STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
|George E. Pataki
Gregory V. Serio
The Office of General Counsel issued the following opinion on July 2, 2003, representing the position of the New York State Insurance Department.
Re: Supplemental Spousal Liability Coverage Notice; Permissibility of Specifying Percentage in Lieu of Dollar Amount
When an insurer provides the notice of the availability of supplemental spousal liability coverage, may the insurer specify the premium amount as a percentage of the bodily injury premium or must it specify it as a dollar amount?
In the notice of the availability of supplemental spousal liability coverage, the insurer may specify the premium amount as a percentage of the bodily injury premium if the notice clearly includes all of the relevant information, including the bodily injury premium, so that the insured can reasonably ascertain the dollar amount from the notice.
No specific facts were provided.
Insurance Law § 3420(g) generally bars coverage under a liability policy for claims brought by a spouse against the other spouse unless the policy expressly provides coverage for such claims. However, Section 3420(g) was recently amended by Chapter 584 of the Laws of 2002, to require an insurer to provide supplemental spousal liability (SSL) coverage for death of or injuries to a spouse in a policy that satisfies the requirements of Article 6 of the Vehicle and Traffic Law, upon written request of the insured. Insurance Law § 3420(g)(2) further states:
(2) Upon issuance of a motor vehicle liability policy that satisfies the requirements of article six of the vehicle and traffic law and that becomes effective on or after January first, two thousand three, pursuant to regulations promulgated by the superintendent, the insurer shall notify the insured, in writing, of the availability of supplemental spousal liability insurance. Such notification shall be contained on the front of the premium notice in boldface type and include a concise statement that supplementary spousal coverage is available, an explanation of such coverage, and the insurers premium for such coverage. Subsequently, a notification of the availability of supplementary spousal liability coverage shall be provided at least once a year in motor vehicle liability policies issued pursuant to article six of the vehicle and traffic law, including those originally issued prior to January first, two thousand three. Such notice must include a concise statement that supplementary spousal coverage is available, an explanation of such coverage, and the insurers premium for such coverage.
In accordance with the statutory requirement, the Department promulgated N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.6 as the Seventh Amendment to Regulation 35-A. In relevant part, § 60-1.6(b) provides in regard to the notice:
(2) The notification must be contained on the front of the premium notice in boldface type and include a concise statement that supplementary spousal liability insurance is available, an explanation of the insurance, and the premium for the insurance.
(3) For the purpose of this section, premium notice shall mean any one or more of the following: declarations page, premium notice, premium bill, installment bill or any attachment thereto, generally used by the insurer to communicate information to the insured concerning an insureds coverages and corresponding premiums.
In paragraph (5), the Department provided a sample notification that read as follows:
The additional premium for SSL coverage is $XX.XX. If you do not elect to purchase this coverage and do not remit the additional premium, SSL coverage is not included in your motor vehicle insurance policy.
Pursuant to the provisions of the regulation, an insurer may use the sample notification or its substantive equivalent.
It is the Departments opinion that an insurer may specify the premium as a percentage of the bodily injury premium on the premium notice if the notice clearly includes all of the relevant information so that the insured can reasonably ascertain the dollar amount from the notice, including the bodily injury premium. If the bodily injury premium is listed on a different page of the notice (for example, on the declarations page), then the notice must direct the insured to such other page. If the policy provides coverage for more than one vehicle and the bodily injury premium is separately stated for each vehicle, the notice must clearly state that the premium for SSL coverage would be a percentage of the sum of all the bodily injury premiums.
For further information you may contact Principal Attorney Paul A. Zuckerman at the New York City Office.