The New York Insurance Department’s Office of General Counsel issued a small crop of advisory legal opinions in October:
- A Directors & Officers Liability policy many not include a provision that places the duty to defend upon the insured, rather than the insurer.
- New York Insurance Law might permit a self-funded health benefit plan to retain an insurer to administer claims, and have the insurer advance the funds for claim payments, subject to subsequent reimbursement.
- An individual receiving a stipend under the federal Foster Grandparent Program who is injured in a motor vehicle accident may receive compensation for the stipend through a lost earnings claim made under the no-fault coverage of the vehicle in which the inquirer was traveling.
- Neither the Insurance Law nor regulations require an insurer or its agent to purge information it receives from persons who request an insurance quote. Insurance Department regulations require the insurer to maintain certain information for minimum specified periods. An insurer and its agent may not disclose a consumer’s personal information to third parties unless they fulfill specific procedural requirements.
- New York Insurance Law and regulations do not define the term “replacement cost.” If a payment made on an estimated claim represents payment of only the undisputed elements of the claim, the insured may accept the check, and then seek payment for the disputed amount within the limitations of the insurance policy. If the payment represents a full settlement of the claim, and the insured accepts the payment, then the insured may not seek additional payment for damages sustained.
- When a claimant elects to retain title to an automobile that is a total loss - under which the vehicle’s salvage value will be deducted from the settlement payment - the amount of sales tax is added to the value of the vehicle prior to the accident. An insurance company is not required under the New York Insurance Law or regulations to include title transfer costs associated with the purchase of a replacement vehicle in determining the actual cash value of a motor vehicle that has suffered a total loss. However, the law and regulations do not prohibit the company from paying that extra sum as a component of loss, so long as it does so in a uniform and non-discriminatory manner.
The Department posted these and other opinions in October. Visit the Department’s Web site to find any opinion issued since 2000.


