New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel has issued the following informal opinion on May 10, 2000, representing the position of the New York State Insurance Department.

Supplemental Uninsured Motorist Insurance and Arbitration

Questions Presented:

1. Does the New York Insurance Law require a claim for Uninsured Motorist (UM) coverage to be arbitrated as opposed to litigated between an insured and insurer?

2. Does N.Y. Comp. Codes R. & Regs. tit. 11, § 60-2 (1999) (Regulation 35-D) allow for the arbitration or litigation of claims between an insured and insurer regarding Supplemental Uninsured/Underinsured Motorist (SUM) coverage, except when the amount of the SUM coverage is equal to the amount of the UM coverage required to be provided by N.Y. Ins. Law § 3420(f)(1) (McKinney 1985 & Supp. 1999-2000)?

Conclusion:

1. No. Under the New York Insurance Law, the insured can decide whether to proceed to arbitration or litigation of UM coverage claims.

2. Yes. Under N.Y. Comp. Codes R. & Regs. tit. 11, § 60-2 (1999) (Regulation 35-D), only the insured can decide whether or not to proceed to arbitration for SUM claims or to litigation, except in the instance where the SUM coverage is equal to the minimum limits amount of the UM coverage required to be provided by N.Y. Ins. Law § 3420(f)(1) (McKinney 1985 & Supp. 1999-2000), in which case either the insured or insurer can request arbitration of disputed claims.

Facts:

An attorney involved in litigating and arbitrating SUM claims sought clarification of N.Y. Comp. Codes R. & Regs. tit. 11, § 60-2 (1999) (Regulation 35-D), as it relates to the arbitration or litigation of claims by insureds and insurers.

Analysis:

In New York State, an insured has a right to arbitration or can decide to proceed to litigation of UM coverage claims. The right to arbitrate is contained in the mandatory UM Endorsement.

Concerning SUM claims, N.Y. Comp. Codes R. & Regs. tit. 11, § 60-2 (1999) (Regulation 35-D) states that the insured can decide whether or not to proceed to arbitration or to litigation, except in the instance where the SUM coverage is equal to the minimum limits amount of the UM coverage required to be provided by N.Y. Ins. Law § 3420(f)(1) (McKinney 1985 & Supp. 1999-2000). In that instance, either the insured or insurer can request arbitration of SUM claims.

For further information you may contact Attorney Meredith S. Katz at the New York City office.