Insurance Circular Letter No. 4 (2019)
April 12, 2019
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TO: |
All Insurers Authorized to Write Motor Vehicle Insurance in New York, Motor Vehicle Self-Insurers and the Motor Vehicle Accident Indemnification Corporation, and Workers Compensation Providers |
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RE: |
Insurance Law § 5105 and Transportation Network Company Vehicles |
STATUTORY REFERENCES: Insurance Law § 5105 and Vehicle and Traffic Law Article 44-B
I. Purpose
The purpose of this circular letter is to provide guidance to all insurers authorized to write motor vehicle insurance in New York, motor vehicle self-insurers, and the Motor Vehicle Accident Indemnification Corporation (collectively, “no-fault insurers”) and to all compensation providers[1] regarding transportation network company (“TNC”) vehicles and the application of Insurance Law § 5105 (the “intercompany loss transfer provisions”) to TNC vehicles.
II. Background
Article 51 of the Insurance Law (otherwise known as the “no-fault law”) mandates that every motor vehicle owner’s liability insurance policy issued in satisfaction of the requirements of N.Y. Vehicle and Traffic Law (“VTL”) Article 6 or 8 provide coverage for “basic economic loss,” including health-related expenses, lost earnings, and certain other reasonable and necessary expenses, up to $50,000 per person, for individuals who sustain injuries arising out of the use or operation of a motor vehicle in New York State.
Under Insurance Law § 5105 (the “inter-company loss transfer provisions”), a no-fault insurer that pays first party benefits to a “covered person” under no-fault or a compensation provider that pays compensation benefits to a claimant may recover such payments from a no-fault insurer whose insured is a covered person under no-fault and who is found to be at-fault for the accident. However, this right to recover exists only if: (1) at least one of the vehicles involved in the accident weighs more than 6500 pounds unloaded; or (2) one of the vehicles involved is used principally for the transportation of persons or property for hire.
Part AAA of Chapter 59 of the Law of 2017 added a new VTL Article 44-B to govern the operations of TNC vehicles. VTL Article 44-B applies to a TNC vehicle while the TNC driver is: (1) logged onto the TNC’s digital network; or (2) engaged in a TNC prearranged trip as those terms are defined in VTL § 1691. A TNC driver may not accept a prearranged trip in New York City pursuant to VTL § 1692(9) or any county or city that enacts a local law pursuant to General Municipal Law § 182 prohibiting the pick-up of any person by a TNC within the geographic boundaries of the county or city.[2] Article 44-B thus does not apply to trips originating in New York City. As of this date, no county or city has enacted such a law and thus TNCs may currently pick up passengers anywhere in New York outside of New York City. It also does not apply to trips originating outside of New York State because the definition of “TNC vehicle” in VTL § 1691(1) is limited to a vehicle used to provide a prearranged trip originating within New York State.
The Department of Financial Services (“Department”) has received questions as to whether a TNC vehicle is a vehicle used principally for the transportation of persons for hire under Insurance Law § 5105.
III. Discussion
The Department believes that the Legislature intended to exempt TNC vehicles from the intercompany loss transfer provisions under Insurance Law § 5105. The definition of “TNC vehicle”, as set forth in VTL § 1691, specifically excludes a taxicab, livery vehicle, black car, limousine, luxury limousine, and a for-hire vehicle. VTL § 1692(1) further states that neither a TNC nor a TNC driver shall be deemed to provide taxicab or for-hire vehicle service while operating as a TNC or TNC driver pursuant to Article 44-B. In addition, Part AAA of Chapter 59 exempted TNC vehicles from many of the laws that generally apply to for-hire vehicles and subjected TNC vehicles to new requirements under new VTL Article 44-B and amendments to the Insurance Law and other laws. For example, Part AAA amended the Insurance Law to prohibit the use of a vehicle as a TNC vehicle from being considered when determining whether the vehicle is being used predominantly for non-business purposes under Insurance Law § 3425.
For these reasons, a no-fault insurer or compensation carrier should not invoke the intercompany loss transfer provisions under Insurance Law § 5105 solely based on one of the vehicles being a TNC vehicle, because a TNC vehicle is not a “for-hire” vehicle under VTL §§ 1691 and 1692, and therefore, is not “a vehicle used principally for the transportation of persons for hire” within the meaning of Insurance Law § 5105.
However, trips originating in New York City or any county or city that enacts a local law pursuant to General Municipal Law § 182 remain subject to all the laws that generally apply to for-hire vehicles and remain subject to the intercompany loss transfer provisions of Insurance Law § 5105.
IV. Conclusion
An insurer should not invoke the intercompany loss transfer provisions under Insurance Law § 5105 solely based on one of the vehicles being a TNC vehicle.
Please direct any questions regarding this circular letter to Camielle Barclay, Associate Attorney, Office of General Counsel, by mail at New York State Department of Financial Services, One State Street, 20th Floor, New York, New York 10004, or by email at [email protected].
Very truly yours,
Nathaniel Dorfman
General Counsel
1] Insurance Law § 5102(l) defines “compensation provider” as the State Insurance Fund or the person, association, corporation, insurer, or statutory fund liable under state or federal laws for the payment of workers’ compensation benefits or disability benefits under Workers’ Compensation Law Article 9.
[2] General Municipal Law § 182 permits any county and any city with a population of 100,000 but less than 1,000,000 as of the last decennial census to prohibit the pick-up of any person by a TNC within the geographic boundaries of the county or city, except that, if a county has a city with a population of 100,000 or more, then the county’s prohibition would not apply in that city.