Key Takeaway
Court ruling on Insurance Law Section 5107 requiring out-of-state insurers to provide New York no-fault benefits when vehicles operate in NY state.
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).”
(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”
Related Articles
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- Personal jurisdiction requirements in New York no-fault insurance cases
- Collateral estoppel principles in no-fault arbitration proceedings
- Medical provider arbitration limitations in fraud and RICO matters
Legal Update (February 2026): Since this 2016 post, Insurance Law § 5107 and its implementing regulations under 11 NYCRR 65-1 may have been subject to amendments affecting non-resident motorist coverage requirements and first-party benefit provisions. Given the high regulatory activity in New York no-fault insurance law, practitioners should verify current statutory language and regulatory interpretations, particularly regarding coverage obligations for out-of-state insurers and procedural requirements for framed issue hearings.
