Reprise of the No-Fault Intoxication Exclusion Cut-Back Bill Has Passed the NYS Assembly -- To Governor to Sign

As I predicted in my post of June 30th, the revised no-fault intoxication exclusion cut-back bill, S7845 Breslin, was put to a vote and passed in the New York State Assembly yesterday, July 1, 2010. The Senate passed the bill on June 18th. 

Although some will recall that Governor Paterson vetoed a broader version of this bill back in 2008, this 2010 version of the cut-back bill limits the exception to the intoxication exclusion to the payment of "necessary emergency health services rendered in a general hospital, as defined in [New York Public Health Law § 2801(10)] including ambulance services attendant thereto and related medical screening."  As its 2008 predecessor did, it also provides that where a covered person is found to have violated V&T § 1192, the no-fault insurer may sue the covered person to recover the amount of first party benefits paid or payable for that person.  Given the bill's limitation to emergency general hospital and ambulance services, Governor Paterson is expected to sign this bill.

The bill amends Insurance Law § 5103(b)(2) as follows (new language underlined):

Section 5103:  Entitlement to first party benefits; additional financial security required

(b)  An insurer may exclude from coverage required by subsection (a) hereof a person who:

(2) Is injured as a result of operating a motor vehicle while in an intoxicated condition or while his ability to operate such vehicle is impaired by the use of a drug within the meaning of section eleven hundred ninety-two of the vehicle and traffic law; provided, however, that an insurer shall not exclude such person from coverage with respect to necessary emergency health services rendered in a general hospital, as defined in subdivision ten of section two thousand eight hundred one of the public health law, including ambulance services attendant thereto and related medical screening. notwithstanding any other law, where the covered person is found to have violated section eleven hundred ninety two of the vehicle and traffic law, the insurer has a cause of action for the amount of first party benefits paid or payable on behalf of such covered person against such covered person.

This new law will take effect 180 days after Governor Paterson signs it -- and he WILL sign this one -- and will apply to all policies that must afford no-fault insurance which are issued, renewed, modified, altered or amended on or after such date.

If Governor Paterson signs the bill today or tomorrow, some New York no-fault insurers could be paying for emergency treatment  to persons overreveling on this coming New Year's Eve.  Certainly we can expect to see no-fault payments for intoxicated and impaired drivers sometime in early 2011. 

And does the language "found to have violated [Vehicle & Traffic Law § 1192]" in the new law mean that there must be a conviction before a no-fault insurer may sue the covered person to recover health care service benefits paid for his or her emergency treatment?  New York law currently does not contain such a requirement, so this new law, which grants a new cause of action to no-fault insurers, should arguably be construed to enlarge, rather than diminish, no-fault insurers' rights in this area, right?

Editor's Note (01.14.11) ~~ An amended Insurance Law § 5103(b)(2) takes effect on January 26, 2011.  Read about that amendment and the New York State Insurance Department's interpretation of it here.