Thursday, February 19, 2009

New York State Insurance Department Releases Report on Investigation Regarding Compliance with Insurance Law § 2610 (Anti-Steering Statute)

The New York State Insurance Department has released the report of its investigation dating back to May 2007 regarding automobile insurer's compliance with New York Insurance Law § 2610, New York's "anti-steering statute", which provides:

(a) Whenever a motor vehicle collision or comprehensive loss shall have been suffered by an insured, no insurer providing collision or comprehensive coverage therefore shall require that repairs be made to such vehicle in a particular place or shop or by a particular concern.

(b) In processing any such claim (other than a claim solely involving window glass), the insurer shall not, unless expressly requested by the insured, recommend or suggest repairs be made to such vehicle in a particular place or shop or by a particular concern.

The Insurance Department conducted its investigation in three phases:
Phase One entailed a review of controls that insurers have put in place to ensure for compliance with Section 2610 and review of insurer tapes and file notes from a business day selected at random.

Phase Two consisted of an on-site review of randomly sampled tapes and file notes of two insurers.

Phase Three consisted of a review of all complaints filed with the Department's Consumer Services Bureau (CSB) related to alleged violations of Section 2610.
Inquiries and examinations were made of the conduct of 12 auto insurance companies or sets of companies, identified by letter only, and the report details the Department's findings in each of the three phases, concluding overall:
CSB’s review did not reveal any systemic violation of Section 2610. Nevertheless, insurers should be vigilant and take steps to clearly inform insureds that they have a right to choose the location for both the inspection and repair of the damaged vehicle. Further, insurers should take all necessary measures to assure that their claim representatives do not recommend a repair facility unless requested by the insured.
 To read the entire report, click here.

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