OGC Opinion No. 05-04-01

The Office of General Counsel issued the following opinion on April 4, 2005, representing the position of the New York State Insurance Department.

Re: Filing of Service Contract Reimbursement Insurance Forms

Question Presented:

Does an insurer have to file service contract reimbursement insurance policy forms with the Department?

Conclusion:

An insurer is not required to file service contract reimbursement insurance policy forms with the Department.

Facts:

No facts are provided. The inquirer posed a general question regarding the filing of service contract reimbursement insurance policy forms with the Department. The inquirer asked whether the filing requirements differed based upon the type of product that was the subject of the service contract:

Analysis:

N.Y. Ins. Law § 2302(a)(7) (McKinney 2000) exempts service contract reimbursement insurance from the requirements of Insurance Law Article 23, including the rate and form filing requirements therein.¹  There is no other provision of the Insurance Law, including Article 79, which governs service contracts, that requires an insurer to file rates or forms with the Superintendent. The kind of property that is the subject of the service contract does not matter.

If an insurer was not licensed to write service contract reimbursement insurance (N.Y. Ins. Law § 1113(a)(29) (McKinney 2000 & Supp. 2005)) but was licensed to write motor vehicle and aircraft insurance (N.Y. Ins. Law § 1113(a)(19) (McKinney 2000 & Supp. 2005)), then the insurer may write reimbursement insurance covering warranties or service contracts with respect to motor vehicles or aircraft as substantially similar to motor vehicle and aircraft insurance (N.Y. Ins. Law § 1113(a)(30) (McKinney 2000 & Supp. 2005)). In such a case, the forms would have to be filed with the Superintendent in accordance with Article 23. Please note, however, that such a policy would not satisfy the financial responsibility requirements of Article 79 for service contract providers because such a policy would not be a service contract reimbursement insurance policy issued by an insurer authorized to issue service contract reimbursement insurance in this state.

The inquirer also asked us to review a proposed policy form. As noted, such forms are not required to be filed with the Department. Accordingly, we reviewed it solely to ensure that it was in compliance with the requirements of Article 79 and N.Y. Comp. Codes R. & Regs. tit. 11 Part 390 (2001) (Regulation 155). The policy is in accord with N.Y. Ins. Law § 3426 (McKinney 2000 & Supp. 2005) and all of the provisions required by Article 79 and Regulation 155 appear to be present except for Sect. 390.7(b)(2) of Reg. 155, which requires a provision stating that the termination of the policy shall not affect or reduce the insurer's obligations to, or responsibility for, direct coverage to contract holders whose service contracts were made during the term of the policy and were covered under the policy.

For further information please contact Principal Attorney Paul A. Zuckerman at the New York City Office.

¹/ However, N.Y. Ins. Law § 2324 (McKinney 2000 & Supp. 2005) does apply to service contract reimbursement insurance policies because that section has its own applicability provision that is distinct from the applicability provision that otherwise applies to Article 23.