Current through Register Vol. 46, No. 39, September 25, 2024
(a)
Grounds for review. An award by an arbitrator rendered pursuant to section
5106
(b) of the Insurance Law and section 65-4.4
or 65-4.5 of this Subpart may be
vacated or modified solely by appeal to a master arbitrator, and only upon one
or more of the following grounds:
(1) any
ground for vacating or modifying an award enumerated in article 75 of the Civil
Practice Law and Rules (an article 75 proceeding), except the ground enumerated
in CPLR subparagraph 7511(b)(1)(iv) (failure to follow article 75
procedure);
(2) that the award
required the insurer to pay amounts in excess of the policy limitations for any
element of first-party benefits; provided that, as a condition precedent to
review by a master arbitrator, the insurer shall pay all other amounts set
forth in the award which will not be the subject of an appeal, as provided for
in section 65-4.4 or
65-4.5 of this Subpart;
(3) that the award required the insurer to
pay amounts in excess of the policy limitations for any element of additional
first-party benefits (when the parties had agreed to arbitrate the dispute
under the additional personal injury protection endorsement for an accident
which occurred prior to January 1, 1982); provided that, as a condition
precedent to review by a master arbitrator, the insurer shall pay all other
amounts set forth in the award which will not be the subject of the appeal, as
provided for in section 65-4.4 or
65-4.5 of this Subpart;
(4) that an award rendered in an arbitration
under section 65-4.4 or
65-4.5 of this Subpart, was
incorrect as a matter of law (procedural or factual errors committed in the
arbitration below are not encompassed within this ground);
(5) that the attorney's fee awarded by an
arbitrator below was not rendered in accordance with the limitations prescribed
in section
65-4.6 of this Subpart; provided
that, as a condition precedent to review by a master arbitrator, the insurer
shall pay all other amounts set forth in the award which will not be the
subject of the appeal, as provided for in section 65-4.4 or
65-4.5 of this Subpart.
(b) Qualifications of master
arbitrators.
(1) A master arbitrator shall be
an attorney, licensed to practice law in New York State, who has at least 15
years' experience which the superintendent has determined qualifies such
attorney to review and resolve the issues involved in no-fault insurance
disputes. Documentation of such experience shall be submitted to, and reviewed
by, the superintendent prior to appointment of a master arbitrator.
(2) All master arbitrators shall be appointed
by, and serve at the pleasure of, the superintendent. A master arbitrator
candidate shall disclose to the superintendent any circumstance which is likely
to create an appearance of bias or which might disqualify such person as a
master arbitrator, and the superintendent shall determine whether the candidate
should be disqualified. The superintendent shall forward the names of all
master arbitrators to the designated organization, and promptly inform it of
all additions to, and deletions from, the panel.
(3) No person shall, during the period of
appointment as a master arbitrator, also serve as an arbitrator under the
optional arbitration systems prescribed in section
5106
(b) of the Insurance Law and section 65-4.4
or 65-4.5 of this Subpart, nor serve
as an attorney to a party to any such arbitration.
(4) All master arbitrators shall take an oath
of office.
(5) No person shall
serve as a master arbitrator in any master arbitration in which such person has
any financial or personal interest or bias. If a party challenges a master
arbitrator, the specific grounds for the challenge shall be submitted in
writing to the designated organization which, in consultation with the
superintendent, shall determine within 15 calendar days after receipt of the
challenge whether the master arbitrator should be disqualified. Such
determination shall be final and binding. If a master arbitrator should resign,
be disqualified or be otherwise unable to perform necessary duties, the
designated organization shall assign another master arbitrator to the case
within seven calendar days after receipt of notice thereof.
(c) Scope of master arbitration
review.
(1) Review by a master arbitrator
shall be based solely on submitted documents, including any record made of the
arbitration below, unless a master arbitrator requires oral argument on
specified issues.
(2) Legal briefs
shall not be submitted, unless requested by the master arbitrator.
(3) The master arbitrator shall initially
consider and determine whether the facts alleged in the submitted documents set
forth a ground for review pursuant to subdivision (a) of this
section.
(4) If the master
arbitrator determines that subdivision (a) of this section has not been
complied with, the master arbitrator shall, in lieu of rendering an award, deny
the request for review. The procedural requirements contained in this section
applicable to a master award, shall also be applicable to a denial of request
for review, but such denial shall not form the basis of an action de novo
within the meaning of section
5106
(b) of the Insurance Law.
(5) If the master arbitrator determines that
subdivision (a) of this section has been complied with, the master arbitrator
shall proceed to review the matter and render an award accordingly.
(6) The master arbitrator shall only consider
those matters which were the subject of the arbitration below or which were
included in the arbitration award appealed from.
(d) Procedure for review.
(1) If grounds exist, pursuant to subdivision
(a) of this section, any party to an arbitration may request that the
arbitration award be vacated or modified by a master arbitrator.
(2) The request for review by a master
arbitrator shall be in writing and shall be mailed or delivered to the
designated organization's master arbitration administrative office within 21
calendar days of the mailing of the award. The request shall include a copy of
the award in issue and shall state the nature of the dispute and the grounds
for review. A request by an applicant for benefits shall be accompanied by a
filing fee of $75, payable by check or money order to the designated
organization. A request by an insurer shall be accompanied by a filing fee of
$325, payable by check or money order to the designated organization. The
failure of a party to enclose the appropriate filing fee with a timely request
for review shall result in a denial of the request for review by a master
arbitrator if such payment is not made within 28 calendar days of the mailing
of the award.
(3) The applicant for
master arbitration review shall send, by certified mail, a copy of its filing
papers to the opposing party at the same time that it submits the request for
review to the designated organization.
(4) Within seven calendar days of receipt of
the request, the designated organization shall assign a master arbitrator,
selected in sequence from a panel of master arbitrators appointed by the
superintendent, and shall forward to the master arbitrator a copy of the
request for review.
(5) The master
arbitrator shall render an award no later than 90 calendar days after
assignment.
(i) Submission of materials.
Within 15 calendar days after assignment, the master arbitrator shall set a
date (which date shall not be more than 45 calendar days after assignment) by
which all evidence, documents and briefs, if any, must be submitted to the
master arbitrator by the parties. The master arbitrator shall give the parties
30 calendar days' written notice of this date.
(ii) Oral argument. If after receipt of these
materials, the master arbitrator determines that oral argument on specific
issues is necessary, the master arbitrator shall give the parties 10 calendar
days' notice of the place, time and date for oral argument and the issues to be
argued. Oral argument shall be conducted at the office of the master
arbitrator, the office of the designated organization or at a location
agreeable to the parties and the master arbitrator.
(iii) The master arbitrator may postpone or
adjourn the date for submission of materials or of oral argument to a date
within the 90-day period for good cause shown. A postponement or adjournment
shall also be granted when all the parties agree thereto. The postponement or
adjournment shall not extend the 90-day period for rendering of an
award.
(6) The failure
of a master arbitrator to adhere to the procedural time frames, contained in
paragraph (5) of this subdivision, shall not affect the validity of an
award.
(7) Any party may be
represented in a master arbitration by an attorney.
(8) A master arbitration shall proceed if any
party, after due notice of the date to submit materials or date of oral
arguments, fails to appear, to submit materials or to obtain a postponement or
adjournment. However, an award shall not be made in favor of an appearing party
solely on the default of another party. A master arbitrator shall direct the
appearing party to submit such materials as may be required in order to render
a decision in the matter.
(e) Award by master arbitrator.
(1) Form and scope of award.
(i) The award shall be in writing in a format
approved by the superintendent. It shall state the issues in dispute and
contain the master arbitrator's findings and conclusions based on the materials
submitted. It shall be signed by the master arbitrator and shall be transmitted
to the parties by the designated organization, with a copy to the Insurance
Department. The award shall be determinative of all issues submitted to the
master arbitrator by the parties.
(ii) If the applicant for benefits prevails
in whole or part on the claim, the award shall also direct the insurer to:
(a) if the applicant requested review by a
master arbitrator, pay to the applicant reimbursement of the amount of the
master arbitration filing fee paid;
(b) pay to the applicant the amount
previously paid by the applicant to reimburse for the filing fee in the
arbitration below, unless the filing fee had already been returned to the
applicant pursuant to an earlier award;
(c) if due under section
5106 of the
Insurance Law, pay a reasonable attorney's fee in accordance with the
limitations set forth in subdivision (j) of this section; and
(d) if due, compute and pay the amount of
interest for each element of first-party benefits in dispute, commencing 30
days after proof of claim therefor was received by the insurer and ending with
the date of payment of the award, subject to the provisions of section
65-3.9(c) and (d)
of this Part (stay of interest).
(2) Award upon settlement. If the parties
settle their dispute during the course of the master arbitration, the master
arbitrator shall set forth the terms of the agreed settlement in an award which
shall provide that the parties agree that the settlement is final and binding
and shall not be subject to review by a court or the subject of a de novo court
action. The award shall be signed by the master and shall be transmitted to the
parties by the designated organization, with a copy to the Insurance
Department.
(3) Delivery of award
to parties. The parties shall accept as delivery of the award the placing of
the award or a true copy thereof in the mail, addressed to the parties or their
designated representatives at their last known addresses, or by any other form
of service permitted by law. The designated organization shall note on such
award or transmittal letter thereof the date of mailing and keep a record of
same.
(4) Payment of award. Subject
to subdivision (h) of this section, the insurer shall, within 21 calendar days
of the date of mailing of the award, pay the amounts set forth in the award.
The award need not be confirmed into judgment.
(f) Interpretation and application of
procedures. The master arbitrator shall interpret and apply the procedures of
this section insofar as they relate to the master arbitrator's powers and
duties. All other procedures shall be administered by the designated
organization, subject to consultation with and approval by the
superintendent.
(g) Alternative
legal remedies. The designated organization or the master arbitrator shall
transmit to the superintendent copies of any legal papers served upon the
designated organization, or the master arbitrator, relating to any stay or
appeal of a master arbitration.
(h)
Appeal from master arbitrators award.
(1) A
decision of a master arbitrator is final and binding, except for:
(i) court review pursuant to an article 75
proceeding; or
(ii) if the award of
the master arbitrator is $5,000 or greater, exclusive of interest and
attorney's fees, either party may, in lieu of an article 75 proceeding,
institute a court action to adjudicate the dispute de novo.
(2) A party who intends to
commence an article 75 proceeding or an action to adjudicate a dispute de novo
shall follow the applicable procedures as set forth in CPLR article 75. If the
party initiating such action is an insurer, payment of all amounts set forth in
the master arbitration award which will not be the subject of judicial action
or review shall be made prior to the commencement of such action.
(i) Master arbitrator's fee. The
master arbitrator shall be compensated in the amount of $250 for each case.
Such fee will be paid by the designated organization. The master arbitrator's
fee shall be charged to the cost of administering the master arbitration
system.
(j) Limitations on
attorney's fees pursuant to section
5106 of the
Insurance Law. The following limitations shall apply to the payment by insurers
of applicant's attorney's fees for services rendered in a master arbitration to
resolve a no-fault dispute:
(1) The minimum
attorney's fee payable pursuant to this Subpart shall be $60.
(2)
(i) For
preparatory services necessarily rendered, the attorney shall be entitled to
receive a fee of up to $65 per hour, subject to a maximum fee of
$650.
(ii) An attorney shall be
entitled to receive a fee of up to $80 per hour for oral argument before the
master arbitrator, made pursuant to paragraph (c)(1) of this section.
(iii) If an applicant is successful in
obtaining a reversal of the arbitration(s) below, wherein no attorney's fee was
awarded, the attorney in the arbitration below shall also be entitled to
receive a fee, computed in accordance with the provisions of section
65-4.6 of this Subpart.
(3) Notwithstanding the above
limitations, if the master arbitrator determines that the issues in dispute
were of such a novel or unique nature as to require extraordinary skills or
services, the master arbitrator may award an attorney's fee in excess of the
limitations set forth above. An excess fee award shall detail the specific
novel or unique nature of the dispute which justifies the award.
(4) The attorney's fee for services rendered
in connection with a court adjudication of a dispute de novo, as provided in
section
5106
(c) of the Insurance Law, or in a court
appeal from a master arbitration award and any further appeals, shall be fixed
by the court adjudicating the matter.
(5) No attorney shall demand, request or
receive from the insurer any payment or fee in excess of the fees permitted by
this subdivision for services rendered with respect to a no-fault master
arbitration dispute.
(k)
Financing.
(1) The cost of administering the
master arbitration system over and above the amount of fees paid by applicants
and insurers shall be paid annually by insurers to the designated organization
upon receipt of a statement therefrom. This cost shall be distributed among
insurers in an equitable manner approved by the superintendent. This
distribution shall, to the extent practicable, be a function of the degree to
which an insurer is a party to arbitration proceedings.
(2) Upon filing of a demand for master
arbitration by an applicant, the designated organization shall bill the
respondent insurer the sum of $250, which shall be payable by the insurer
within 30 days after billing.
(3)
On an annual basis, as of December 31st of each year, the designated
organization shall prepare a detailed accounting of the actual costs incurred
for the implementation of the master arbitration system and the amount of fees
received from applicants and insurers. The accounting will be forwarded to the
No-Fault Optional Arbitration Advisory Committee (the committee) and the
superintendent on or before April 30th of each year. The committee shall notify
the designated organization and the superintendent whether it accepts the
designated organization's accounting in whole or in part. In the event the
designated organization and the committee cannot resolve any differences that
may exist, the dispute will be referred to the superintendent for resolution.
The superintendent's decision shall be binding on the designated organization
and insurers.
(4) Once the
designated organization submits a final accounting that has either been
approved by the committee or resolved, in the event of a dispute, by the
superintendent, the designated organization shall send to each insurer a bill
for the amount due or a refund for the amount credited, based upon the number
of master arbitrations to which the insurer was a party.