Keeping in my quest – aside from some of the amusing, interesting yet irrelevant comments that find their way on here – to try to keep this blog interesting and informative, I gladly post questions that people have. Nope, we do not charge $25 for answers. The fact that you are interested enough in NY PIP law to read this and the other no-fault blogs out there is payment enough to me.
Similar to list-serves (for instance the NACBA.org list-serve that I read daily), I am happy to provide this forum for no-fault related questions This one was sent to me 2 weeks ago. I totally forgot to respond to it or to post it. It has been a little hectic here, so my apologies to the author. The author who asked it is a very competent and seasoned attorney. I am not sure (s)he wants to be identified so I will not do that. Here is the question:
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Hey Jason,
[I] was wondering what your opinion was regarding how to determine applicability of old reg v. new reg (with respect to compound vs. simple interest, of course).
I usually go by date of claim submission (pre 4/5/02 = old reg compound). But I am noticing some go by date of service, some go by date of accident, and some try to use the date of the policy issuance.
My thought is that date of bill submission is the true test, since interest is designed to penalize the carrier for delay of processing the claim. Just wondering what your thoughts were. There isn’t much case law on this individual point.
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At first blush, I wanted to say policy date. Yet, would it make sense for someone to treat 10 years after a 2000 MVA and to still be entitled to compound interest? Then again, under the same scenario, an insurer could not hold an EUO of the EIP or the provider 10 years post a 2000 MVA since those provisions were not part of the insurance policy upon which the assignor or the assignee seeks no-fault benefits. This would militate in favor of compound interest. Yet, the interest provision is not part of the policy endorsement; it is part of the regulations itself, which would suggest that the interest issue is bill specific.
What do you all think?
14 Responses
Belt Parkway Imaging, P.C. v State Wide Ins. Co., 2010 NY Slip Op 52229(U)(App. Term, 2nd, 11th & 13th Jud. Dists. 2010)
“With regard to defendant’s contention that the interest was improperly compounded, former Insurance Department Regulations (11 NYCRR) § 65.15 (h) (1) provided for interest at the rate of “two percent per month, compounded.” While the aforementioned regulation was superseded on April 5, 2002 by Insurance Department Regulations (11 NYCRR) § 65-3.9 (a), which provides for “interest at a rate of two percent per month, calculated on a pro-rata basis using a 30-day month,” the claims involved herein are all governed by the former Insurance Department Regulations.”
Does not answer the question, unless “claim” equates to bill. This case dealt with 1999 DOS’ (I think). Not on point.
It’s as on point as you’ll find. Interest doesn’t magically transform from compound to simple years after the accident date.
I disagree. It is not part of the policy endorsement. So it would depend when the bill is overdue, not when the MVA occurred. In any event, the Rabiner case is not really instructive. I just do not know if we will ever get an answer because we are almost 3 years past when the 6 year SOL involving the transition from the old regs to the new regs.
This might be a good question to ask the DOI actually.
it will come up eventually and we will get an answer. Why bother with the DOI?
Because I think I know the answer they are going to give lol. In all honesty, it was the DOI that changed “compound” to “simple”. They should be the ones that tell whether it is MVA or bill oriented.
Zuppa is probably writing a response right now. Despite his abysmal bench, I agree with whatever he will say, within reason.
Interest is based upon the contents of the policy on date of accident. It’s the same as rights to an EUO, which was litigated heavily back in the day. For MVA’s between 4/5/2002 and 4/5/2003, the insurer must show that the policy contains the new reg endorsement. After 4/5/2003, it is simple interest because the endorsement is included as a matter of law.
My 2 cents: Agree with JT here. With respect to policy requirements -i.e. 30 days to submit claim/ 45 days for bill / EUO / IME, claimant should get benefit of the policy issue date. However, claims mandates, i.e. verificaiton protocals and time frames, interest on overdue payments, etc., are not contained in the endorsement, but rather the law itself, and as such should relate to the reg in effect at the time of the claim submission – i.e., when the bill was mailed to the carrier. I think there are some older master arb decisions that use this analysis, but of course, they are buried in the garage somewhere.
What other listservs are you on?
Nacba.org. I always love how in no-fault, the Plaintiffs bar always cries about the big bad insurance companies assaulting the poor medical providers, etc. But, how about the husband whose kidney failed, his wife who has an inoperable brain tumor, the daughter that has a heart problem, and the bank that wants to foreclose on their house and the credit card companies that just do not care? Yes, that is a real case that I am pretty much doing for next to nothing. Stories like that move me. The plights of the providers….well that irritates me.
People cry about the big bad insurance companies for good reason in not all, but most cases. Would you have everyone go cry alone in the corner because other people have it worse?
Let them cry. Let their attorneys yell because no one listens when their clients cry. Don’t forget that people who get hurt in accidents receive an ancillary benefit from all this. And in most cases, it is the people who are least able to pay for their own medial care, who see their no-fault benefits cut off.
In other cases, insurance companies drive small providers out of business. Why? Because they can.
You don’t like to see billion dollar companies acting like a bullies. Neither do I. Most of us don’t. To be sure those on the other side feel the same way, but in reverse. Everyone thinks that they are fighting for the little guy in this.
Sorry, I forgot to ask: anything other than that listserv. Have you checked out Solosez.
I will give it a look this weekend. A bit busy this week. BTW, what happened to Sun – he seems to have disappeared. If Sun reads this, please say hello – your comrades are concerned.