Current through Register Vol. 46, No. 12, March 20, 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.