Current through Register Vol. 46, No. 39, September 25, 2024
(a) Notice. If
a dispute has been transmitted for arbitration by the Insurance Department or
the conciliation center, the parties will be notified by the designated
organization, in writing, that the dispute will be resolved by arbitration. At
the arbitrator's discretion, if the dispute involves an amount less than
$2,000, the parties shall be notified that the dispute shall be resolved on the
basis of written submissions of the parties. All such submissions shall be
received by the designated organization within 30 calendar days of the date of
mailing of the notice. No oral arguments will be permitted, unless the
arbitrator determines that additional evidence or testimony is necessary. In
order to facilitate receipt of evidence by the designated organization, the
parties may forward their submissions prior to receipt of the above
notification.
(b) Special expedited
arbitration.
(1) Special expedited
arbitration shall be available for disputes involving:
(i) the failure to submit notice of claim
within 30 calendar days after the accident and where it has been determined by
the insurer that reasonable justification for late notice has not been
established; and
(ii) the proper
application of sections
65-3.12(b) and
(c) and
65-3.13(a)(2)-(4) and
(6) of this Part.
(2)
(i) An
applicant may request special expedited arbitration for resolution of the
dispute involving late notice within 30 calendar days after mailing of the
denial of claim by the insurer stating that reasonable justification for late
notice has not been established.
(ii)
(a) In
regard to disputes related to section
65-3.12(b) and
(c) or
65-3.13(a)(2)-(4) and
(6) of this Part, an applicant may request
special expedited arbitration to designate an insurer that is responsible for
processing first-party benefits and additional first party benefits, after each
insurer has issued a denial of claim form (NF-10) stating that the insurer is
not the insurer eligible to process the first-party benefits claimed.
(b) Special expedited arbitration required by
clause (a) of this subparagraph shall only designate an insurer to commence
processing the claim based upon the first insurer notified that is otherwise
liable for the payment of first party benefits. The insurer designated by the
arbitration shall retain all rights of investigation afforded under statute and
regulation, and the ultimate liability for payment of benefits shall be
resolved in accordance with section
65-4.11 of this
Subpart.
(3) At
the time of a request for special expedited arbitration, the applicant shall
make a complete written submission supporting his or her position. Any further
written submissions shall be accepted into evidence at the discretion of the
arbitrator.
(4) Applications for
special expedited arbitration shall be submitted to the conciliation center of
the designated organization and shall comply with the requirements for
initiation of arbitration contained in section 65- 4.2(b)(1)(iii) of this
Subpart.
(5) The applicant's
submission shall be forwarded by the conciliation center to the insurer within
three business days of receipt. The insurer may provide the center with
reasonable special mailing or transmittal instructions to facilitate the
processing of these arbitration requests.
(6) The insurer shall respond in writing to
the applicant's submission within 10 business days after the mailing by the
center. No further submissions shall be accepted unless requested by the
arbitrator.
(7) The dispute shall
be resolved solely upon the basis of written submissions unless the arbitrator
concludes that the issues in dispute require an oral hearing.
(8) The arbitrator shall issue a written
decision within 10 business days after receipt of all written submissions from
the parties or at the conclusion of an oral hearing.
(9) For the purpose of special expedited
arbitration, the superintendent may appoint arbitrators, qualified in
accordance with the provisions of this section, to serve on a per diem basis.
Such arbitrators shall contract with the designated organization. The rate of
per diem compensation shall be determined by the designated organization, after
consultation with the no-fault arbitrator screening committee subject to the
approval of the superintendent. Such arbitrators shall be independent
contractors, and shall not be employees or agents of the designated
organization or the Insurance Department.
(c) Consolidation. The designated
organization shall, except where impracticable, consolidate disputes for which
a request for arbitration has been received, if the claims involved arose out
of the same accident and involve common issues of fact.
(d) Qualifications of arbitrators for a
hearing held in New York State.
(1) No-fault
arbitrator screening committee. The superintendent shall appoint an advisory
committee composed of six members, who will review the qualifications of
applicants for the position of no- fault arbitrator for hearings to be held in
New York State and review the performance of the appointed arbitrators. The
screening committee shall make recommendations to the superintendent pertaining
to the appointment and dismissal of no-fault arbitrators. The committee shall
consist of one representative of the New York State Bar Association, one
representative of the New York State Trial Lawyer's Association, two
representatives of the insurance industry selected by the no-fault optional
arbitration advisory committee, a nonvoting representative of the designated
organization and a nonvoting representative of the Insurance Department. Tie
votes shall be reported as such to the superintendent.
(2) A no-fault arbitrator shall be an
attorney, licensed to practice law in New York State, with at least five years
experience which the no-fault arbitrator screening committee 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 the appointment of an
arbitrator.
(3) All no-fault
arbitrators shall be appointed by, and serve at the pleasure of, the
superintendent. An 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 an arbitrator, and the superintendent shall determine
whether the candidate should be disqualified. The superintendent shall forward
the name of all no-fault arbitrators to the designated organization, and
promptly inform the designated organization of all additions to, and deletions
from, the panel.
(4) No person
shall, during the period of appointment as an arbitrator, have any practice or
professional connection with any firm or insurer involved in any degree with
automobile insurance or negligence law. The no-fault arbitrator screening
committee, subject to the approval of the superintendent, shall establish any
additional qualifications for appointment as a no-fault arbitrator.
(e) Qualifications of arbitrators
for a hearing held outside New York State. For a hearing which will be held
outside New York State, the arbitrator shall be a licensed attorney in the
state or Canadian province where the hearing is held.
(f) Designation of arbitrator. The designated
organization shall assign an arbitrator who will hear the case, and shall
submit the name of the arbitrator to each party to the arbitration. The
designated organization shall maintain a file containing the professional
background of each of its no-fault arbitrators, and the information contained
therein shall be available to any party to the arbitration upon written or oral
request.
(g) Conflict of interest
and disqualification of arbitrator. No person shall serve as an arbitrator in
any arbitration in which such person has any financial or personal interest or
bias. If a party challenges an arbitrator, the specific grounds for the
challenge shall be submitted in writing to the designated organization, which
shall determine, in consultation with the Insurance Department, within 15
calendar days after receipt of the challenge, whether the arbitrator shall be
disqualified. Such written determination, in a format approved by the
department, shall be final and binding. If an arbitrator should resign, be
disqualified or be otherwise unable to perform necessary duties, the designated
organization shall assign another arbitrator to the case.
(h) Oaths. Arbitrators shall take an annual
oath of office. Arbitrators shall require all witnesses to testify under oath
or affirm that their statements are true under the penalties of
perjury.
(i) Time and place of
arbitration.
(1) The arbitration hearing
shall be held in the arbitrator's office or any other appropriate place
selected by the designated organization and, to the extent practicable, within
the general locale of the applicant's residence but, in no event, more than 100
miles from such residence. The arbitrator shall fix the time and place for such
hearing. At least 15 calendar days prior to the hearing, the designated
organization shall mail a notice of hearing to each party. Unless otherwise
agreed by the parties, the hearing shall be scheduled to be held within 30
calendar days of the date of the appointment of the arbitrator. The parties to
the arbitration shall not directly contact the arbitrator at any time prior to
or subsequent to the hearing, but shall direct all communications to the
designated organization.
(2)
Effective with arbitrations filed on and after March 1, 2002, if the applicant
requests arbitration within 90 days after the claim became overdue or within 90
days after receipt of the denial of claim, the arbitration shall be scheduled
for a hearing within 45 days after transmittal from the conciliation center,
when requested by the applicant.
(j) Postponements and adjournments. The
arbitrator may for good cause postpone or adjourn the hearing upon request of a
party or upon the arbitrator's own initiative. Each party may cause one
adjournment without the payment of an adjournment fee, if the adjournment
request is received by the designated organization at least two business days
prior to the scheduled arbitration. There shall be an adjournment fee of $50
payable to the designated organization by the party requesting any subsequent
adjournment. An adjournment fee of $100 shall be payable to the designated
organization by the party causing any adjournment within two business days
prior to the scheduled hearing. Such fees shall be used to defray the cost of
administration of the arbitration forum.
(k) Representation at arbitration. Any party
shall either represent itself or be represented by an attorney.
(l) Record of proceedings. A stenographic
record of the arbitration proceedings shall not be required. However, a party
requesting such a record shall inform the other party or parties of such
intent, make the necessary arrangements, and pay the cost thereof directly to
the person or agency making such record. Any other party or parties to the
arbitration shall be entitled to a copy of such record upon agreeing to share
the cost of the total stenographic expense. Whether or not a stenographic
record of the proceeding is made, the arbitrator shall, at a minimum, record
the exhibits offered by each party and the names and addresses of all parties
and witnesses.
(m) Interpreters.
Any party wishing an interpreter shall make all arrangements directly with the
interpreter and shall assume the costs of such services.
(n) Attendance at hearings. Persons having a
direct interest in the arbitration are entitled to attend hearings. It shall be
discretionary with the arbitrator to permit the attendance of any other
persons.
(o) Evidence.
(1) The arbitrator shall be the judge of the
relevance and materiality of the evidence offered, and strict conformity to
legal rules of evidence shall not be necessary. The arbitrator may question any
witness or party and independently raise any issue that the arbitrator deems
relevant to making an award that is consistent with the Insurance Law and
department regulations.
(2) The
arbitrator or an attorney of record in the arbitration may subpoena witnesses
or documents upon the arbitrator's own initiative or upon the request of any
party, when the issues to be resolved require such witnesses or
documents.
(3)
(i) For arbitrations filed prior to March 1,
2002, copies of all documents to be submitted to the arbitrator shall be
simultaneously transmitted to the other parties at least seven calendar days
prior to the hearing. The arbitrator shall determine if all parties received
such documents prior to the commencement of the hearing.
(ii) For arbitrations filed on or after March
1, 2002, the arbitrator shall determine if the parties provided and exchanged
documents in accordance with the requirements of section
65-4.2(b)(3) of
this Subpart.
(4) If a
party to an arbitration intends to introduce an expert witness at the hearing,
the identity of the expert witness must be given to all parties at least seven
calendar days prior to the hearing.
(p) Arbitration in the absence of a party.
The arbitration may proceed in the absence of any party who, after due notice,
fails to be present or fails to obtain a postponement or adjournment. An award
shall not be made in favor of an appearing party solely on the default of
another party. The arbitrator shall require the appearing party to submit such
evidence as may be required for the making of an award. The arbitrator may
require the appearance of a party at the hearing if the arbitrator determines
that the party's appearance is necessary to realize a fair and just resolution
of the dispute and to afford all parties due process.
(q) Reopening of hearing. The hearing may be
reopened by the arbitrator, for good cause, at any time before the award is
made.
(r) Time of award. The award
shall be made and delivered no later than 30 calendar days from the date the
hearing is completed or 30 days from the date of the designated organization's
transmittal of the final documentary proofs to the arbitrator. Failure to
adhere to this time limit shall not nullify the award.
(s) Form and scope of award. The award shall
be in writing in a format approved by the superintendent. It shall state the
issues in dispute and contain the arbitrator's findings and conclusions based
on the Insurance Law and Insurance Department regulations. It shall be signed
by the arbitrator and shall be transmitted to the parties by the designated
organization with a copy to the Insurance Department. The award shall contain a
decision on all issues submitted to the arbitrator by the parties. In the event
that the applicant prevails in whole or in part on the claim, the arbitrator
shall also direct the insurer to:
(1)
reimburse the applicant for the amount of the filing fee paid, unless the
filing fee had already been returned to the applicant;
(2) if due under section
5108 of the
Insurance Law, pay a reasonable attorney's fee in accordance with the
limitations set forth in section
65-4.6 of this Subpart;
and
(3) in an award of interest,
compute the amount due 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) of this
Part (stay of interest).
(t) Imposition of costs.
(1) Effective with arbitrations filed on and
after March 1, 2002, the arbitrator may impose all administrative costs of
arbitration to the applicant or apportion the administrative costs of
arbitration between the parties if the arbitrator concludes that the
applicant's arbitration request was frivolous, was without factual or legal
merit, or was filed for the purpose of harassing the respondent. Cases in which
arbitrators impose all administrative costs to the applicant shall be excluded
from the assessment calculation contained in subdivision (aa) of this
section.
(2) The amount of such
administrative costs per case shall be established for each calendar year by
the designated organization. The administrative cost shall be based upon the
actual administrative costs per case in the prior calendar year. Such costs
shall be paid to the designated organization and the receipt of such costs
shall be used to reduce the actual expenses of the designated organization for
the administration of the arbitration forum.
(u) Award upon settlement.
(1) If the parties settle their dispute
during the course of arbitration, the 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 master arbitrator or by a court. If an attorney's fee is due under section
5106 of the
Insurance Law, such fee shall be awarded in accordance with the limitations set
forth in section
65-4.6 of this Subpart. The award
shall be signed by the arbitrator and shall be transmitted to the parties by
the designated organization, with a copy to the Insurance Department.
(2) The insurer shall provide the designated
organization with the terms of settlement for transmittal to the arbitrator no
later than 30 calendar days following the scheduled date of the
hearing.
(v) 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.
(w) Interpretation and
application of procedures. The arbitrator shall interpret and apply these
procedures insofar as they relate to the arbitrator's powers and duties. All
other procedures shall be interpreted by the designated organization, subject
to consultation with and approval by the superintendent.
(x) Alternative legal remedies. The
designated organization shall not be made a party to a court proceeding
relating to an arbitration award unless the designated organization's presence
as a party is pertinent to the issues raised in the litigation. The
participation of a party in an arbitration proceeding shall be a waiver of any
claim against an arbitrator or the designated organization for any act or
omission in connection with any arbitration conducted under these rules. The
designated organization shall transmit to the superintendent copies of any
legal papers served upon designated organization or an arbitrator, relating to
any stay or appeal of an arbitration.
(y) Payment of award. Insurers shall, within
30 calendar days of the date of mailing of the award, either pay the amounts
set forth in the award or, where grounds exist, appeal to the master arbitrator
as provided for in this Part, which appeal shall stay payment of the award. The
award need not be confirmed into judgment.
(z) Arbitrator's compensation and expenses.
At the direction of the superintendent, arbitrators shall contract on an annual
basis with the designated organization. The rate of annual compensation shall
be determined by the designated organization, after consultation with the no-
fault arbitrator screening committee subject to the approval of the
superintendent. Arbitrators shall be independent contractors, and shall not be
employees or agents of the designated organization or the Insurance
Department.
(aa) Financing.
(1) The cost of administering the no-fault
arbitration forum 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 no-fault arbitration forum proceedings.
(2) Semiannually, the designated organization
shall prepare a budget of the estimated fees to be incurred for the operation
of the no-fault arbitration forum during the subsequent six- month period. The
estimated fees of the no-fault arbitration forum shall be assessed on a
proportionate basis to those insurers named as respondents on cases forwarded
to no-fault arbitration 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 fees for the operation of the no-fault arbitration
forum. 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 fee 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 fee 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 designated organization's assessment. Any adjustment shall
be made to the bill for the subsequent estimated assessment, as illustrated by
the following example:
EXAMPLE
(1)
Total no-fault arbitration forum cases closed during year 6,000
(2) Cases in which insurer A was named as a
respondent in the no-fault arbitration forum proceeding 250
(3) Insurer A's assessment percentage =
(2)/(1) 4.167%
(4) Actual expenses
of the no-fault arbitration forum $2,500,000
(5) Insurer A's actual expense = (3) x (4)
$104,175
(6) Insurer A's estimated
assessment $102,000
(7) Insurer A's
debit or (credit) = (5) - (6) $2,175
