The Office of General Counsel issued the following informal opinion on April 12, 2002, representing the position of the New York State Insurance Department.
Re: No-Fault Insurer Medical Examinations
May a No-Fault insurer require an eligible injured person ("eligible insured") to submit to a medical examination when the insurer has been provided oral notice by the eligible injured person that such person has sustained injuries and/or is being treated by a health care provider, but such insurer has not yet received the eligible insureds written application for No-Fault benefits (NYS Form NF-2) that had been sent to the eligible insured by the insurer?
Yes. When a No-Fault insurer has knowledge that an eligible insured (the applicant for benefits) has sustained injuries and/or is being treated by a health care provider, but has not yet received the insureds written application for No-Fault benefits, under the prescribed No-Fault endorsement contained in 11 NYCRR 65-1, the insurer may require the eligible insured to submit to a medical examination.
Attorney A states that he represents a No-Fault insurer. Based upon Attorney As written inquiry and the subsequent telephone conversation between Attorney A and the Department, in Attorney As factual scenario presented, the No-Fault insurer received a phone call from the attorney for an eligible insured who stated that the eligible insured had received injuries arising out of an automobile accident and requested that the insurer send the eligible insured a written application for No-Fault benefits (NYS Form NF-2), which then was mailed to the eligible insured by the insurer.
In a subsequent conversation between the eligible insureds attorney and a claims representative of the insurer, the attorney identified a health care provider that was treating the eligible insured. The insurer thereafter contacted the provider and requested information concerning the medical treatment being provided to the eligible insured. The provider declined to provide such information. The insurer proceeded to schedule a medical examination and requested that the eligible insured submit to the examination. The Department is presuming that, in response, the attorney for the eligible insured argued that the insurer was without authority to request an examination until such time as the insurer received the completed application for benefits, and that only then could the insurer request an examination as a form of additional verification of claim. The Department notes that at the time of Attorney As factual scenario, the former version of Regulation 68 was in effect. However, under both the old and current No-Fault regulation, the applicable rules governing the situation posed are the same under both versions.
The prescribed No-Fault endorsement in New York, N.Y. Comp. Codes R. & Regs. tit. 11, § 65-1 (Regulation 68) (2002) entitled "Conditions" states that "The eligible injured person shall submit to medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require." (Emphasis added). Therefore, it is a condition precedent to coverage that the applicant must submit to a medical examination requested by the insurer when there is a reasonable basis for the request.
Under the No-Fault claims procedures established under Regulation 68, N.Y. Comp. Codes R. & Reg. tit. 11, § 65-3.4(a) (2002), when an insurer receives notice of claim from an applicant or applicants representative by telephone, it is required to request information that identifies the applicant and the policyholder, along with reasonably obtainable information regarding the time, place and circumstances of the accident, which "will enable the insurer to begin processing the claim." Section 65-3.4(b) requires that when an insurer receives any notice of claim (oral or otherwise), the insurer is required, within five business days, to mail the applicant a prescribed application for No-Fault benefits (NYS Form NF-2). These two provisions make it clear that the purpose of initial notice, oral or otherwise, is to enable the insurer to open a claims file so that it can "begin processing the claim."
As a condition of coverage under the No-Fault endorsement, and mandated under Section 65-1, the NF-2 form, or other written form containing substantially the same information as the NF-2, must be completed by the applicant and received by the insurer within 90 days. Pursuant to Section 65-3.5(a) and (b), after receipt of the written application, if the insurer requires verification from the applicant in order to present sufficient proof of claim, it has 10 business days in which to request that such verification be supplied by the applicant, and another 15 days after receipt of the verification information to require additional verification when deemed necessary by the insurer. Additionally, Section 65-3.5(d) states that if the additional verification required by the insurer is a medical examination, the insurer shall schedule the examination within 30 calendar days.
It is clear that the language of the No-Fault endorsement, requiring examinations of the claimant as a condition of coverage, "when and as often as the Company may reasonably require", is broader than the specific claims procedures contained in Section 65-3, which are applicable only to those instances when the insurer does not receive notice, or does not have knowledge, of any injury sustained by the applicant and/or treatment of the applicant by a health care provider until it has received such notice in the written application or the required verification information. Section 65-3 is not applicable to instances where the insurer has received such notice prior to receipt of a written application for benefits. Previously referenced Section 65-3.4(a) recognizes that receipt of any form of initial notice of claim enables an insurer to begin processing the claim. After receipt of such notice, the right of an insurer to reasonably require the insured to submit to medical examination becomes effective as per the language of the prescribed endorsement.
Every No-Fault endorsement issued and included in New York motor vehicle policies contains the above-cited language that conditions the payment of benefits upon submitting to reasonable requests from an insurer for a medical examination of the applicant for benefits. The key predicate for requiring such examination is that it be " reasonably require(d)."
The factual scenario Attorney A posed illustrates a clear instance where the insurer received actual knowledge of injuries and of medical treatment being provided to the eligible insured directly from the eligible insureds attorney and could anticipate that the requisite application for benefits would be sent. Clearly, under these circumstances, to deny the insurer the right to have the eligible insured examined, when it has received notice as per Sections 65-3.5(a) and (b), would preclude the insurer from having a fair and timely opportunity to medically evaluate the applicants injuries and medical treatment as provided for under the No-Fault endorsement. Section 65-3.5 is not intended to operate as a procedural bar by limiting the right of an insurer to request a medical examination to the time periods specified in the additional verification process. Rather, the verification section is intended to ensure the timely scheduling of a medical examination by a No-Fault insurer.
Therefore, where it can be demonstrated that the No-Fault insurer had knowledge that the eligible insured had sustained injuries and/or is receiving treatment from a health care provider, the insurer may fully exercise its right under the No-Fault endorsement to conduct a medical examination of the eligible insured person.
For further information you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City Office.