Online New York Insurance Laws & Regulations

Goodbye and good riddance, Findlaw.  You are worth as much as I have been paying for you -- nothing.  In spite of my several emails, you won't timely update New York's insurance statutes.  Doing so 3-4 years after a change is just not acceptable.  You've lost my clicks.

Although this blog undoubtedly contains many hyperlinks to Findlaw pages, I have now bookmarked and will henceforth be using a new free Web resource for New York statutes -- oneCLE.

State laws are here.
New York's consolidated laws (statutes) are here.
New York's Insurance Law is here.

You may want to create some new bookmarks.  And always remember:  never assume that what you read on a free website such as oneCLE is current (or accurate).  If relying on such material, be sure to check it against its official source.

Speaking of new resources for insurance statutory and regulatory materials, the New York State Department of Financial Services recently provided a new hyperlinked source to the "complete unofficial NYCRR", which, of course, includes insurance regulations:

• Regulation 10 (11 NYCRR Part 25) Public Adjusters
• Regulation 35-A (11 NYCRR Part 60-1) Minimum Provisions for Automobile Liability Insurance Policies
• Regulation 35-D (11 NYCRR Part 60-2) Supplementary Uninsured/Underinsured Motorists Insurance
• Regulation 64 (11 NYCRR Part 216) Unfair Claims Settlement Practices and Claim Cost Control Measures
• Regulation 68 (11 NYCRR Part 65) Regulations Implementing the Comprehensive Motor Vehicle Insurance Reparations Act 
• Regulation 95 (11 NYCRR Part 86) Reports of Suspected Insurance Frauds to Criminal Investigations Unit; Required Warning Statements -and-
• Regulation 96 (11 NYCRR Part 62) Fire Insurance.

Although these regulations are broken up into their individual sections instead of appearing on one, continuous page or document, they are free and fairly fresh.  Bookmark and use these while they're still free.

The I've-Lost-Counth Amendment to the Should Anyone Wish to Complain About You to the New York State Department of Financial Services Consumer Advisory Paragraph

Insurers that do business in New York State should know that New York Insurance Regulation 64 (11 NYCRR Part 216) requires certain letters to "prominently set out" a certain paragraph advising those to whom your letters are addressed that they may complain about you or your coverage position to New York's insurance regulator, known since October 2011 as the New York State Department of Financial Services. 

With the relatively recent closing of that department's 25 Beaver Street office in New York City what I like to call the "consumer advisory paragraph" of Regulation 64 now reads:

Should you wish to take this matter up with the New York State Department of Financial Services, you may file with the Department either on its website at http://www.dfs.ny.gov/consumer/fileacomplaint.htm or you may write to or visit the Consumer Assistance Unit, Financial Frauds and Consumer Protection Division, New York State Department of Financial Services, at: One State Street, New York, NY 10004; One Commerce Plaza, Albany, NY 12257; 163B Mineola Boulevard, Mineola, NY 11501; or Walter J. Mahoney Office Building, 65 Court Street, Buffalo, NY 14202.

As demonstrated by the claim file materials we continue to receive in my office, a number of New York insurers apparently remain uncertain of what kinds of letters must actually include that advisory paragraph. Under Regulation 64, there are only two kinds of letters that must do so: 

1. letters "rejecting any element of a claim involving personal property insurance" (11 NYCRR § 216.6[h]); and
2. letters explaining or rejecting any element of a claim for auto physical damage (11 NYCRR § 216.7[d][3]).

Let's take these in reverse order. Everyone knows what an "auto physical damage" claim is, right? We're talking first-party, not third-party claims. Indeed, § 216.7 begins by stating that “[t]his section is applicable to claims arising under motor vehicle collision or comprehensive coverages”. Thus, by implication, letters regarding third-party property damage claims need not include the advisory paragraph. Notice also that § 216.7(d)(3) is somewhat broader in its scope than § 216.6(h) in that the advisory paragraph must be included in both coverage rejection and explanation letters.

Which brings us to letters "rejecting any element of a claim involving personal property insurance", the first type of letter in which the advisory paragraph must be included. A letter rejecting an element of a personal property claim is not:

• an acknowledgement letter;
• an ROR letter;
• a non-waiver agreement;
• a letter written solely to explain personal property coverage or payments;
• a letter forwarding payment to an insured;
• a liability coverage declination letter; or
• every single letter that leaves the insurer's office addressed to an insured or claimant.

In a January 6, 2004 opinion letter, the NYS Insurance Department's OGC (Office of General Counsel) opined:

The term "personal property insurance" in Section 216.6(h) limits the applicability of subdivision (h) to personal lines property insurance. Thus, subdivision (h) is not applicable to commercial lines property insurance or to liability insurance.

Letters rejecting commercial lines property insurance -- no advisory paragraph required.
Letters rejecting (disclaiming/denying) liability coverage -- no advisory paragraph required.

See?

Over the nearly 20 years that my office has been open I've seen the advisory paragraph included in letters in which it is not required.  If you don't care about your consumer complaint ratios, then keep on keeping on.  If you question whether the paragraph belongs in a certain letter even after reading the above, email me.  We'll  figure it out.

SUM Coverage Affirmed for Mechanic's Use of Insured's Temporary Substitute Car

SUM  – TEMPORARY SUBSTITUTE CAR – LOANER VEHICLE
Matter of State Farm Mut. Auto. Ins. Co. v. O'Brien
(2nd Dept., decided 9/19/2014)

State Farm's policy defined "Temporary Substitute Car" as "a car that is in the lawful possession of the person operating it and that: 1. replaces your car for a short time while your car is out of use due to its: a. breakdown; b. servicing; c. repair; d. loss; or e. destruction; and 2. neither you nor the person operating it own or have registered."

State Farm's insured, Auletta, had his car in for servicing or repair at Massapequa Auto Repair.  While his vehicle was at the shop, Auletta was given a loaner car to use.  When his vehicle was done, Auletta asked O'Brien, an employee of  repair shop, to return the shop's loaner car to the shop.  While doing so, the loaner car was struck in the rear by a vehicle insured by GEICO and O'Brien sustained injuries.  O'Brien sued GEICO's insured and GEICO paid its policy's $25,000 to settle that lawsuit.  State Farm consented to the settlement, but denied SUM coverage to O'Brien based on its position that the loaner car did not meet the policy's definition of an "uninsured motor vehicle".

O'Brien demanded arbitration and O'Brien commenced this special proceeding to stay that arbitration permanently.  Supreme Court denied the petition and State Farm appealed.

in AFFIRMING the order appealed from the Appellate Division, Second Department, held that O'Brien was entitled to SUM coverage under Auletta's policy with State Farm because the loaner car constituted a "temporary substitute car" under the policy, and a temporary substitute car carried the same coverages as Auletta's regular auto:

This Court has held that the purpose of a provision relating to a "temporary substitute" vehicle "is to afford continuous coverage to the insured during the period that a vehicle scheduled under the policy is out of commission, and at the same time limit the risk to the insurer to one operating vehicle at a time for a single, fair premium. Coverage for a substitute vehicle ceases when the insured vehicle is repaired and returned to its owner" (Lancer Ins. Co. v Republic Franklin Ins. Co., 304 AD2d 794, 797 [internal quotation marks and citation omitted]). Here, the SUM endorsement fails to articulate any exclusion for a "temporary substitute car." Therefore, the Supreme Court properly denied State Farm's petition to permanently stay arbitration and directed the parties to proceed to arbitration.

Mura & Storm's 2012-2014 New York Insurance Coverage Seminar

It's back.  And we're back.  Or we will be back on Thursday, September 11, 2014.  It's an even-numbered year, which means we're hosting our biennial New York insurance coverage seminar again at the Ramada Amherst/Getzville Hotel & Conference Center in, you guessed it, Getzville, New York.  Here's your invitation:

Now, you should consider yourself invited only if you work with or for insurance companies of any ilk and could use some learnin' on recent New York insurance coverage case law.  Those of you employed by or working for "active clients" of Mura & Storm  (defined as a company that has sent us at least one new file since January 2012) may attend for FREE.  That's right.  Free.  Zero dollars and cents.  The fee for those not working for active clients of Mura & Storm is a nominal $50.  New York attorneys will get CLE.  Bring a new file with you and the seminar's free for you and your coworkers.  Not that anybody has ever done that, but it would be cool.   

There will be lots to talk about this seminar.  Come join us and see.  Or hear.  Or both.  There's still time to register, so click here to compose and send your registration email today.  Be sure to include your contact information and specify which sessions you will be attending.  

Hope to see you next week.