Framed Issue hearing on Ins Law 5107April 4, 2016

Matter of American Ind. Ins. Co. v Nova Acupuncture, P.C., 2016 NY Slip Op 02357 (2d Dept. 2016)

(1) “Section 5107 of article 51, entitled “Coverage for non-resident motorists,” provides, in pertinent part, that: “(a) Every insurer authorized to transact or transacting business in this state, or controlling or controlled by or under common control by or with such an insurer, which sells a policy providing motor vehicle liability insurance coverage or any similar coverage in any state or Canadian province, shall include in each such policy coverage to satisfy the financial security requirements of article six or eight of the vehicle and traffic law and to provide for the payment of first party benefits pursuant to subsection (a) of section five thousand one hundred three of this article when a motor vehicle covered by such policy is used or operated in this state” (emphasis added).”

(2) “The enabling regulation to Insurance Law § 5107 provides, in relevant part, that: “(b) The automobile insurance policies which are sold in any other state or Canadian province by an unauthorized insurer which is controlled by, or controlling, or under common control of, an authorized insurer shall be deemed to satisfy the financial security requirements of article 6 or 8 of the New York Vehicle and Traffic Law, and shall be deemed to provide for the payment of first-party benefits pursuant to section 5103 of the New York Insurance Law when the insured motor vehicle is used or operated in this State (11 NYCRR 65-1.8[b][emphasis added]).”

(3) “Section 5106 of the Insurance Law, entitled “Fair Claims Settlement,” provides, in pertinent part, that: “(b) Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent” (emphasis added).”

(4) “Contrary to AIIC’s contention, the fact that the subject policies do not contain any agreement to arbitrate disputes involving the payment of first-party benefits does not preclude the respondents from exercising their option to arbitrate the underlying dispute in this proceeding.”

(5) “Insurance Law § 5106(b) mandates every insurer to provide a claimant with the option to arbitrate disputes concerning first-party benefits. Indeed, the obligation to arbitrate is not found in the policies but is imposed upon the policies by the No-Fault Law”

(6) “Although the respondents allege that AIIC falls within that criteria, there is insufficient evidence in the record to make such a determination. Therefore, the matter must be remitted to the Supreme Court, Kings County, for a hearing on the issue of whether AIIC controls, is controlled by, or is under common [*2]control by or with an authorized insurer and, thereafter, for a new determination of the petition.”

This should be compared to: Hereford Ins. Co. v. Am. Indep. Ins., 136 A.D.3d 551 (1st Dept. 2016)

“Respondent, a Pennsylvania corporation that had insured the offending vehicle, has no contacts with New York, and the offending vehicle was neither registered in New York nor owned by a New York resident”





3 Responses

  1. Anonymous says:

    American Independent is in trouble, as they are under common control with at least one insurer authorized to do business in New York. Now that everyone will be able to take them to arb in New York, their years of sitting back and essentially ignoring millions of dollars of claims from New York accidents are over.

  2. seinfeld says:

    I cant remove caps ……… sorry.

    I have represented out of state insurers before. Odd thing is that the actual insurance policy says that it would adopt the rules and regulations in whatever state the accident occurs.

    also, some out of state insurers have filed a power of attorney with NY even though they do not do business in NY. Under the regs, that gives jurisdiction to NY.

    None of this is, of course, is usually volunteered by defense counsel – and they may not even be aware of it. The defense carrier I represented always admitted coverage – actually, they were one of the good guys in that regard. they stood by their insureds.

    furthermore, as defense counsel I always argued for no fault coverage. OTHERWISE, IN THE Bi SUIT, SPECIAL DAMAGES AND THRESHOLD WERE NOT IN PLAY (COVERED VS NON COVERed) and thus exposed the insured to greater liability in the BI action.

    • jtlawadmin says:

      I have a personal injury lawsuit against the good-hands people. I vehemently argued that there was no no-fault coverage for the injured person and that defendant was negligent as matter of law. The Court agreed and granted PSJ as to liability and lack of thereshold. The reason for moving for lack of threshold is simple: question 1 on the jury verdict sheet now tells the jury to award damages from time of accident to date of verdict. Beats asking the jury to find that client satisfied threshold and then going to a damages inquiry.

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