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 opinion on February 15, 2002, representing the position of the New York State Insurance Department.

RE: Fraud Warning Statement on Applications for Personal Auto Insurance.

Question Presented:

What are the New York Insurance Law requirements regarding the fraud warning statement required on applications for personal automobile insurance?

Conclusion:

The notice requirement on personal automobile insurance applications is required by N.Y. Ins. Law § 403(e) (McKinney 2000), which sets forth warning language to use on all applications for automobile insurance, including personal automobile insurance. Regulation 95 (N.Y. Comp. Codes R. & Regs. tit. 11, § 86.4 (1998)) pertains to applications for commercial insurance and all claims forms for insurance including personal automobile insurance, but does not cover applications for personal automobile insurance. However, the inquirer may wish to use similar language in personal automobile insurance applications.

Facts:

The inquirer’s company is revising its applications for personal automobile insurance. The inquirer wants to include the appropriate fraud warning in the correct type size on the applications produced by the company.

Analysis:

N.Y. Ins. Law § 403(e) (McKinney 2000) provides as follows:

All applications for automobile insurance and all claim forms shall contain a notice, in a form approved by the superintendent, that clearly states in substance the following:

‘Any person who knowingly makes or knowingly assists, abets, solicits or conspires with another to make a false report of the theft, destruction, damage or conversion of any motor vehicle to a law enforcement agency, the department of motor vehicles or an insurance company, commits a fraudulent insurance act, which is a crime, and shall also be subject to a civil penalty not to exceed five thousand dollars and the value of the subject motor vehicle or stated claim for each violation.’

The Insurance Department Frauds Bureau approved the following statement that should be used on all applications and claim forms for automobile insurance:

‘Any person who knowingly and with intent to defraud any insurance company or other person files an application for commercial insurance or a statement of claim for any commercial or personal insurance benefits containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, and any person who in connection with such application or claim, who knowingly makes or knowingly assists, abets, solicits or conspires with another to make a false report of the theft, destruction, damage or conversion of any motor vehicle to a law enforcement agency, the department of motor vehicles or an insurance company commits a fraudulent act, which is a crime, and shall also be subject to a civil penalty not to exceed five thousand dollars and the value of the subject motor vehicle or stated claim for each violation.’

Although it does not specifically apply to personal automobile insurance applications, the inquirer may wish to adopt the location and type size requirements set forth in N.Y. Comp. Codes R. & Regs. tit. 11, § 86.4(d) (1999) (Regulation 95) as follows:

(d) Location of warning statements and type size. (1) The warning statements required by subdivisions (a), (b) and (e) of this section shall be placed immediately above the space provided for the signature of the person executing the application or claim form and shall be printed in type which will produce a warning statement of conspicuous size. On claim forms which require execution by a person other than the claimant, or in addition to the claimant, the warning statements required by subdivisions (a), (b) and (e) of this section shall be placed at the top of the first page of the claim form or in the page containing instructions, either in print, by stamp or by attachment and shall be in type size which will produce a warning statement of conspicuous size.

For further information, you may contact Associate Attorney Jeffrey A. Stonehill at the New York City office.

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