Why Trust This Analysis
This article is part of our ongoing bad faith coverage, with 16 published articles analyzing bad faith issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
New York’s no-fault insurance system operates under strict regulatory guidelines designed to ensure fair claims processing. One key regulation, 11 NYCRR 65-3.2(b), prohibits insurance companies from taking adversarial positions during claims processing. However, when insurers violate this regulation, the legal consequences and available remedies for injured parties remain unclear.
A recent Appellate Term decision in Integral Assist Med., P.C. v Tri-State Consumer Ins. Co. touched on this issue but left important questions unanswered. The case highlights a critical gap in New York insurance law: while some regulatory violations are treated as purely administrative matters, others may give rise to more significant legal claims, including potential bad faith or consumer protection violations.
Understanding these distinctions is crucial for both healthcare providers and patients navigating no-fault insurance claims, as the remedies available can vary dramatically depending on how courts classify specific regulatory violations.
Jason Tenenbaum’s Analysis:
Integral Assist Med., P.C. v Tri-State Consumer Ins. Co., 2017 NY Slip Op 50103(U)(App. Term 2d Dept. 2017)
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“There is no merit to plaintiff’s argument on appeal that defendant “clearly took an adversarial position” during claims processing in violation of 11 NYCRR 65-3.2 (b).”
Assume that Defendant did take an adversarial role in the claims processing. What would happen at that point? The case on point states that a violation of 3.8(b)(4) is an administrative issue, not one that leads to preclusion due to its violation. Does a violation of 3.2(b) lead to the same result? Or, does this violation allow (under the right circumstance) an extra-contractual claim or a GBL 349 claim? The case law will have to be further developed.
My thinking is that a violation of 3.2(b) is not enough to impact a first-party no-contractual claim. But, this falls into the gambit of 349 and under certain extreme circumstances, bad faith.
Key Takeaway
The legal implications of violating 11 NYCRR 65-3.2(b) remain undeveloped in New York case law. While some regulatory violations are purely administrative, others may support broader claims under General Business Law Section 349 or bad faith theories. The distinction between administrative violations and actionable claims will require further judicial clarification as insurance dispute litigation continues to evolve.
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Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
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Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
If you need legal help with a bad faith matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.
