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 65-4.2 - Initiation of optional arbitration procedures under section 5106(b) of the insurance law for arbitrations filed with an organization designated by the superintendent on and after december 1, 1999
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 65-4.2
Current through Register Vol. 46, No. 39, September 25, 2024
(a) Administration by an organization designated by the superintendent.
(1) Section
5106 of the
Insurance Law requires that the Superintendent of Insurance promulgate
simplified procedures for the resolution by arbitration of no-fault
disputes.
(2) Chapter 892 of the
Laws of 1977 provides for the establishment of revised optional arbitration
systems for the resolution of no-fault disputes. These changed procedures for
the administration of the arbitration system provide for initial review of all
arbitration requests by an organization designated by the superintendent. The
designated organization, acting on behalf of the superintendent, is authorized
to receive, attempt to conciliate and forward to arbitration all requests for
arbitration that it cannot conciliate.
(3) All optional arbitrations pursuant to
section
5106
(b) of the Insurance Law will be administered
by an organization designated by the superintendent.
(4) No-fault optional arbitration advisory
committee. The superintendent shall select an advisory committee composed of 12
members to review the operations and the actual costs of the optional
arbitration procedures set forth in this Subpart. Not more than four of the
members of the advisory committee shall be representatives of
self-insurers.
(5) Oversight. The
superintendent shall oversee the operation procedures of the designated
organization with respect to the administration of the optional arbitration
process. Such oversight shall include, but not be limited to, access to all
systems, databases, and records related to the optional arbitration process. In
addition, the designated organization shall make reports to the superintendent
in whatever form the superintendent shall prescribe.
(b) Procedures.
(1) Initiation of arbitration.
(i) An applicant for benefits may initiate
arbitration proceedings by mailing a copy of the denial of claim form
prescribed by section
65-3.4(c)(11) of
this Part, upon which the applicant has entered the reason(s) for contesting
the denial, together with a detailed listing and calculation of all incurred
expenses in dispute, indicating the dates upon which the claims for incurred
expenses were submitted to the insurer, to the address designated on the denial
of claim form.
(ii) If there is a
dispute with respect to any matter which is arbitrable pursuant to section
5106 of the
Insurance Law and a denial of claim form has not been issued, the applicant may
initiate arbitration by completing a no-fault arbitration request form and
forwarding the original and one copy to the designated organization at the
address designated on the form, and one copy to the insurer against which
arbitration is being requested. The no-fault arbitration request form shall be
prescribed by the designated organization and approved by the
superintendent.
(iii) The denial of
claim form or the arbitration request form shall be accompanied by a check or
money order for $40 payable to the designated organization. This filing fee
shall be returned to the applicant directly by the insurer, if the applicant
prevails in whole or in part.
(iv)
As a condition precedent to arbitration where there is no denial of claim by an
insurer, evidence of attempts to settle the dispute must be detailed on the
arbitration request form.
(v) In
the absence of a denial of claim form, a dispute shall be considered arbitrable
if the claim is overdue as described in section
65-3.8(a)(1) of
this Part and a demonstrable attempt was made by the applicant to obtain
payment or an explanation from the insurer of the continued nonpayment of the
claim.
(vi) All items on the
no-fault arbitration request form must be completed in full. An explanation
must be provided for any omitted spaces on the form, which may be obtained,
upon request, from the designated organization by writing to the address
designated on the denial of claim form (NYS form NF-10), which is included in
Appendix 13 of this Title.
(2) Initial review by the conciliation
center.
(i) The designated organization shall
establish a conciliation center, which shall review all requests for
arbitration and assign file numbers thereto, which shall be used by the
designated organization and the parties to identify the case.
(ii) Each insurer shall designate, for each
claims office used by the insurer to handle New York no-fault claims, a
responsible staff member whom the conciliation center can contact to determine
whether the no-fault dispute for which arbitration has been requested can be
resolved without the need for arbitration. Since conciliation staff will
attempt to resolve the dispute by telephone, facsimile, e-mail, or other
appropriate means, the insurer's designated representative shall have the
authority to bind the insurer to any agreement reached. The insurer shall
notify the conciliation center of the designated representative in writing and
immediately notify the conciliation center of any change in such
designation.
(iii) If it appears,
after review, that the dispute may be resolved without arbitration, the
conciliation center will communicate with the parties and attempt through
conciliation to resolve the dispute.
(a) If
all the issues in dispute are resolved through the designated organization's
conciliation, by the insurer agreeing to pay and the applicant agreeing to
accept all or a portion of the amount in dispute, the insurer shall, in
addition, return the filing fee to the applicant. If the claim was overdue, the
insurer shall also pay the applicable interest.
(b) If the arbitration was initiated by use
of a no-fault arbitration request form and it is subsequently established that
the claim and any applicable interest and attorney fees were paid at least 20
calendar days prior to the submission of the completed arbitration request
form, the filing fee shall not be returned to the applicant. In such instance,
an additional $100 service and processing fee shall be payable by the applicant
to the designated organization.
(iv) If it appears to the conciliation center
that the dispute cannot be resolved through conciliation within 60 calendar
days, the conciliation center will refer the request for arbitration as
prescribed in this section and the parties shall be so advised. The
conciliation center may, however, withhold such referral pending receipt from
the applicant of pertinent and available information that has been
requested.
(3)
Submission of documents.
(i) The applicant
shall submit all documents supporting the applicant's position along with their
request for arbitration. All such documents shall also be simultaneously
submitted to the respondent. Following this original submission of documents,
no additional documents may be submitted by the applicant other than bills or
claims for ongoing benefits.
(ii)
The designated organization shall, no later than five business days after
receipt of the arbitration request, advise the respondent of such receipt. The
respondent shall, within 30 calendar days after the mailing of such advice,
provide all documents supporting its position on the disputed matter. Such
documents shall be submitted to the applicant at the same time. The respondent
may, in writing, request that the designated organization provide an additional
30 calendar days to respond based upon reasonable circumstances that prevent it
from complying.
(iii) The written
record shall be closed upon receipt of the respondent's submission or the
expiration of the period for receipt of the respondent's submission. Documents
submitted by either party after the record is closed shall be marked
"Late."
(iv) Any additional written
submissions may be made only at the request or with the approval of the
arbitrator.
(v) The provisions of
this paragraph shall take effect with all arbitrations filed on and after March
1, 2002.
(4) Prior to
transmittal to arbitration, the insurer may make a non-binding written offer to
resolve the dispute. Such offer, if not accepted by the applicant, shall be
transmitted to the arbitration forum, but shall not be disclosed to the
arbitrator. The parties to the dispute shall also not disclose the offer to the
arbitrator.
(5) All disputes
remaining after expiration of the conciliation period shall be forwarded for
arbitration.
(c) Financing.
(1) The cost of administering the
conciliation function, reduced by any fees collected, shall be paid annually by
insurers (including self-insurers and MVAIC) 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 of Insurance.
This distribution shall, to the extent practicable, be a function of the degree
to which an insurer is named as a respondent in conciliation proceedings of the
designated organization.
(2)
Semiannually, commencing December 1, 1999 and continuing every six months
thereafter, the designated organization shall prepare an estimate of the
expenses expected to be incurred for the operation of the conciliation function
during the subsequent six-month period. The projected cost of the conciliation
function shall be assessed on a proportionate basis to those insurers named as
respondents in the preceding calendar year and shall be subject to the approval
of the superintendent. The designated organization shall send to each
applicable insurer a bill for the amount due and any payment due shall be made
to the designated organization within 30 days after billing date.
(3) On an annual basis, as of December 31st
of each year, the designated organization shall prepare a detailed analysis of
the actual costs incurred for the operation of the conciliation function. This
analysis shall be forwarded to the no-fault optional arbitration advisory
committee and the superintendent on or before April 30th of each year. The
no-fault optional arbitration advisory committee shall notify the designated
organization and the superintendent whether it accepts or rejects the
designated organization's cost analysis in whole or in part. In the event that
the designated organization and the no-fault optional arbitration advisory
committee cannot resolve any differences that may exist, such differences 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 cost analysis that has either been approved by the no-fault optional
arbitration advisory committee or resolved by the superintendent in the event
of a dispute, the designated organization shall send to each applicable insurer
an accounting of the actual assessment. Any adjustment shall be made to the
bill for the subsequent estimated assessment, as illustrated by the following
example:
Example:
(1)
Total conciliation cases closed during year 30,000
Example:(2) Cases in which insurer A was named as a respondent in the conciliation proceeding 1,250
Example:(3) Insurer A's assessment percentage = (2)/(1) 4.167%
Example:(4) Actual expenses of the conciliation function reduced by amounts received through fees collected $2,500,000
Example:(5) Insurer A's actual expense = (3)*(4) $104,175
Example:(6) Insurer A's estimated assessment $102,000
Example:(7) Insurer A's debit or (credit) = (5)-(6) $2,175
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