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

David A. Paterson
Governor

Eric R. Dinallo
Superintendent

OGC Op. No. 09-04-03

The Office of General Counsel issued the following opinion on April 8, 2009, representing the position of the New York State Insurance Department.

Re: Insurer's obligation to notify the insured's authorized agent of the insurer's nonrenewal of the policy

Question Presented:

Does an insurer have an obligation to notify an insured's authorized agent if the insurer mails a notice of its intention not to renew a non-commercial automobile insurance policy to the named insured?

Conclusion:

Yes. Under N.Y. Ins. Law § 3425(h)(3) (McKinney Supp. 2009), if an insurer mails a notice of intention not to renew a non-commercial automobile insurance policy to the named insured, the insurer shall mail, deliver or transmit a copy of the notice to the insured's authorized agent or broker within seven days of the time the notice is mailed to the named insured.

Facts:

The inquirer’s inquiry is of a general nature, without reference to particular facts.

Analysis:

Insurance Law § 3425 is germane to the inquiry. The statute applies to most non-commercial automobile insurance policies other than those issued through the New York Automobile Insurance Plan. Insurance Law § 3425(a)(1) defines a "covered policy" to mean an insurance policy issued or issued for delivery in this State by an authorized insurer, on a risk located or resident in this State, and that insures against losses or liabilities arising out of the ownership, operation or use of a motor vehicle, when a natural person is the named insured.

Insurance Law § 3425(h)(3) is relevant to the inquirer’s inquiry because that provision governs an insurer's obligation to notify the insured's authorized agent or broker if the insurer mails a notice of its intention not to renew a non-commercial automobile insurance policy to the named insured. Insurance Law § 3425(h)(3) reads as follows:

(3) A copy of every notice of cancellation, reduction of limits, substitution of policy form, elimination of coverages, conditioned renewal or of intention not to renew, including the reasons therefor, or a summary of such notice, shall be mailed, delivered or transmitted to the insured's authorized agent or broker within seven days of the time such notice is mailed to the named insured. Electronic transmission or any other means of delivery or transmission of information commonly used by the insurer to communicate with agents or brokers shall be deemed sufficient for compliance with this paragraph. Failure to mail, deliver or transmit a copy of such notice to the insured's authorized agent or broker pursuant to this paragraph shall not render any such notice ineffective, provided that all of the other requirements of this section are met and shall not be considered failure to include a provision required by this section for purposes of paragraph two of this subsection. (Emphasis supplied.)

Insurance Law § 3425(h)(1), too is relevant here, because proof of mailing of a notice of intention not to renew a non-commercial automobile insurance policy constitutes sufficient proof of notice. Insurance Law § 3425(h)(1) reads as follows:

(h) (1) Proof of mailing of a notice of cancellation, reduction of limits, substitution of policy form, elimination of coverages, conditioned renewal or of intention not to renew, or proof of the mailing of the reasons therefor, to the named insured at the address shown in the policy, shall be sufficient proof of the giving of notice and the giving of reasons required by this section.

For further information, you may contact Senior Attorney Robert Freedman at the New York City office.