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 August 22, 2001, representing the position of the New York State Insurance Department.

RE: Auto Insurance Exclusion Based on Age of Driver

Question Presented:

Is it permissible under the New York Insurance Law, or the regulations promulgated thereunder, to exclude drivers who are 65 years of age or older from a policy that insures losses or liabilities arising out of the ownership, operation, or use of motor vehicles that are used predominantly for business purposes?

Conclusion:

It is impermissible to exclude drivers who are 65 years of age or older from an owner’s policy of liability insurance pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.2 (1996) (Reg. 35-A).

There is no express statutory prohibition against excluding 65-year-old-and-older drivers of motor vehicles that are used predominantly for business purposes from motor vehicle physical damage insurance. However, any such exclusion would be subject to review and approval by the Department in accordance with the standards and policy requirements of Article 23 of the Insurance Law.

Facts:

The inquiry was of a general nature, and no specific facts were provided.

Analysis:

N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.2 (1996) (Reg. 35-A) sets forth the only exclusions that may be applied to an owner’s policy of liability insurance. See Progressive Casualty Ins. Co. v. Yodice, 180 Misc.2d 863, 694 N.Y.S.2d 281 (Sup. Ct. Richmond Co. 1999). There is no provision within § 60-1.2 for excluding employees who are 65 years of age or older. Hence, it is impermissible to exclude drivers who are 65 years of age or older from an owner’s policy of liability insurance.

In addition, N.Y. Ins. Law § 3435-a (b) (McKinney 2000) states:

Insurers shall be prohibited from refusing to renew an existing motor vehicle liability insurance policy solely upon the basis of the named insured having reached sixty years of age and shall be prohibited for the purpose of policy renewal from requesting a physical examination or medical questionnaire solely on the basis of the named insured having reached sixty years of age unless such decision is based on sound underwriting and actuarial principles reasonably related to actual or anticipated loss experience.

Section 3435-a (b) has limited applicability in the case of motor vehicles that are used predominantly for business purposes, but would apply where the named insured is an individual, rather than, for example, a corporation.

There is no provision similar to N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.2 (1996) (Reg. 35-A) with respect to motor vehicle physical damage insurance. Hence, there is no express statutory prohibition against excluding 65-year-old-and-older drivers of motor vehicles that are used predominantly for business purposes from motor vehicle physical damage insurance. However, any such exclusion would be subject to review and approval by the Department in accordance with the standards and policy requirements of Article 23 of the Insurance Law. Included among these criteria are the requirements that a policy form shall not be misleading or violative of public policy and that rates shall not be excessive, inadequate or unfairly discriminatory. Additionally, such filing would have to satisfy the Department that it does not violate N.Y. Ins. Law § 2331 (McKinney 2000), which states:

No filing of a rate, rating plan, rating rule or rate manual applicable to insurance for loss of or damage to a motor vehicle other than by collision or upset, shall be approved by the superintendent if the filing is based, in whole or in part, on the age, sex or marital status of an owner or operator of an insured motor vehicle unless such filing is supported by and reflective of actuarially sound statistical data.

For further information you may contact Senior Attorney Sally A. Geisel at the New York City Office.