The Office of General Counsel issued the following informal opinion on October 22, 2002, representing the position of the New York State Insurance Department.
Regulation 68 Effective Dates
1. When is the regulation requirement that simple 2% interest must be paid by insurers for overdue claims made effective?
2. When is the regulation requirement that an insurer is given fifteen days in which to request additional verification from a claimant, in order to establish proof of claim, made effective?
1. The requirement that insurers shall pay 2% interest per month on overdue claims as per Section 65-3.9(a) of Regulation 68-C, is effective for all No-Fault claims arising from motor vehicle accidents which occur on and after April 5, 2002.
2. The requirement that an insurer is given up to 15 days to request additional verification from a claimant to establish proof of claim, pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 65-3.5(b)(2002), is effective for all No-Fault claims submitted to an insurer on and after April 5, 2002.
Attorney A requested clarification as to these two items based upon information contained in The Frequently Asked Questions ("FAQ") sections "About the New Automobile No-Fault Regulation 68" which appear in separate website areas for both Consumers and Insurers, and provides answers to questions about the effective dates of various parts of Regulation 68 and the Emergency First Amendment to Regulation 68.
As a result of questions arising from the delayed implementation of the current No-Fault Regulation 68, caused by pending litigation with respect to implementation of the regulation (which caused the regulations original effective date of September 1, 2001 to be postponed until April 5, 2002), the Department posted an FAQ with respect to when different sections of the new regulation would take effect, so as to eliminate any confusion based upon the delayed implementation. The FAQ addressed the questions concerning the effective dates of new claims procedures by stating that
With some clarifications or exceptions, the new claims practice procedures contained in Regulation 68-C are in effect as of April 5, 2002. The following are the clarifications or exceptions:
A. Simple interest will be paid by insurers for overdue claims arising from accidents that occur on or after April 5, 2002.
Based upon this answer, clarification of Attorney As questions is as follows:
1) With respect to the payment of simple 2% interest, it is specifically stated that this requirement will become effective and be applicable to all overdue claims arising out of accidents which occur on and after April 5, 2002; and
2) As the new 15 day verification period is a claims procedure, that provision is effective for all claims that are submitted on and after April 5, 2002.
For further information you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City Office.