Relates to the sale of a non-indemnity legal service plan

• Democratic7

◆ The sponsor's argument

Why Jeremy Cooney says this is needed

Unlike traditional legal services insurance policies, non-indemnity prepaid legal service plans provide customers ("members") with access to an attorney ("network attorney") who has agreed to abide by a schedule of free and discounted services in return for a membership fee. While some of these plans do provide services in response to fortuitous events, the primary purpose of a non-indemnity prepaid legal plan is to provide members with certain limited services, consultation and advice and discounts for other legal services. Critically, non-indemnity prepaid legal plans do not pay or reimburse members for the rendering of specific legal services. Members seek services from network attorneys for the benefits contained within their non-indemnity prepaid legal service plan. Network attorneys are obligated to provide the services to the members. These plans should not be regulated like traditional insurance policies. This bill would remove non-indemnity prepaid legal service plans from insurance regulation while retaining regulation of traditional legal service insurance policies. At present, over 30 states no longer regu- late non-indemnity prepaid service legal plans. This small revision will align New York law with the majority of states, including Illinois and California, that do not regulate non-indemnity prepaid legal service plans and is also consistent with the Access to Justice initiative in New York and other states across the country. New York's Permanent Commission on Access to Justice was established in 2015 and continues the efforts of the original Task Force to Expand Access to Civil Legal Services in New York, established in 2010, to provide increased access to legal counsel to New York residents. This revision is consistent with the Overview on the New York Permanent Commission on Access to Justice website which states, For the Judiciary, there can be no higher priority than ensuring meaningful access to justice for all persons. The Permanent Commission on Access to Justice plays a critical role in, our institutional efforts to promote the fair and effective delivery of justice to all New Yorkers regardless of economic status." Non-indemnity prepaid legal service plans provide affordable access to New York residents for legal services in areas including, but not limit- ed to, housing (foreclosure, landlord tenant disputes), family (child custody), consumer rights (creditor/debtor disputes, garnishments), and unemployment benefits. Access to legal services for individuals, fami- lies, and businesses has never been more important. The proposed amend- ment will result in lower costs and allow greater flexibility in the pricing and the delivery of legal services to New York residents similar to that which is already available in the majority of other States in the country. Members receive no reimbursement or indemnification under non-indemnity prepaid legal service plans. Members pay a monthly fee for their plan with specific legal services that are provided directly by the provider law firm.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.