New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following opinion on June 22, 2005, representing the position of the New York State Insurance Department.

Re: N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.1(c)(3)(i)-(iii) (Regulation 35-A) Exclusions

Question Presented:

Are the exclusions currently codified as N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.1(c)(3)(i)-(iii) (Regulation 35-A) applicable to § 60-1.1(c)(1) and § 60-1.1(c)(2)?

Conclusion:

Yes. The exclusions currently codified as N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.1(c)(3)(i)-(iii) are applicable to § 60-1.1(c)(1) and § 60-1.1(c)(2). Please see the analysis below.

Facts Presented:

There are no presented facts.

Analysis:

N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.1(c), which was last amended February 7, 1996, currently reads as follows:

(c) A provision insuring as "insured":

(1) the named insured and, if an individual, his or her spouse if a resident of the same household with respect to the motor vehicle or vehicles;

(2) any other person using the motor vehicle with the permission of the named insured or such spouse provided his or her actual operation or (if he or she is not operating) his or her other actual use thereof is within the scope of such permission; and

(3) any other person or organization but only with respect to his, her or its liability because of acts or omissions of an insured within paragraph (1) or (2) of this subdivision. As respects any person or organization other than the named insured or such spouse the policy need not apply:

(i) to any person or organization, or to any agent or employee thereof, employed or otherwise engaged in operating an automobile sales agency, repair shop, service station, storage garage or public parking place, with respect to any accident arising out of the maintenance or use of a motor vehicle in connection therewith;

(ii) to any employee with respect to injury, sickness, disease or death of a fellow employee injured in the course of his or her employment in an accident arising out of the maintenance or use of the motor vehicle in the business of their common employer; or

(iii) to any person or organization, or to any agent or employee thereof, with respect to bodily injury, sickness, disease or death, or injury to or destruction of property arising out of the loading or unloading of the motor vehicle. The insurance shall apply separately to each insured against whom claim is made or suit is brought, provided the inclusion of more than one insured shall not operate to increase the limits of the insurer's liability.

The grammatical construction of § 60-1.1(c)(3)(i)-(iii) directs the reader to limit the application of subparagraphs (i)-(iii) to paragraph (c)(3) only. However, in promulgating § 60-1.1(c), the Insurance Department did not intend to limit the application of subparagraphs (i)-(iii) to paragraph (c)(3) as evidenced by the original language of Regulation 35-A’s Subsection (1)(c), which reads as follows:

(1)(c) A provision insuring as "insured" the named insured and, if an individual, his spouse if a resident of the same household with respect to the motor vehicle or vehicles; and also any person or organization using or legally responsible for the use of the motor vehicle, provided the actual use thereof is by or with the permission of the named insured, or if an individual, his spouse. As respects any person or organization other than the named insured or such spouse the policy need not apply (1) to any person or organization, or to any agent or employee thereof, operating an automobile sales agency , repair shop, service station, storage garage or public parking place with respect to any accident arising out of the operation thereof; or (2) to any employee with respect to injury, sickness, disease or death of a fellow employee injured in the course of his employment in an accident arising out of the maintenance or use of the motor vehicle in the business of their common employer. The insurance shall apply separately to each insured against whom claim is made or suit is brought, provided the inclusion of more than one insured shall not operate to increase the limits of the insurer’s liability.1

§ (1)(c) of Regulation 35-A was subsequently codified as N.Y. Comp. Codes R. & Regs. tit. 11, Pt. 60, and the numbering was changed to conform to the standard used therein. Part 60 was later numbered Subpart 60-1. However, in the act of codification, an unintentional error crept in that gives the impression that subparagraphs (i) to (iii) apply only to paragraph (3). Similarly, the last sentence of what is now subparagraph (iii) actually applies to the whole provision. The Department will be contacting the New York Department of State about correcting these errors.

Accordingly, the exclusions of § 60-1.1(c)(3)(i)-(iii) are also applicable to § 60-1.1(c)(1) and § 60-1.1(c)(2) because such application is in accordance with the Insurance Department’s intent. However note that since the exclusions do not relate to the insured and spouse, as a practical matter the exclusion applies only to paragraphs (2) and (3), and not paragraph (1).

For further information you may contact Senior Attorney Kristian Earl Lynch at the New York City Office.


1  Regulation 35-A, § (1)(c) (effective Jan. 1, 1959) (emphasis added).