Key Takeaway
New York court rules insurers must prove material misrepresentation with underwriting documentation. Ameriprise failed to establish it wouldn't have issued policy.
Liliya Veksler, LCSW, P.C. v Ameriprise Ins. Co., 2018 NY Slip Op 50741(U)(App. Term 2d Dept. 2018).
“In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted defendant’s motion for summary judgment dismissing the complaint upon the ground that plaintiff’s assignor had procured the insurance policy in question by making a material misrepresentation as to his place of residence.
“A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented. To establish materiality as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins, or rules pertaining to similar risks, that show that it would not have issued the same policy if the correct information had been disclosed in the application” (Interboro Ins. Co. v Fatmir, 89 AD3d 993, 994 quotation marks and citations omitted]).
Upon a review of the record, we find that defendant failed to establish as a matter of law that it would not have issued the policy in question. Consequently, defendant did not demonstrate that the misrepresentation by plaintiff’s assignor was material.”
Clearly, Amerirpise thought it could avoid handing over the underwriting file. For non AIP cases, these is fatal. For AIP cases, I have learned that the rates are determined on a pre-set State schedule based upon residence. Thus, you do not see the “underwriting file” play much of a role on those types of cases. I suspect Ameriprise knew better, and almost slipped a fast one by the Courts.
