The REVISED (and Current) Should-You-Wish-to-Complain-About-Your-Insurance-Company Advisory Paragraph of New York Insurance Regulation 64

This marks the seventh of many times since May 2008 that I've blogged about what I like to call the consumer advisory paragraph of New York Insurance Regulation 64 (11 NYCRR Part 216).  Insurers that do business in New York State should know that Regulation 64 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, formerly known as the New York State Insurance Department and now known since October 2011 as the New York State Department of Financial Services.

Effective June 9, 2021, the consumer advisory paragraph changed by deleting the in-person complaint-filing option and changing the Buffalo office mailing address.  Pursuant to the Eighteenth Amendment to 11 NYCRR Part 216, the paragraph now reads (new language highlighted):

Should you wish to take this matter up with the New York State Department of Financial Services, you may file a complaint with the Department either on its website at http://www.dfs.ny.gov/consumer/fileacomplaint.htm or by writing to the Consumer Assistance Unit, New York State Department of Financial Services, at: One State Street, New York, NY 10004; One Commerce Plaza, Albany, NY 12257; 1399 Franklin Avenue, Garden City, NY 11530; or 535 Washington Street, Suite 305, Buffalo, NY 14203.

As demonstrated by the claim file materials we continue to receive in my office (and the email I received just today), a number of insurers doing business in New York apparently remain uncertain of what kinds of letters must actually include that advisory paragraph. Under Regulation 64, there are only two kinds of notices or letters that must do so: 

"[a]ny notice rejecting any element of a claim involving personal property insurance" (11 NYCRR § 216.6[h]); and

"[a]ny letter of explanation or rejection of any element of a claim" for motor vehicle physical damage (11 NYCRR § 216.7[d][3]).

Let's take these in reverse order. 

11 NYCRR § 216.7(d)(3)'s Requirement

Everyone knows what a "motor vehicle physical damage" claim is, right?  Claims for collision or comprehensive coverage.  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 required by 216.7(d)(3) must be included in both coverage rejection and explanation letters.

11 NYCRR § 216.6(h)'s Requirement

Which brings us to "[a]ny notice [broader than "letter"?] rejecting any element of a claim involving personal property insurance", the first type of claim communication in which the advisory paragraph must be included. A notice or 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 property insurance? ⇨ No advisory paragraph required❗

Letters to insureds rejecting (disclaiming/denying) liability coverage? ⇨ No advisory paragraph required❗

Letters to third-party claimants or their assignees (body shops) or subrogees (insurers) denying that your insured was at fault, in whole or part, for causing the accident and injuries or damages ? ⇨ No advisory paragraph required❗

See?

Over the 26+ 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 company's consumer complaint ratios, then by all means continue including the consumer advisory paragraph in everything written that leaves your desk or office.  If, however, after reading this seventh missive you still are not sure whether the paragraph belongs in a certain letter or not, call or email me.  We'll figure it out. 

May a New York Property Insurer Communicate Directly with Its Insured Who Is Represented by a Public Adjuster?

This was yesterday's question of the day, one I'm asked from time to time.  Each time I get this question I check New York's insurance laws and regulations.  And each time I come to the same conclusion:

There is nothing in New York’s Insurance Law or Regulation 64 (11 NYCRR Part 216) that prohibits an insurer from communicating directly with its insureds who are represented by a licensed public adjuster.  The insured and insurer, after all, are the parties of the first-part and second-part  to the insurance contract.  They should be able to communicate freely with one another.  After all, if a public adjuster is not prohibited from communicating directly with an insurer that is represented by counsel, surely an insurer is not prohibited from communicating directly with its insured who is represented by a public adjuster, right?

Agree or disagree?  Let us know by leaving a comment.

The Updated Should-You-Wish-to-Complain-About-Your-Insurance-Company Advisory Paragraph

I've blogged several times about the consumer advisory paragraph of New York Insurance Regulation 64 (11 NYCRR Part 216).  Personal Lines insurers that do business in New York State should know that Regulation 64 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. 

Effective February 1, 2017 the consumer advisory paragraph changed with a new Garden City address for the NYS DFS's Long Island office.  Pursuant to the Sixteenth Amendment to 11 NYCRR Part 216, the paragraph now reads (new language highlighted):

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; 1399 Franklin Avenue, Garden City, NY 11530; 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 22+ 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.

Get Your Current 11 NYCRR Part 216 (NY Insurance Regulation 64) Here

Go on.  Find a copy of New York Insurance Regulation 64 (11 NYCRR Part 216) on the New York Department of Financial Services' website.  I double dog dare ya.  Click as many links as you want within the DFS website and you still won't find Regulation 64 in a current, single document.  Tell me I'm wrong.

Google "New York Insurance Regulation 64" (without the quotation marks) instead, and the first search result points to a non-current version of Reg 64 hidden but still found on the NYSDFS's website server.  Nice, huh?

It would appear that the only path currently existing through the NYSDFS's website to that which represents the embodiment of New York's Unfair Claims Settlement Practices Act (though the reg is not an act) is on the footer of the DFS's website under "Laws and Regs".  Of course, one would need to know that "NYCRR" refer to the New York Codes, Rule and Regulations or by process of elimination click that link to find one's way to Title 11, New York's insurance regulations.  Three clicks later (Title 11 Insurance, Chapter IX Unfair Trade Practices, and Part 216 Unfair Claim Settlement Practices and Claim Cost Control Measures) and you might find your way to what is commonly known to New York insurers and insureds as Regulation 64.  Congratulations.  Now bookmark that location.

Or click HERE and download what I compiled earlier today as what passes as the current version of Regulation 64.  You're welcome.

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.

New York Insurance Regulation 64 (11 NYCRR Part 216) -- Updated Version

Editor's Note (11.14.16) ~~ An updated version of Regulation 64, current through November 14, 2016, is HERE.

Since March 2010 when I first posted a link on this blog, New York Insurance Regulation 64 has seen several amendments.  The last updated version I posted and made available was in September 2012, but the October 2011 replacement of the New York State Insurance Department with the Department of Financial Services and the regulatory changes that arrived in Superstorm Sandy's wake after October 2012 made that September 21, 2012 version outdated almost as soon as I posted it.

Click HERE for a version of Regulation 64 that is current through January 29, 2014.  I'll do my best to update all of the links on this blog to the older version, but if you find any of those outdated links, please email me and I'll fix them.   

Those who would rely on the provisions of Regulation 64 are always best to check the official version, which is available via this link.

Should You Wish to Complain About Us to the New York State Department of Financial Services

If I'm going to reactivate this blog (and I am) I might as well start by updating this May 2008 posting.

You insurers who do business in New York know, of course, 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 decision to New York's insurance regulator, known since October 2011 as the New York State Department of Financial Services.

It only took that department approximately 20 months after its creation to update all regulatory references to the previous regulator -- the New York State Insurance Department -- including what I like to refer to as the "consumer advisory paragraph" of Regulation 64.  That paragraph 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.

A number of New York insurers apparently remain uncertain, however, 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?

Nearly six years later I'm still seeing the advisory paragraph being 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.

Emergency Adoption of the Twelfth Amendment to New York Insurance Regulation 64

This afternoon New York Governor Andrew Cuomo announced four new measures or actions being taken in New York purportedly to expedite and in response to Sandy-related insurance claims:

1. today's issuance by the New York Department of Financial Services of an emergency amendment to New York Insurance Regulation 64 (11 NYCRR Part 216) reducing from 15 business days to 6 business days the time for insurers "to commence" an investigation of certain types of claims "occurring from October 26, 2012 through November 15, 2012" in the 10 designated counties (Bronx, Kings, Nassau, New York, Orange, Queens, Richmond, Rockland, Suffolk or Westchester) and, if they wish their investigation to include an inspection of the damaged or destroyed property, to conduct that inspection within that 6-day period; 
2. the inclusion within that emergency regulation of a provision allowing claimants to commence certain repairs immediately and before the insurer has had an opportunity to inspect the damaged property "[w]here necessary to protect health or safety" and provided the claimant submits proof of loss documentation; 
3. the issuance of Executive Order Number 82 temporarily suspending from today and until further notice the requirements of New York Insurance Law § 2108 so that the DFS may more easily issue temporary public adjuster licenses that authorize such temporary licensees to adjust property/casualty insurance claims in the counties of Bronx, Kings, Nassau, New York, Orange, Queens, Richmond, Rockland, Suffolk and Westchester that are commenced during the period this executive order remains in effect; and 
4. the launching of an "online report card system concerning insurance companies who are operating in the areas that were affected by Hurricane Sandy."

  You can watch the Governor's press conference, including the Q&A at its end, here:


New York property insurers should take note of the following:

Twelfth Amendment to New York Insurance Regulation 64 (11 NYCRR Part 216)

Amendment of Existing Subsection 216.5(a)

Notwithstanding what the Governor's and DFS's press releases say or imply, there never was and still is no actual requirement in Regulation 64 that a New York property insurer inspect a claimed loss.  Until today section 216.5(a) only required insurers subject to that section to "establish procedures to commence an investigation of any claim filed by a claimant, or by a claimant’s authorized representative, within 15 business days of receipt of notice of claim."  That subdivision was amended ever so slightly by renumbering it as 216.5(a)(1) -- to allow for the addition of subsection (a)(2) -- and by deleting the words "establish procedures to" and changing ""receipt of" to "receiving".  The amended subsection, which is applicable to ALL insurers that are subject to section 216.5, now begins by providing that such an insurer

shall commence an investigation of any claim filed by a claimant, or by a claimant’s authorized representative, within 15 business days of receiving notice of claim.

Of course, the regulation nowhere defines what suffices to "commence" an investigation of a filed claim.  Presumably that is something more than merely acknowledging a claim, however, inasmuch as section 216.4(a) already requires insurers within 15 business days to acknowledge in writing their receipt of all claim notifications.

Addition of New Subsection 216.5(a)(2)

The bulk of today's emergency regulation is its new paragraph (2) of section 216.5(a).  Here's the language of that new paragraph, which took effect today:

(2)(i) Notwithstanding paragraph one of this subdivision, for claims that would otherwise be subject to the provisions of paragraph one the provisions of this paragraph shall instead apply, with respect to any claim occurring from October 26, 2012 through November 15, 2012 in the counties of Bronx, Kings, Nassau, New York, Orange, Queens, Richmond, Rockland, Suffolk or Westchester, including their adjacent waters, with respect to

(a) loss of or damage to real property;
(b) loss of or damage to personal property; or
(c) other liabilities for loss of, damage to, or injury to persons or property.

(ii) Every insurer shall commence an investigation of any claim filed by a claimant, or by a claimant’s authorized representative, within six business days of receiving notice of claim, provided, however, that if a claimant, or the claimant’s authorized representative, filed a claim
between October 26, 2012 and November 29, 2012, then the insurer shall commence an investigation of the claim within six business days after November 29, 2012 or 15 business days of receiving notice of claim, whichever is sooner. If the insurer wishes its investigation to include an inspection of the damaged or destroyed property, the inspection, whether performed by the insurer, an independent adjuster, or other representative of the insurer, must occur within the time frames specified in this paragraph.

(iii) An insurer shall furnish to every claimant, or claimant's authorized representative, a notification of all items, statements and forms, if any, that the insurer reasonably believes will be required of the claimant, within six business days of receiving notice of the claim.

(iv) A claim filed with an agent of an insurer shall be deemed to have been filed with the insurer unless, consistent with law or contract, the agent notifies the person filing the claim that the agent is not authorized to receive notices of claim.

(v) Where necessary to protect health or safety, a claimant may commence immediate repairs to heating systems, hot water systems, and necessary electrical connections, as well as exterior windows, exterior doors, and, for minor permanent repairs, exterior walls, in order to enable property to retain heat, and any policy requirement that the policyholder exhibit the remains of the property may be satisfied by the policyholder submitting proof of loss documentation of the damaged or destroyed property, including photographs or video recordings; material samples, if applicable; and inventories, as well as receipts for any repairs to or replacement of property. This subparagraph does not apply to claims under flood policies issued under the national flood insurance program.

Insurers subject to section 216.5(a)(2) should take note of the following:

Temporal Limitation of 216.5(a)(2) -- 216.5(a)(2)(i)

This new subdivision expressly only applies to "any claim occurring from October 26, 2012 through November 15, 2012".  Now, I'm not sure when a claim "occurs" and whether this new subsection should have read "any loss occurring", but this new subsection does seems to be temporally limited to claims "occurring from October 26, 2012 through November 15, 2012".  If someone could explain why November 15th was selected as the end date, I would be appreciative.  That's a period of 20 calendar days.

Territorial Limitation of 216.5(a)(2) -- 216.5(a)(2)(i)

This new subdivision applies only to claims "occurring" in the counties of Bronx, Kings, Nassau, New York, Orange, Queens, Richmond, Rockland, Suffolk or Westchester, and their adjacent waters.  Once again, I presume the Department meant loss rather than claim when speaking of something "occurring".  I don't know what it means for a claim to "occur" in the Bronx, or Staten Island, or Long Island.  Claims stems from losses and are asserted, filed, or made; they don't really occur, do they?  Nevertheless, whatever is meant by "occurring", it must have taken place in one of these 10 counties or their adjacent waters for this new paragraph and its new requirements to apply. 

Type Limitation of 216.5(a)(2) -- 216.5(a)(2)(i)

This new subdivision only applies to three types of claims or losses:

1.  loss of or damage to real property; 
2. loss of or damage to personal property; or
3. other liabilities for loss of, damage to, or injury to persons or property.

I know what Types 1 and 2 are and think Type 3s are 3rd-party BI and PD liability losses and resulting claims.  Right?  

Contrary to what may become or already is a widespread belief, however, no part of this emergency regulation is limited to Sandy-related claims.  As long as a claim "occurs" within the designated period and within one of the designated counties and is of one of the above three types, the new requirements ostensibly apply.

Reduction of Time to "Commence" Investigation to Six (6) Business Days -- 216.5(a)(2)(ii)

For claims to which new subsection 216.5(a)(2) applies (see above), the insurer's time to "commence" its investigation of such claims is now either

six (6) business days after today, November 29, 2012 -or-

15 business days of receiving notice of the claim

 whichever is sooner.  During Governor Cuomo's press conference, Superintendent Lawsky explained that if a claim was already filed with the insurer, the insurer would have the lesser of either the balance of the previous 15-day period or 6 days from today to commence its investigation and, if desired, to inspect the loss.  I'm interpreting and adding the latter part; both Governor Cuomo and Superintendent Lawsky made it sound like this new emergency regulation would impose an obligatory inspection requirement on all applicable insurers for all applicable claims, but it doesn't read that way.  Notice that the second sentence of 216.5(a)(2)(ii) reads:

If the insurer wishes its investigation to include an inspection of the damaged or destroyed property, the inspection, whether performed by the insurer, an independent adjuster, or other representative of the insurer, must occur within the time frames specified in this paragraph.

The inspection is not a "shall"; it's an "if".  And only if it's desired on qualifying claims must it then be conducted "within the time frames specified in this paragraph" which presumably (hedge here) is the sooner of either six business days from today or 15 business days from when the insurer received notice of the claim.  

Reduction of Time to to Six (6) Business Days to Furnish to Claimants Stuff that Will Be Required of Them -- 216.5(a)(2)(iii)

This seems relatively straightforward.  For qualifying claims, insurers shall furnish to every claimant, or claimant's authorized representative, a notification of all items, statements and forms, if any, that the insurer reasonably believes will be required of the claimant, within six (6) business days of receiving notice of the claim.

Claims Filed with the Insurer's Agent -- 216.5(a)(2)(iv)

Also pretty straightforward.  Unless a producing agent notifies the the person filing the claim that the agent is not authorized to receive notices of claim, claims filed with an agent of a qualifying insurer will be deemed to have been filed with the insurer.

Immediate Repairs Provision -- 216.5(a)(2)(v)

Notwithstanding the new provisions of 216.5(a)(2)(ii), claimants of qualifying claims (see above) may commence certain immediate repairs "[w]here necessary to protect health or safety".   Immediate repairs may be made to

heating systems, hot water systems, and necessary electrical connections -and-

exterior windows, exterior doors, and, for minor permanent repairs, exterior walls, in order to enable property to retain heat[.]

This subdivision further provides that any policy requirement that the policyholder exhibit the damaged property "may be satisfied by the policyholder submitting proof of loss documentation of the damaged or destroyed property, including photographs or video recordings; material samples, if applicable; and inventories, as well as receipts for any repairs to or replacement of property."

Public Adjuster-repped Claims

Our governor today announced the temporary suspension of certain licensing requirements of Insurance Law § 2108 so that more public adjusters could be temporarily licensed to help New York insureds with their property claims, but did anyone at the DFS consider that section 216.2(d) of Regulation 64 already provides, and continues to provide, since it was left unamended and unaffected by this emergency regulation, that

... subdivision (a) of section 216.5 of this Part shall not be applicable to policies of insurance where the claimant is represented by a public adjuster or a person acting in the capacity of a public adjuster pursuant to the provisions of article 21 of the Insurance Law[?]

So what become of the new requirements of subparagraph (2) of 216.5(a) in PA-repped qualifying claims?  Certainly an argument could be made they don't apply. 

Executive Order Number 82

Which brings us to Executive Order Number 82, which you can read in its entirety for yourself if you care to.  My read of this executive order is that it merely permits or creates the category of a temporary public adjuster who, upon issuance of such a license, will be authorized only "to adjust property/casualty insurance claims in the counties of Bronx, Kings, Nassau, New York, Orange, Queens, Richmond, Rockland, Suffolk and Westchester that are commenced during the period for which this Executive Order is effective[.]"

Once again, I'm not sure what is meant by "claims ... that are commenced" within this executive order's period, but presumably it means claims filed on and after today and for as long as this executive order, which itself has a "until further notice" expiration date, remains in effect. 

Under this executive order, the requirements to obtain such a temporary PA license are:

1. completion of an application on a form prescribed by the Superintendent of Financial Services;
2. signing of such application form by a public adjuster who is licensed in this State pursuant to Section 2108 of the Insurance Law, whose license is in good standing, and who will be responsible for both the supervising of the temporary licensee either in an employer/employee relationship or other arrangement whereby the licensed public adjuster has control over the temporary licensee and the satisfactory completion of all adjustment undertaken by the temporary licensee;
3. the temporary licensee has not had an insurance license revoked, suspended or otherwise terminated for cause in any state in the United States in the last ten years;
4. the temporary licensee has not been charged with, been convicted of, or pleaded guilty to or nolo contendere with respect to a crime or misdemeanor in any state in the United States in the last ten years; 
5. the temporary licensee has not been found liable for misrepresentation, fraud, or unethical conduct in any state in the United States in the last ten years; and 
6. the temporary licensee is presently licensed in another state as a public or independent adjuster to adjust property/casualty insurance claims; or has 5 years prior experience within the last ten years as a public or independent adjuster adjusting property/casualty insurance claims in the United States; or has been licensed as a public or independent adjuster in New York State within the last 5 years.

Online Insurer Report Cards

For the stated purpose of "hold[ing] insurance companies accountable to consumers and allow[ing] New Yorkers to see the performance of their insurance company compared to other companies", today the DFS published online "report cards" of certain, but certainly not all, auto and property insurers that "are operating in the areas that were affected by Hurricane Sandy."  (Wait, I thought it wasn't a hurricane, Governor Cuomo and Superintendent Lawsky?) 

Those lucky 24 insurers or insurer groups are:  

• Adirondack Insurance Exchange
• Allstate Insurance Group
• Amtrust Financial Service Group
• Assurant Insurance Group
• Andover Group
• Arch Insurance Group
• Berkshire Hathaway (GEICO)
• Central Services Grp
  (aka New York Central Mutual)
• Chartis/AIG
• Chubb & Son Inc
• FM Global Group
• Hartford Fire & Casualty Group
• Liberty Mutual Group
• Metropolitan Group
• Narragansett Bay Insurance Company
• Nationwide Group
• NY Property Insurance Underwriting Association
• QBE Ins Grp Ltd
• State Farm IL
• Travelers Group
• Tower Group
• USAA Group
• Utica National Insurance Group
• Zurich Insurance Group

 In his press conference this afternoon, Governor Cuomo spoke (at 2:00 of the video, to be exact) of the "many, many complaints" insureds have made about their insurers following the ravaging Hurricane Super Storm Really Big Storm Sandy.  Yes, Governor, I suppose 742 complaints could be called "many".  But that number is the total of all complaints of the 329,156 claims reported on those report cards as of November 27, 2012, or less than ¼ of 1% of all claims filed.  99.78% is a pretty good grade on any report card in any school or industry, I would say.  And the number of complaints that were warranted must be less than that.  Which is why, I suppose, New Yorkers needed this emergency regulation and additional executive order right now, right?

Somewhere, some law professor who teaches administrative law must be salivating over what Governor Cuomo and Superintendent Lawsky have gifted him or her for syllabus material for an upcoming semester.  Moratoriums, executive orders, and emergency regulations, oh my. 

Law and sausage. 

Notice of Consolidated Proposed Consensus Rulemaking to Correct Out-of-Date Hyperlinks and References as a Result of the Consolidation of the New York State Insurance and Banking Departments Into a New Department of Financial Services

How could I have missed it with a title so clear and succinct?

Since October 3rd of last year, when the New York State Banking and Insurance Departments consolidated into a single Department of Financial Services, I've been waiting for the DFS to announce the corrected verbiage for the "Should you wish to take this up with..." consumer advisory paragraph required by Regulation 64.  You know, the one that instructs insureds and claimants how to skew your company's consumer complaint ratio.  I blogged about that paragraph -- and in what letters it belongs and doesn't belong -- more than four years and four months ago.  If you work in claims for a personal property or auto insurer that does business in New York and don't recall reading that post, you should do so now by clicking here.

Well on July 18, 2012, the DFS proposed a consolidated consensus rulemaking that, among other things, replaces the old and outdated New York State Insurance Department references and hyperlink in the advisory paragraph with new and up-to-date references to the DFS.  The new advisory paragraph will thus read:

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: 25 Beaver 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.

Although the 45-day public comment period for this new language expired on September 1, 2012, we still wait for our newly activated ChangeDetection.com subscription (see the immediately preceding post) to register the listing of the Twelfth Amendment to 11 NYCRR 216 (a/k/a Regulation 64) among the Department's final adoptions. 

I understand that some New York insurers, perhaps recognizing that this is a consensus rulemaking that is not expected to garner any objections, have already changed their letters and forms to comport with the new language, even though the proposed amendment technically has not yet taken effect.  This new paragraph becoming the required one is not an if, but a when.

Little known factoid:  the consumer advisory paragraph is also found on Page 2 of the prescribed NF-10 Denial of Claim Form for New York no-fault claims.  Once this consolidated rule goes into effect, including its Fourth Amendment to 11 NYCRR 65-3 (a/k/a Regulation 68-C), New York no-fault insurers will need to begin using the revised or "new" NYS Form NF-10.

Homeowner Insurer's Failure to Timely Respond to Insured's Proof of Loss or Send 90-Day Delay Letters Does Not Preclude Exclusion-Based Coverage Defenses

PROPERTY – HOMEOWNERS – PROOF OF LOSS – REGULATION 64 – 90-DAY DELAY LETTERS – DEFENSE PRECLUSION
Mallory v. Allstate Ins. Co.
(2nd Dept., decided 12/6/2011) 

Section 216.6 (c) of New York Insurance Regulation 64 (Title 11 NYCRR Part 216) requires an insurer, "[w]ithin 15 business days after receipt by the insurer of a properly executed proof of loss and/or receipt of all items, statements and forms which the insurer requested from the claimant," (30 days if the insurer suspects that the claim involves arson) to advise a claimant, or a claimant's representative, in writing, (1) of its acceptance or rejection of the claim, or (2) that it needs more time to determine whether the claim should be accepted or rejected. Thereafter, if the claim remains unsettled, unless the matter is in litigation or arbitration, the insurer must, 90 days from the date of the initial letter setting forth the need for further time to investigate, and every 90 days thereafter, send to the claimant or the claimant's authorized representative a letter setting forth the reasons additional time is needed for investigation.  These letters are sometimes called "delay letters" by property claims representatives.

What if the insurer fails to comply with this regulatory requirement by not responding to the insured's proof of loss or claim submission or sending the 90-day delay letters within the required time period?  Is the insurer precluded from raising and relying on policy exclusions to deny coverage?  No, says the Appellate Division, Second Department.  Again.

Plaintiff commenced this action to recover the proceeds of a fire insurance policy. Allstate asserted several affirmative defenses based on policy exclusions. Plaintiff moved to dismiss Allstate's exclusion-based affirmative defenses on the ground that it was precluded from raising those defenses because of its failure to comply with 11 NYCRR § 216.6(c) in processing the plaintiff's claim.  Supreme Court denied plaintiff's motion and, reaffirming its 2004 decision in De Marinis v Tower Ins. Co. of N.Y., the Appellate Division AFFIRMED:

In De Marinis v Tower Ins. Co. of N.Y. (6 AD3d 484, 486-487), this Court held that a failure to comply with 11 NYCRR 216.6(c) does not preclude an insurance company from relying on a policy exclusion to disclaim coverage. We decline the plaintiff's invitation to overrule De Marinis. Accordingly, the plaintiff did not demonstrate that the defenses were without merit as a matter of law (see CPLR 3211[b]; Galasso, Langione & Botter, LLP v Liotti, 81 AD3d 880, 882). 

The potential consequence of not complying with 216.6(c) is administrative sanction, not defense preclusion.

Editor's Note (02.07.14) ~~  The New York Court of Appeals unanimously AFFIRMED this decision on August 28, 2012, holding:

Under the facts of this case, the Appellate Division correctly determined that an insurer's failure to comply with 11 NYCRR 216.6 (c) in processing a claim does not preclude that insurer from relying upon a policy exclusion to disclaim coverage.

New York Insurance Regulation 64 (11 NYCRR Part 216) -- Updated Link

Editor's Note (11.14.16) ~~  I've again updated and re-posted the document again to bring it current through November 14, 2016.  The updated version is HERE.

Editor's Note (02.06.14) ~~  I've updated and re-posted the document again to bring it current through January 29, 2014.  The updated version is here. 
 
Editor's Note (11.30.12) ~~ If you are looking for the Twelfth Amendment to Regulation 64, issued by the New York State Department of Financial Services as an emergency regulation on November 29, 2012, click HERE.

Editor's Note (10.03.12) ~~  I've updated the document to bring it current through September 21, 2012.  There may be some amendments to it soon, in which case I'll re-post the revised version.  Those who would rely on the provisions of Regulation 64 are always best to check the official version, which is available via this link.

__________________________________________________________________________________________________________

Back in March 2010 I posted a link to a single electronic copy of New York's Insurance Regulation 64 (11 NYCRR Part 216), which had resided on the then New York State Insurance Department's website.  That link was very, very popular ever since, generating a good deal of hits to this blog.  

Unfortunately, the recent transmogrification of the New York State Insurance and Banking Departments into the New York State Department of Financial Services has shattered all of this blog's NYS Insurance Department website links.  One would think some money could have been found even in New York's austerity budget for someone to point all old NYSID links to their new NYSDFS counterparts.  Would that have been so hard?

I'm working on restoring all broken links to Insurance Department Department of Financial Services web resources and citations on this blog.  For starters, I've created and uploaded to the filing cabinet of my own Google Site another single electronic copy of the very popular New York's Insurance Regulation 64 (11 NYCRR Part 216). You can find that electronic copy here or by clicking on its link in the New York Insurance Resources widget a bit down on the right side of this page.  I looked everywhere on the Department of Financial Services' new website for the Insurance Department's copy of Regulation 64 but alas, it wasn't there.  Imagine that -- no copy of the very regulation that proscribes unfair claims and settlement practices by insurers.  Some conspiracy theorists will likely posit that this was deliberate. 

In any event, this document now resides on a site that I control, and it claims to be current through October 21, 2011.

Should You Wish To Increase Your Consumer Complaint Ratio

It's never been easier to drive a New York insurer's consumer complaint ratio higher. Insureds or their "authorized" representatives can now sit at their computers at all hours of the day and night (just like coverage bloggers) and file online electronic complaints against their insurers. Beats licking a 42¢ stamp.

What I've never understood is the seeming eagerness of some insurers to promote or facilitate the filing of consumer complaints -- not by misbehaving, but by tacitly inviting their insureds to complain, in every piece of correspondence that leaves the insurer's offices. Earlier today, for example, I saw such a misplaced invitation in a letter denying commercial auto liability coverage to a general contractor for injuries from a workplace accident. I'll explain.

Most New York insurers know that Regulation 64 (11 NYCRR Part 216) requires certain letters to "prominently set out" the following advisory paragraph (see Editor's Note of 01.28.14 below):

Should you wish to take this matter up with the New York State Insurance Department, you may file with the Department either on its website at www.ins.state.ny.us/complhow.htm or you may write or visit the Consumer Services Bureau, New York State Insurance Department, at: 25 Beaver Street, New York, NY 10004; One Commerce Plaza, Albany, NY 12257; 200 Old Country Road, Suite 340, Mineola, NY 11501;or Walter J. Mahoney Office Building, 65 Court Street, Buffalo, NY 14202.

Many New York insurers apparently remain uncertain, however, 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 disclaimer and denial letter written solely with respect to other than personal property claims, such as real property/structure or ALE/LOU claims, or liability coverage claims; or
• every other 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?

I'm a less-is-more, strict constructionist, kind of coverage attorney when it comes to regulatory issues such as this. If it were my call (which I openly concede it is not), I'd follow the reg. Reduce toner usage AND one's consumer complaint ratio at the same time. What could be better? You insurer Reg 64 compliance people won't mind, I'm sure. Unless you really like responding to consumer complaints, in which case you may want to consider printing the advisory paragraph on bills and policy forms, as well. Or not.

Editor's Note (12.07.10) ~~  Since originally posting this back in May 2008, it has come to my attention that the New York State Insurance Department takes the position that if a policy under which coverage is being denied includes personal property coverage, sch as a homeowners policy, a letter rejecting any element of the claim must include the advisory paragraph regardless of whether the claim is just for building or dwelling coverage.  For that reason and although I may disagree with the Insurance Department on this point, I've struck the reference to denials for other than personal property claims in the above bullet list.

Editor's Note (01.28.14) ~~ See today's blog post for the updated verbiage of the advisory paragraph.