The Office of General Counsel issued the following opinion on October 31, 2003, representing the position of the New York State Insurance Department.
Re: Applicability of Section 3426(g) of the Insurance Law
Question Presented:
Does the requirement in N.Y. Ins. Law § 3426(g) (McKinney 2000) that insurers advise first-named insureds of the availability of loss information apply to Conditional Notices of Renewal and Alternative Renewal Notices?
Conclusion:
N.Y. Ins. Law § 3426 (McKinney 2000) provides that "every notice mailed or delivered by an insurer pursuant to this section shall advise the first-named insured and such insureds authorized agent or broker of the availability of loss information." (emphasis added).
Facts:
The question is general in nature.
Analysis:
N.Y. Ins. Law § 3426(g) (McKinney 2000) provides:
(g)(1) Every notice mailed or delivered by an insurer pursuant to this section shall advise the first-named insured and such insureds authorized agent or broker of the availability of loss information consistent with paragraph two of this subsection.
(2) Upon written request by the first-named insured or such insureds authorized agent or broker, the insurer shall mail or deliver the following loss information covering a period of years specified by the superintendent by regulation or the period of time coverage has been provided by the insurer, whichever is less, within twenty days of such request.
(A) Information on closed claims, including date and description of occurrence, and any payments;
(B) Information on open claims, including date and description of occurrence, and amounts of any payments; and
(C) Information on notice of any occurrences, including date and description of occurrence.
(3) The insurer may charge a reasonable fee as determined by the superintendent only for such information provided upon request, but not for such information (even in the absence of a request therefor) required to be provided.
(4) For purposes of this subsection, the term first-named insured shall include an individual certificate holder under a property/casualty group policy with respect to such certificate holders loss information.
Section 3426(g)(1) requires that every notice mailed or delivered by an insurer pursuant to this section (3426) shall advise the first-named insured and such insureds authorized agent or broker of the availability of loss information. Therefore, if an insurer issues a conditional renewal notice or an alternative renewal notice pursuant to Section 3426, subsection (g) would apply to such notices. Moreover, with regard to alternative renewal notices, N.Y. Ins. Law § 3426(e)(1)(C) (McKinney 2000) specifically provides, in pertinent part, that:
(e)(1) A covered policy shall remain in full force and effect pursuant to the same terms, conditions and rates unless written notice is mailed or delivered by the insurer to the first-named insured, at the address shown on the policy, and to such insureds authorized agent or broker, indicating the insurers intention:
(C) that the policy will not be renewed or will not be renewed upon the same terms, conditions or rates; such alternative renewal notice must be mailed or delivered on a timely basis and advise the insured that a second notice shall be mailed or delivered at a later date indicating the insurers intention as specified in subparagraph (A) or (B) of this paragraph and that coverage shall continue on the same terms, conditions and rates as the expiring policy, until the later of the expiration date or sixty days after the second notice is mailed or delivered; such alternative renewal notice also shall advise the insured of the availability of loss information pursuant to subsection (g) of this section and, upon written request, the insurer shall furnish such loss information within twenty days consistent with the provisions of this subsection. (emphasis added).
In conclusion, all notices sent to insureds under Section 3426 must advise the insured of the availability of loss information.
For further information you may contact Associate Attorney D. Monica Marsh at the New York City Office.