OGC Op. No. 04-03-32

The Office of General Counsel issued the following opinion on March 31, 2004, representing the position of the New York State Insurance Department.

Re: No-Fault Coverage - Out-of-State Vehicle

Question Presented

When a pedestrian is struck by a motor vehicle operating in New York, and such vehicle is registered out-of-state and insured by an insurer not authorized to do business in New York, but such insurer is a wholly-owned subsidiary of a Canadian corporation with two other carriers that are wholly-owned subsidiaries and are authorized to do business in New York, must the out-of-state vehicle injuring the pedestrian provide the pedestrian with No-Fault coverage?


Yes, in accordance with Insurance Law Section 5107(a).


The inquirer describes a case in which a New York resident pedestrian was struck in New York by an automobile licensed and registered in Florida while operating in New York. The inquirer represents that the insurer, A, is a wholly-owned subsidiary of a Canadian corporation, B, but that A is not licensed to do an insurance business in New York. However, the inquirer also represents that B has two other wholly-owned subsidiaries, C and D, which are insurers are licensed to do business in New York.

The inquirer further stated that A has refused to provide No-Fault benefits to the injured pedestrian by apparently contending that under the policy of the Florida vehicle, No-Fault benefits are only provided to the named insured and resident relatives while occupants of the insured vehicle outside of Florida.


Before analyzing the specifics of the inquirer’s question, it must be made clear that under Article 6 of the New York Vehicle & Traffic Law, the "Motor Vehicle Financial Security Act", N.Y. Veh. & Traf. Law § 319 (McKinney 2004), the owner of a motor vehicle operating on a public highway of New York, whether or not the owner’s policy is issued in New York, must have financial security in place in accordance with the requirements of New York law. One acceptable form of proof of such financial security is an owner’s policy of liability insurance (which includes New York mandated No-Fault benefits). If such financial security is not in place when a motor vehicle is operated in New York, both the vehicle owner and driver are subject to penalties under Sections 318 & 319 of the Vehicle and Traffic Law. Therefore, out-of-state vehicles operating in New York under policies which do not provide for the payment of No-Fault benefits to eligible injured persons are operating in violation of New York law.

N.Y. Ins. Law § 5107(a) (McKinney 2004) of the No-Fault law states that with respect to coverage for non-resident motorists, "Every insurer authorized to transact or transacting business in this state, or controlling or controlled by or under common control by or with such an insurer, which sells a policy providing motor vehicle liability insurance coverage or any similar coverage in any state or Canadian province, shall include in each such policy coverage to satisfy the financial security requirements of article six or eight of the vehicle and traffic law and to provide for the payment of first party benefits pursuant to subsection (a) of section five thousand one hundred three of this article when a motor vehicle covered by such policy is used or operated in this state (Emphasis added).

In the situation the inquirer presents, A, though not licensed to do business in New York, is under the common control of B, along with two other insurers who are licensed to do business in New York and must meet all minimum financial requirements required under New York law. Therefore, pursuant to Section 5107(a), A is also required to meet all New York financial requirements when a vehicle it insures is operating in New York. It must be concluded that, under the facts the inquirer presents, A is obligated to provide No-Fault benefits to the injured pedestrian.

For further information one may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City Office.