Insurance No. 2 (2025)

March 14, 2025

TO: All Insurers Authorized to Write Motor Vehicle Insurance in New York State, the New York Automobile Insurance Plan, Rate Service Organizations, and Licensed Insurance Producers

RE: Supplemental Spousal Liability Insurance

STATUTORY AND REGULATORY REFERENCES: N.Y. Insurance Law § 3420(g) and 11 NYCRR 60-1 (Insurance Regulation 35-A)

I. Purpose

The purpose of this Circular Letter is to advise all insurers authorized to write motor vehicle insurance in New York State, the New York Automobile Insurance Plan, rate service organizations, and licensed insurance producers of amendments to Insurance Law § 3420(g) made by Chapter 356 of the Laws of 2024 (“Chapter 356”), which takes effect March 26, 2025 and applies to supplemental spousal liability (“SSL”) insurance. This Circular Letter replaces Insurance Circular Letter No. 8 (2023), which has been withdrawn.

II. Discussion

A. Background and Applicability

Insurance Law § 3420(g) defines SSL insurance as coverage for the liability of an insured, because of the death of, or injury to, the insured’s spouse, up to the liability insurance limits provided under the policy, even where the injured spouse, to be entitled to recover, must prove the culpable conduct of the insured spouse. SSL insurance, which applies to all motor vehicles covered under the policy, only covers a spouse and not a person with whom the insured has a domestic partnership or civil union.  A domestic partner or a person in a civil union would be covered under the liability section of the motor vehicle policy.

Currently, Insurance Law § 3420(g) requires motor vehicle liability insurers to provide SSL insurance to all insureds in New York State who are covered under motor vehicle liability insurance policies that satisfy the requirements of New York Vehicle and Traffic Law (“VTL”) Article 6, unless a first named insured elects, in writing, and in such form as the Superintendent of Financial Services (“Superintendent”) determines, to decline and refuse such insurance in the policy. Therefore, the law requires an insurer to automatically include SSL insurance with all such motor vehicle liability policies unless insureds specifically “opt out” of the coverage in writing.

Chapter 356 amended Insurance Law § 3420(g) to require an insurer to automatically include SSL insurance with a non-commercial motor vehicle policy subject to Insurance Law § 3425 only where the first named insured has indicated that such insured has a spouse on the insurance application.  The law still allows the first named insured to decline and refuse such insurance in writing.  Additionally, for all other policies subject to VTL Article 6, Chapter 356 amended Insurance Law § 3420(g) to require an insurer to provide SSL insurance only upon the specific written request of an insured.  Note that Insurance Law § 3420(g) does not require that an insurer automatically add or remove SSL insurance from a policy when a named insured’s marital status changes after policy issuance.  In this instance, the named insured must request the addition or removal of SSL insurance in writing.

Chapter 356 also requires an insurer to provide specific notifications to insureds as discussed below that includes a concise statement that SSL insurance is provided or available, as relevant, an explanation of the coverage, and the insurer’s premium for the coverage.

Note that the SSL insurance requirements in Insurance Law § 3420(g)(2) do not apply to umbrella liability insurance policies or for-hire motor vehicle liability policies.  See 11 NYCRR § 60-1.6(a)(2). 

B. SSL Insurance Notifications

Starting March 26, 2025, Insurance Law § 3420(g)(2)(B) requires an insurer issuing a motor vehicle liability insurance policy that satisfies the requirements of VTL Article 6 and is subject to Insurance Law § 3425 to provide notification at policy issuance to a first named insured under the policy who has indicated that such insured has a spouse on the insurance application, that the policy includes SSL insurance unless a first named insured declines and refuses such insurance in writing and in such form as determined by the Superintendent.  Insurance Law § 3420(g)(2)(C) and the 13th amendment to 11 NYCRR § 60-1.6(b) also require that an insurer issuing a motor vehicle liability insurance policy that satisfies the requirements of VTL Article 6, other than a policy to which the foregoing notification requirement applies, provide at policy issuance a notification to a first named insured that SSL insurance is available.  These notifications apply to policies issued on or after March 26, 2025. 

In addition, Insurance Law § 3420(g)(2)(B) requires, upon policy renewal or amendment on or after March 26, 2025, that an insurer issuing a motor vehicle liability insurance policy that satisfies the requirements of VTL Article 6 and includes SSL insurance under the policy, provide a notification to a first named insured that the policy includes SSL insurance unless a first named insured declines and refuses such insurance in writing and in such form as determined by the Superintendent.  

At least once a year, starting March 26, 2025, an insurer issuing a motor vehicle liability insurance policy that satisfies the requirements of VTL Article 6 that does not already include SSL insurance must provide a notification to the first named insured that SSL insurance is available.  This includes a policy where a first named insured previously declined the SSL insurance.

The notifications required by Insurance Law § 3420(g)(2)(B) and (C) must be contained on the front of the premium notice in boldface type and include an explanation of the SSL insurance and the premium for the SSL insurance.  The notifications also must include a concise statement that either the SSL insurance is included in the policy or is available, as relevant.

The 13th amendment to section 60-1.6(b) of 11 NYCRR 60-1 (Insurance Regulation 35-A) includes two sample notifications that insurers may use.  Alternatively, insurers may use notifications that are substantively equivalent thereto.  An insurer may not combine both mandatory SSL notifications into one document because this would be confusing to insureds.  An insurer should provide only the specific SSL notification, as appropriate.  

C. SSL Insurance Premium

Chapter 356 amended Insurance Law § 3420(g) to explicitly require the payment of a premium for the SSL insurance.  An insurer may not inform a first named insured that there is no charge for the SSL insurance or otherwise specify “$0.00” on the notifications. The premium for SSL insurance should be based on the bodily injury limits if there are split limits under the policy or the total liability limits if there is a combined single limit under the policy. The rate factor applicable to policies with a combined single limit should be lower than the factor for policies with split limits and an insurer may not charge a flat dollar amount for SSL insurance for all policies regardless of each policy’s liability coverage limits.  In addition, if a first named insured declines the SSL insurance, then the insurer must provide the first named insured with the appropriate premium reduction based on the insurer’s filed and approved rates and rules, even if the insurer considers the premium reduction to be nominal. 

D. SSL Insurance Declination

SSL insurance is an optional coverage.  If a first named insured elects, in writing, and in such form as the Superintendent determines, to decline and refuse SSL insurance, the policy may not include SSL insurance and an insurer may not prohibit a first named insured from declining the coverage.  The Department of Financial Services has created a new declination form that insurers must use starting March 26, 2025 to allow a first named insured to decline SSL insurance.  An insurer may modify the declination form as set forth in 11 NYCRR § 60-1.6(b)(7) and make ministerial changes, such as adding the insurer’s name and contact information.  An insurer may not combine the SSL insurance declination form and the relevant SSL insurance notification on a single form.

An insurer may obtain an electronic written declination if the insurer adheres to the requirements of Insurance Law § 3458 regarding electronic notices and documents. See 11 NYCRR § 60-1.6(a)(3). An insurer should use, as the declination’s effective date, the date the insurer receives the declination form if the form is submitted electronically or the post marked date if the form is sent via postal mail.  Pursuant to Insurance Law § 3420(g)(2)(B), as amended by Chapter 356, and 11 NYCRR § 60-1.6(a)(3), an insurer is not required to obtain a written declination at each policy renewal if a first named insured previously submitted a written declination of SSL insurance, as a signed declination is effective until rescinded in writing by a first named insured.  However, once the declination is rescinded and SSL coverage is provided, the insurer should provide the declination form at each policy renewal or amendment.

III. Conclusion

The Department expects insurers to comply with the amendments Chapter 356 made to Insurance Law § 3420(g) and with the guidance set forth in this Circular Letter. If necessary, an insurer should submit a SERFF filing to revise its policy forms and rates for the Department’s approval as soon as possible.

Please direct any questions regarding this circular letter by email to [email protected].

Very truly yours,

Bernard Ganley
Deputy Superintendent, Property Bureau