NEW YORK STATE
INSURANCE DEPARTMENT

THIRD AMENDMENT TO REGULATION NO. 35-D
(11 NYCRR 60-2)

SUPPLEMENTARY [UNINSURED] UNINSURED/UNDERINSURED
MOTORISTS INSURANCE

I, Neil D. Levin, Superintendent of Insurance of the State of New York, pursuant to the authority granted by sections 201, 301, and 3420 of the Insurance Law and Chapter 568 of the Laws of 1997, do hereby promulgate the following Third Amendment to Part 60-2 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation No. 35-D), to take effect upon publication in the State Register, and to read as follows:

(MATTER UNDERLINED IS NEW; MATTER IN BRACKETS IS DELETED)

Subsection (a) of Section 60-2.0 is amended to read as follows:

(a) This Subpart implements section 3420(f)(2) of the Insurance Law, which requires motor vehicle liability insurers to provide, at the option of the insured, supplementary [uninsured] uninsured/underinsured motorists (SUM) insurance coverage to all policyholders in New York State.

 

Subsection (e) of Section 60-2.1 is amended to read as follows:

(e) [Provided that SUM limits do not exceed the third-party bodily injury liability limits purchased by the policyholder, insurers:] (1) An insurer shall offer:

(i) SUM limits, in a motor vehicle liability insurance policy with split limits, up to [$100,000] $250,000 per person per accident and, subject to such limit for one person, [$300,000] $500,000 per accident; [and

(2) may offer SUM limits that exceed $100,000 per person per accident and, subject to such limit for one person, $300,000 per accident.] or

(ii) a SUM limit, in a motor vehicle liability insurance policy with a combined single limit, up to $500,000 per accident.

(2) An insurer is not required to offer SUM limits in the motor vehicle liability insurance policy in the amounts specified in subparagraphs (i) and (ii) of paragraph (1) of this subdivision, if, in lieu thereof:

(i) The insurer offers motor vehicle liability limits in amounts:

(a) greater than $100,000 because of bodily injury to or death of one person in any one accident, and, subject to such limit for one person, $300,000 because of bodily injury to or death of two or more persons in any one accident; or

(b) greater than a combined single limit of $300,000 because of bodily injury to or death of one or more persons in any one accident; and

(ii) The insurer offers, in the motor vehicle liability policy;

(a) SUM coverage with split limits of $100,000 per person per accident and, subject to such limit for one person, $300,000 per accident; or

(b) SUM coverage with a combined single limit of $300,000 per accident; and

(iii) The insurer also makes available a personal umbrella liability policy with limits up to at least $500,000, and the insurer provides SUM coverage in the umbrella policy so that the total SUM coverage in the motor vehicle liability insurance policy and the personal umbrella liability policy shall be up to at least $500,000.

(3) An insurer may offer SUM limits that exceed the amounts specified in paragraphs (1) or (2) of this subdivision.

(4) Nothing in this section shall be construed to require an insurer to offer any particular minimum or maximum amount of third-party bodily injury liability limits.

(5) Notwithstanding any other provision of this subdivision, an insurer shall not provide in a policy SUM limits in an amount that exceeds the third-party bodily injury liability limits offered by the insurer and purchased by the policyholder in that policy.

 

Subsection (a) of Section 60-2.2 is amended to read as follows:

(a) Every insurer writing automobile liability insurance that satisfies the requirements of article 6 or 8 of the Vehicle and Traffic Law shall, with all new policies issued to become effective on and after [October 1, 1993] March 9, 1998 and all policies renewed to become effective on and after [October 18, 1994] March 9, 1998, provide a written notice in concise language that shall include:

(1) a statement that SUM coverage is available, including the SUM limits being offered for purchase;

(2) the provisions set forth in subdivisions (a), (b) and (c) of section 60-2.1 of this Subpart and an explanation of the difference between uninsured motorists coverage and supplementary [uninsured] uninsured/underinsured motorists coverage; and

(3) the examples about SUM coverage set forth in subdivision (b) of this section.

(b) The following examples (using the per person limits) illustrate the proper application of SUM coverage:

(1) Example One:I

Insured's Bodily Injury Damages [$150,000] $300,000
Insured's Liability Limit [$250,000] $500,000
Insured's SUM Limit [$100,000] $250,000
Other Motor Vehicle Liability Limit $25,000

Note: In this example, the insured has purchased the maximum amount of SUM coverage that must be offered by the insurer, provided that the insured has purchased bodily injury liability limits of at least $250,000. Insured recovers $25,000 from the negligent owner or operator of the other motor vehicle, and [$75,000] $225,000 ([$100,000] $250,000 minus $25,000) under the SUM coverage, for a total recovery of [$100,000] $250,000.

However, in the event that the negligent owner or operator of the other motor vehicle had no liability insurance at all, the insured would collect [$100,000] $250,000 in SUM coverage from the insured's own insurer.

The text of all other examples remains unchanged.

 

Subdivisions (b) through (e) of section 60-2.3 are relettered (c) through (f) and a new subdivision (b) is added to read as follows:

(b) If SUM coverage is provided under a personal umbrella liability policy;

(1) The limits shall be excess of the SUM coverage provided in the underlying motor vehicle liability policy;

(2) The coverage shall be consistent with all applicable requirements of the SUM endorsement prescribed in this section; and

(3) The declarations page shall state the SUM limits.

 

The new subsection (c) of Section 60-2.3 is amended to read as follows:

(c) Every SUM endorsement issued shall be the Supplementary [Uninsured] Uninsured/Underinsured Motorists Endorsement prescribed by subdivision [(e)] (f) of this section[, except that until January 1, 1997 an insurer may continue to issue the endorsement prescribed by such subdivision prior to August 15, 1996].

 

The title and first paragraph of the new subsection (f) of Section 60-2.3 are amended to read as follows:

SUPPLEMENTARY [UNINSURED] UNINSURED/UNDERINSURED MOTORISTS ENDORSEMENT-NEW YORK

We, the company, agree with you, as the named insured, in return for payment of the premium for this coverage, to provide Supplementary [Uninsured] Uninsured/Underinsured Motorists (SUM) coverage, subject to the following terms and conditions:

 

Conditions 7 and 8 of the new subsection (f) of Section 60-2.3 are amended to read as follows:

7. Non-Stacking: Regardless of the number of vehicles involved, persons covered, claims made, vehicles or premiums shown in this policy, or premium paid, the limits, whether for uninsured motorists coverage or supplementary [uninsured] uninsured/underinsured motorists coverage, shall never be added together or combined for two or more vehicles to determine the extent of insurance coverage available to an insured injured in the same accident.

8. Priority of Coverage: If an insured is entitled to uninsured motorists coverage or supplementary [uninsured] uninsured/underinsured motorists coverage under more than one policy, the maximum amount such insured may recover shall not exceed the highest limit of such coverage for any one vehicle under any one policy, and the following order of priority shall apply:

(a) a policy covering a motor vehicle occupied by the injured person at the time of the accident;

(b) a policy covering a motor vehicle not involved in the accident under which the injured person is a named insured; and

(c) a policy covering a motor vehicle not involved in the accident under which the injured person is an insured other than a named insured.

Coverage available under a lower priority policy applies only to the extent that it exceeds the coverage of a higher priority policy.

 

Section 60-2.4 (b) is amended to read as follows:

Arbitration of SUM claims.

(b) Qualifications of arbitrators for a hearing held in New York State.

(1) Arbitrator screening committee. The superintendent shall appoint an advisory committee of six members, who will review the qualifications of applicants for the position of supplementary [uninsured] uninsured/underinsured motorists arbitrator for hearings to be held in New York State and review the performance of the appointed arbitrators. The screening committee shall make recommendations to the superintendent pertaining to the appointment and dismissal of SUM arbitrators. The committee shall consist of one representative of the New York State Bar Association, one representative of the New York State Trial Lawyers Association, two representatives of insurers, a nonvoting AAA representative and a nonvoting representative of the Insurance Department. Tie votes shall be reported as such to the superintendent.

 

I, Neil D. Levin, Superintendent of Insurance of the State of New York, do hereby certify that the foregoing is the Third Amendment to 11 NYCRR 60-2 (Regulation 35-D), promulgated by me on January 11, 1999, pursuant to the authority granted by Sections 201, 301 and 3420 of the Insurance Law and Chapter 568 of the Laws of 1997, to take effect upon publication in the State Register.

Pursuant to the provisions of the State Administrative Procedure Act, prior notice of the proposed amendment was published in the State Register on November 4, 1998. No other publication or prior notice is required by statute.

 

________________________
Neil D. Levin
Superintendent of Insurance

January 11, 1999