The Office of General Counsel issued the following informal opinion on October 18, 2001, representing the position of the New York State Insurance Department.
RE: No-Fault Additional Verification.
When an insurer requests additional verification from a No-Fault claimant after the initial receipt of a claim submission and the request is made later than 10 days after receipt of the claim submission, but less than 30 days after receipt of that submission, must the insurer pay or deny the claim within 30 days after receipt of the initial claim?
No. The insurer must deny or pay the claim within 30 days after receipt of the additional verification, but the 30 day period will be reduced by the number of days beyond the 10 day period until the insurer requests the additional verification, so long as the request is made less than 30 days after receipt of the initial claim submission.
No specific fact pattern was provided.
N.Y. Ins. Law § 5106(a)(McKinney 2000), which governs the payment of No-Fault benefits, provides that payments of these first party benefits " are overdue if not paid within thirty days after the claimant provides proof of the fact and amount of the loss sustained."
This provision is given effect in the Department's No-Fault Regulation 68. Several provisions in the regulation address the applicable time periods when an insurer requests additional verification information from a claimant in order to determine sufficient proof of claim. N.Y. Comp. Codes R. & Regs. tit.11, § 65.15(d)(1) requires that an insurer shall forward any required verification forms to a claimant within ten business days after receipt of the completed application for No-Fault benefits. If the verification information received is insufficient, § 65.15(d)(2) provides the insurer with another ten day period after receiving the initial verification information to request additional information in order to establish proof of claim. In either of these situations, Section 65.15(g)(1)(i) provides that No-Fault benefits are overdue "if not paid within thirty calendar days after the insurer receives verification of all of the relevant information requested " pursuant to subdivisions (d)(1) and (2).
The question concerning the effect of an insurer's failure to request additional verification within ten days after receipt of a claim submission was recently addressed by the court in Liberty Queens Medical v. Tri-State Consumer Insurance, in a decision issued by Justice Kenneth L. Gartner, District Court of Nassau County, First District, Civil Part on August 9, 2001. In this case, the insurer requested additional verification from the plaintiff/provider assignee eleven business days after receiving the initial claim. The plaintiff argued that since the request for verification was made after the ten day period provided for under § 65.15(d)(1), the insurer should not receive the benefit of a thirty day extension in which to pay or deny the claim after receipt of the additional verification, as provided for under § 65.15(g)(1)(i). Rather, the plaintiff contended that since the insurer had failed to make a timely verification request, it was required to pay or deny the claim within 30 days after receipt of the initial claim. In this particular instance, the insurer would have 19 days after the 11th day verification request was made in which to deny the claim.
In addressing this question, Justice Gartner properly relied upon § 65.15(g)(10). That provision specifically states that for purposes of counting the 30 calendar days after receipt of proof of claim, when the claim becomes overdue pursuant to Section 5106(a), " any deviation from the rules set out in this section shall reduce the 30 calendar days allowed " The court recognized that the "unmistakable regulatory intent" was that any delay by the defendant insurer in sending out forms requesting additional verification "will act to shorten the defendant insurer's time for considering the claim upon receipt of full proof, but will not wholly bar the insurer from obtaining the benefit of a deferred period to obtain and consider the required proof."
The Department concurs with the court's analysis of the applicable law and result reached under the facts presented.
For further information, you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City office.