New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter B - Property and Casualty Insurance
Part 65 - Regulations Implementing The Comprehensive Motor Vehicle Insurance Reparations Act
Subpart 65-4 - Arbitration
Section 65-4.11 - Mandatory arbitration for insurers, self-insurers and compensation providers under section 5105 of the insurance law
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 65-4.11
Current through Register Vol. 46, No. 39, September 25, 2024
(a) Applicability.
(1) This section shall apply
to mandatory arbitration of controversies between insurers, pursuant to the
provisions of sections
5105 and
5106
(d) of the Insurance Law, and shall apply to
insurers, self-insurers and compensation providers. The term insurer as used in
this section (except as specified in paragraphs (c)(2) and (f)(1) of this
section) shall include both "insurers" and "self-insurers" as those terms are
defined in this Part and article 51 of the Insurance Law; the Motor Vehicle
Accident Indemnification Corporation (MVAIC); any company providing insurance
pursuant to section
5103
(g) of the Insurance Law; and compensation
providers as defined in section
5102
(l) of the Insurance Law.
(2) Except as provided in section
65-3.12(b)(3) and
(4) of this Part, all insurers shall submit
controversies arising out of accidents, insured events or occurrences within
the jurisdiction of section
5105,
5106
(d), or
5221
(b) of the Insurance Law to mandatory
arbitration, as prescribed in this section. Controversies arising from
accidents, insured events or occurrences outside the jurisdiction of section
5105,
5106
(d), or
5221
(b) of the Insurance Law may be submitted
with the consent of the controverting insurers.
(3) Any determination as to whether an
insurer is legally entitled to recovery from another insurer shall be made by
an arbitration panel (see paragraph [c] [2] of this section) appointed pursuant
to this section. The decision of a majority of an arbitration panel shall be
final and binding upon the insurers to the controversy. There shall be no right
of rehearing or appeal. However, this provision does not preclude correction of
clerical or typographical errors.
(4) Where arbitrating insurers are signators
to any insurer arbitration program under which a claim or companion claims
would be otherwise subject to the compulsory jurisdiction of such agreements,
the jurisdiction of this section shall be primary. Insurers shall waive their
rights to proceed separately under such other arbitration programs and include
all claims arising out of the same accident or insured event for disposition by
an arbitration panel appointed pursuant to this section.
(5) This section is applicable only to
controversies involving insurers.
(6) Other than claims asserted by MVAIC
against an insurer, this section shall not apply to any claim for recovery
rights to which an insurer in good faith asserts a defense of lack of coverage
of an alleged covered person on any grounds, unless specific written consent of
mandatory arbitration is obtained from the insurer asserting such defense.
Where an insurer asserts a defense of lack of coverage of an alleged covered
person on any grounds relating to claims asserted by MVAIC for recovery rights,
same shall be subject to mandatory arbitration. However, any controversy
between insurers involving the responsibility or the obligation to pay
first-party benefits (i.e., priority or payment or sources of payment as
provided in section
65-3.12 of this Part) is not
considered a coverage question and must be submitted to mandatory arbitration
under this section.
(7) This
section shall not be construed to create any causes of action or liabilities
not existing in law or equity, nor shall this section be construed to abolish
any causes of action or liabilities existing in law or
equity.
(b) Administration of arbitration.
(1) The
arbitration prescribed in this section shall be administered by an
inter-company arbitration administrator "administrator" designated by the
superintendent. The administrator may:
(i)
make appropriate administrative rules for arbitrations;
(ii) select places where arbitration
facilities are to be available, and adopt a policy for the selection and
appointment of arbitration panels; and
(iii) make appropriate recommendations for
equitable apportionment among arbitrating insurers of the operating expenses of
this program.
(2) Local
arbitration panels.
(i) Members of local
arbitration panels shall be appointed by the administrator from full-time
salaried representative of insurers, on the basis of their experience and
qualifications, and shall serve without compensation.
(ii) The administrator shall be responsible
for the selection of arbitration panels to hear the particular cases.
(c) Selection of arbitrators.
(1) Insurers shall furnish the
administrator with a list of names, titles and local addresses of all employees
who are qualified to act as arbitrators.
(2) The administrator shall designate one
disinterested member of such panel to serve as an arbitrator in each case.
However, an insurer may request a three-member arbitration panel in a specific
case. If one or more of the controverting parties is a self-insurer which has
requested a three-member panel, then the self-insurer may also request that at
least one member of the panel be a disinterested representative of a
self-insurer, where such representative is available to serve on the
panel.
(3) No one shall serve as an
arbitrator on a panel hearing a case in which the insurer represented by the
arbitrator is directly or indirectly interested.
(d) All arbitrations under this Subpart shall be conducted in accordance with procedures established by the administrator and approved by the superintendent.
(e) Filing assessments.
(1) The administrator, by
resolution, will recommend the filing assessment for the use of local
arbitration facilities. The expenses of the program shall be periodically
reviewed by the loss transfer advisory committee (see subdivision [f] of this
section), which shall consider the recommendations of the administrator and
prescribe from time to time arbitration assessments.
(2) The obligation for the prescribed filing
assessment is incurred upon filing by the applicant, by a respondent filing a
counterclaim or by a party filing a deferment. There are no exceptions to an
insurer's obligation to pay the filing assessment.
(3) The secretary of the administrator is the
custodian of the assessment charges collected and shall make expenditures
therefrom to defray such arbitration expenses as may be authorized by the
administrator.
(4) The secretary of
the administrator will submit reports on assessments collected and disbursed
during such period as may be considered desirable by the
administrator.
(f) Loss transfer advisory committee.
(1) The
superintendent shall select a loss transfer advisory committee composed of 14
members, of which eight shall represent motor vehicle insurers, three shall
represent motor vehicle self-insurers, two shall represent compensation
providers and one shall represent the Motor Vehicle Accident Indemnification
Corporation.
(2) The loss transfer
advisory committee shall:
(i) regularly review
the operations, procedures, rules, expenditures, assessments and all other
relevant matters involving settlements between insurers in accordance with the
requirements of section
5105 or
5221
(b) of the Insurance Law;
(ii) review the operations of the
administrator insofar as they relate to the arbitration prescribed in this
section; and
(iii) report its
findings, conclusions and recommendations directly to the superintendent
annually and at such other intervals as it deems appropriate.
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