The Office of General Counsel issued the following opinion on January 7, 2003, representing the position of the New York State Insurance Department.
Re: Settlement Check Payee.
Is there any provision in the New York State Insurance Law (McKinney 2000 & Supp. 2002) or the regulations promulgated pursuant thereto that requires an insurer to name both the claimant and his/her lawyer as the payees on a settlement check?
The New York Insurance Law (McKinney 2000 & Supp. 2002) and the regulations promulgated pursuant thereto do not specifically address this question.
No facts were presented. The inquiry was general in nature.
The New York Insurance Law (McKinney 2000 & Supp. 2002) and the regulations promulgated pursuant thereto do not specifically address this question. However, N.Y. Comp. Codes R. & Regs. tit. 11, § 216.9(a) (1995) (Reg. 64) provides:
Upon payment of $5,000 or more in settlement of any third-party liability claim, where the claimant is a natural person, the insurer shall cause written notice to be mailed to the claimant at the same time payment is made, by the insurer or its representative (including the insurers attorney), to the claimants attorney or other representative of the claimant by draft, check or otherwise.
Accordingly, if, in the context of a third party liability claim, a claim settlement of $5,000 or more is paid to the claimants attorney or other representative by either the insurer directly or by its attorney, or by the insured, who is then reimbursed by the insurer, the insurer must mail written notice to the claimant at the same time that the payment is made.
For further information you may contact Supervising Attorney Joan Siegel at the New York City Office.