rental vehicle reimbursement coverage](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2610-A.md) - [N.Y. ISC Law § 2611 HIV written informed consent](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2611.md) - [N.Y. ISC Law § 2612 Discrimination based on being a victim of domestic violence](https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2612.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_NY_AISC_A26_S2601. Check the current official text before relying on it. Not legal advice.