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

The Office of General Counsel issued the following informal opinion on March 20, 2001, representing the position of the New York State Insurance Department.

RE: Insurance Law § 3426 and "Free Look"

Question Presented:

May an insurer voluntarily waive its right, pursuant to N.Y. Ins. Law § 3426(b) (McKinney 2000), to cancel a policy during the first sixty days that a covered policy is initially in effect?

Conclusion:

An insurer may voluntarily waive its right to cancel a policy during the first sixty days that the covered policy is in effect.

Facts:

The Department was requested to provide confirmation that nothing would preclude an insurer from voluntarily waiving its right to cancel a policy during the first sixty days that it is in effect.

Analysis:

During the first sixty days that an insurance policy subject to N.Y. Ins. Law § 3426 (McKinney 2000) is initially in effect, pursuant to subsection (b), an insurer may cancel the policy for any reason not otherwise prohibited by law. Since Section 3426 establishes minimum requirements of cancellation and nonrenewal for commercial property/casualty policies, an insurer is generally not precluded from providing terms that are more favorable to the insured. Thus, an insurer may voluntarily agree on a non-discriminatory basis not to invoke its sixty day "free look" rights.

For further information you may contact Senior Deputy Superintendent & General Counsel Kevin M. Rampe at the New York City Office.