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RULES AND REGULATIONS OF THE STATE OF NEWYORKTITLE 11. INSURANCE DEPARTMENTChapter IX — UNFAIR TRADE PRACTICESPart 216. Unfair Claims Settlement Practices and ClaimCost Control Measures(Regulation 64)11 NYCRR 216.0 Preamble(a) Section 2601 of the Insurance Law prohibits insurers doing business in thisstate from engaging in unfair claims settlement practices and provides that, if anyinsurer performs any of the acts or practices proscribed by that section without justcause and with such frequency as to indicate a general business practice, then thoseacts shall constitute unfair claims settlement practices. This Part contains claimpractice rules which insurers must apply to the processing of all first-and third-partyclaims arising under policies subject to this Part. In addition, specific rules are providedfor the processing of first-party motor vehicle physical damage claims and third-partyproperty damage claims arising under motor vehicle liability insurance contracts.(b) This Part is issued for the purpose of defining certain minimum standards which,if violated without just cause and with such frequency as to indicate a general businesspractice, would constitute unfair claims settlement practices. This Part is not exclusive,and other acts, not herein specified, may also be found to constitute such practices.(c) Section 3411(i) of the Insurance Law has been implemented by section 216.7of this Part.(d) Section 3412 of the Insurance Law has been implemented by section 216.8 ofthis Part.(e) Claim practice principles to be followed by all insurers:(1) Have as your basic goal the prompt and fair settlement of all claims.(2) Assist the claimant in the processing of a claim.(3) Do not demand verification of facts unless there are good reasons to do so.When verification of facts is necessary, it should be done as expeditiously aspossible.(4) Clearly inform the claimant of the insurer's position regarding any disputedmatter.1
(5) Respond promptly, when response is indicated, to all communications frominsureds, claimants, attorneys, and any other interested persons.(6) Every insurer shall distribute copies of this regulation to every persondirectly responsible for the supervision, handling and settlement of claims subjectto this regulation, and every insurer shall satisfy itself that all such personnel arethoroughly conversant with, and are complying with, this regulation.HistorySec. filed Dec. 5, 1972; amd. filed Jan. 14, 1975; repealednew filed May 12, 1982; amd. filed Sept. 4, 1984 eff. Oct. 1,1984.11 NYCRR 216.1 DefinitionsThe definitions set forth in this section shall govern the construction of the terms usedin this Part.(a) Agent shall mean any person, firm, association, or corporation authorized toact as the representative of an insurer and licensed pursuant to the provisions of article21 of the Insurance Law. With respect to group life and group accident and healthpolicies, the group policyholder shall be the agent of the insurer to the extent suchpolicyholder has been authorized to act on behalf of such insurer.(b) Claimant shall mean any person who attempts to obtain a benefit from aninsurer.(c) Investigation shall mean any procedure adopted by an insurer to determinewhether to accept or reject a claim.(d) Business day shall mean a day other than Saturday, Sunday or a New YorkState legal holiday.(e) Notice of claim shall mean any notification, whether in writing or otherwise, toan insurer or its agent, by any claimant who reasonably apprises the insurer of thefacts pertinent to a claim.HistorySec. filed Dec. 5, 1972; repealed new filed May 12, 1982; amd.filed Sept. 4, 1984 eff. Oct. 1, 1984.11 NYCRR 216.2 ApplicabilityThis Part shall apply to all insurers licensed to do business in this state.(a) It shall not be applicable to policies of workers' compensation insurance issuedpursuant to the provisions of section 1113(a)(15) of the Insurance Law; creditinsurance issued pursuant to the provisions of section 1113(a)(17); title insuranceissued pursuant to the provisions of section 1113(a)(18); inland marine insuranceissued pursuant to the provisions of section 1113(a)(20); unless such insurance issubject to the provisions of section 3425 of the Insurance Law; and ocean marineinsurance issued pursuant to the provisions of section 1113(a)(20) and (21).2
(b) Subdivisions (a) and (b) of section 216.6 of this Part shall not be applicable topolicies of life insurance written pursuant to the provisions of section 1113(a)(1) ofthe Insurance Law. Subdivision (b) of section 216.6 of this Part shall not be applicableto accident and health policies written pursuant to the provisions of section 1113(a)(3)and the provisions of article 43 of the Insurance Law.(c) Sections 216.4 and 216.5 and subdivision (c) of section 216.6 of this Part shallnot be applicable to policies of accident and health insurance written pursuant to theprovisions of section 1113(a)(3) and the provisions of article 43 of the Insurance Law,where the claimant is neither a policyholder, a certificate holder under a policy of groupinsurance, nor a relative or member of the household of such policy or certificateholder.(d) Subdivision (b) of section 216.3, subdivision (b) of section 216.4 andsubdivision (a) of section 216.5 of this Part shall not be applicable to policies ofinsurance where the claimant is represented by a public adjuster or a person acting inthe capacity of a public adjuster pursuant to the provisions of article 21 of theInsurance Law.(e) This Part shall also apply to an unauthorized insurer with respect to a grouppolicy issued pursuant to section 3455 of the Insurance Law.HistorySec. filed Dec. 5, 1972; amd. filed Jan. 14, 1974; repealed newfiled May 12, 1982; amd. filed Sept. 4, 1984 eff. Oct. 1, 1984;emergency eff. 6-6-2017, expires 8-3-2017; emergency eff. 9-12017, expires 10-30-2017; permanent eff. 10-25-2017; amd. 1025-2017.11 NYCRR 216.3 Misrepresentation of policy provisions(a) No insurer shall knowingly misrepresent to a claimant the terms, benefits, oradvantages of the insurance policy pertinent to the claim.(b) No insurer shall deny any element of a claim on the grounds of a specific policyprovision, condition or exclusion unless reference to such provision, condition orexclusion is made in writing.(c) Any payment, settlement or offer of settlement which, without explanation,does not include all amounts which should be included according to the claim filed bythe claimant and investigated by the insurer shall, provided it is within the policy limits,be deemed to be a communication which misrepresents a pertinent policy provision.HistorySec. filed Dec. 5, 1972; repealed new filed May 12, 1982 eff. Aug.15, 1982.11 NYCRR 216.4 Failure to acknowledge pertinent communications(a) Every insurer, upon notification of a claim, shall, within 15 business days,acknowledge the receipt of such notice. Such acknowledgment may be in writing. Ifan acknowledgment is made by other means, an appropriate notation shall be made3
in the claim file of the insurer. Notification given to an agent of an insurer shall benotification to the insurer. If notification is given to an agent of an insurer, such agentmay acknowledge receipt of such notice. Unless otherwise provided by law or contract,notice to an agent of an insurer shall not be notice to the insurer if such agent notifiesthe claimant that the agent is not authorized to receive notices of claims.(b) An appropriate reply shall be made within 15 business days on all otherpertinent communications.(c) Every insurer shall establish an internal department specifically designated toinvestigate and resolve complaints filed with the Department of Financial Services andto take action necessitated as a result of its complaint investigation findings. Suchinternal department is to operate in a staff capacity to the entire company withauthority to question and change the position taken in individual instances or companypractices generally. Responsibility for such department is to be vested in a corporateofficer who is also to be entrusted with the duty of executing the Department ofFinancial Services' directives. If the Department of Financial Services requests theappearance of an insurer representative to discuss a pending matter, the individualwhom the company sends shall be authorized to make any determination warrantedafter all the facts are elicited at such conference. Each insurer must furnish thesuperintendent with the name and title of the corporate officer responsible for itsinternal consumer services department.(d) Every insurer, upon receipt of any inquiry from the Department of FinancialServices respecting a claim, shall, within 10 business days, furnish the departmentwith the available information requested respecting the claim.(e) As part of its complaint handling function, an insurer's consumer servicesdepartment shall maintain an ongoing central log to register and monitor all complaintactivity.HistorySec. filed Dec. 5, 1972; repealed, new filed May 12, 1982; amd.filed Sept. 4, 1984 eff. Oct. 1, 1984; amd. 6-1-2013; amd. 8-12013.11 NYCRR 216.5 Standards for prompt investigation of claims(a)(1) Every insurer shall commence an investigation of any claim filed by aclaimant, or by a claimant's authorized representative, within 15 business days ofreceiving notice of claim. An insurer shall furnish to every claimant, or claimant'sauthorized representative, a notification of all items, statements and forms, if any,which the insurer reasonably believes will be required of the claimant, within 15business days of receiving notice of the claim. A claim filed with an agent of an insurershall be deemed to have been filed with the insurer unless, consistent with law orcontract, such agent notifies the person filing the claim that the agent is not authorizedto receive notices of claim.(2)(i) Notwithstanding paragraph one of this subdivision, the provisions of thisparagraph shall apply to any claim filed on or after November 29, 2012 for loss,damage, or liability for loss, damage, or injury, occurring from October 26, 2012through November 15, 2012, in the counties of Bronx, Kings, Nassau, New York,4
Orange, Queens, Richmond, Rockland, Suffolk or Westchester, including theiradjacent waters, with respect to:(a) loss of or damage to real property;(b) loss of or damage to personal property; or(c) other liabilities for loss of, damage to, or injury to persons or property.(ii) Every insurer shall commence an investigation of any claim filed by aclaimant, or by a claimant's authorized representative, within six business daysof receiving notice of claim. If the insurer wishes its investigation to include aninspection of the damaged or destroyed property, the inspection, whetherperformed by the insurer, an independent adjuster, or other representative ofthe insurer, must occur within the time frames specified in this paragraph.(iii) An insurer shall furnish to every claimant, or claimant's authorizedrepresentative, a written notification detailing all items, statements and forms,if any, that the insurer reasonably believes will be required of the claimant, withinsix business days of receiving notice of the claim.(iv) A claim filed with an agent of an insurer shall be deemed to have beenfiled with the insurer unless, consistent with law or contract, the agent notifiesthe person filing the claim that the agent is not authorized to receive notices ofclaim.(v) Where necessary to protect health or safety, a claimant may commenceimmediate repairs to heating systems, hot water systems, and necessaryelectrical connections, as well as exterior windows, exterior doors, and, for minorpermanent repairs, exterior walls, in order to enable property to retain heat, andany policy requirement that the policyholder exhibit the remains of the propertymay be satisfied by the policyholder submitting proof of loss documentation ofthe damaged or destroyed property, including photographs or video recordings;material samples, if applicable; and inventories, as well as receipts for anyrepairs to or replacement of property. This subparagraph does not apply toclaims under flood policies issued under the national flood insurance program.(b) Where there is a reasonable basis, supported by specific information availablefor review by Department of Financial Services examiners, that the claimant hasfraudulently caused or contributed to the loss, the insurer is relieved from therequirements of this Part. The provisions of this Part are suspended for the periodrequired to investigate the alleged fraudulent aspects of the claim. The insurer mustsubmit the report required by Part 86 (Criminal Investigations Unit) of this Title whenan insurer determines that a loss is suspect.HistorySec. filed Dec. 5, 1972; repealed, new filed May 12, 1982 eff. Aug.15, 1982; emergency eff. 11-29-2012, expires 2-27-2013;emergency eff. 2-26-2013, expires 5-26-2013; amd. 6-1-2013;emergency eff. 5-24-2013, expires 8-21-2013; permanent eff. 81-2013; amd. 8-1-2013.5
11 NYCRR 216.6 Standards for prompt, fair and equitable settlements(a) In any case where there is no dispute as to coverage, it shall be the duty ofevery insurer to offer claimants, or their authorized representatives, amounts whichare fair and reasonable as shown by its investigation of the claim, providing theamounts so offered are within policy limits and in accordance with the policyprovisions.(b) "Actual cash value," unless otherwise specifically defined by law or policy,means the lesser of the amounts for which the claimant can reasonably be expectedto:(1) repair the property to its condition immediately prior to the loss; or(2) replace it with an item substantially identical to the item damaged. Suchamount shall include all monies paid or payable as sales taxes on the item repairedor replaced. This shall not be construed to prevent an insurer from issuing a policyinsuring against physical damage to property, where the amount of damages to bepaid in the event of a total loss to the property is a specified dollar amount.(c) Within 15 business days after receipt by the insurer of a properly executedproof of loss and receipt of all items, statements and forms which the insurer requestedfrom the claimant, the claimant, or the claimant's authorized representative, shall beadvised in writing of the acceptance or rejection of the claim by the insurer. When theinsurer suspects that the claim involves arson, the foregoing 15 business days shallbe read as 30 business days pursuant to section 2601 of the Insurance Law. If theinsurer needs more time to determine whether the claim should be accepted orrejected, it shall so notify the claimant, or the claimant's authorized representative,within 15 business days after receipt of such proof of loss, or requested information.Such notification shall include the reasons additional time is needed for investigation.If the claim remains unsettled, unless the matter is in litigation or arbitration, theinsurer shall, 90 days from the date of the initial letter setting forth the need for furthertime to investigate, and every 90 days thereafter, send to the claimant, or theclaimant's authorized representative, a letter setting forth the reasons additional timeis needed for investigation. If the claim is accepted, in whole or in part, the claimant,or the claimant's authorized representative, shall be advised in writing of the amountoffered. In any case where the claim is rejected, the insurer shall notify the claimant,or the claimant's authorized representative, in writing, of any applicable policyprovision limiting the claimant's right to sue the insurer.(d) The company shall inform the claimant in writing as soon as it is determinedthat there was no policy in force or that it is disclaiming liability because of a breachof policy provisions by the policyholder. The insurer must also explain its specificreasons for disclaiming coverage.(e) In any case where there is no dispute as to one or more elements of a claim,payment for such element(s) shall be made notwithstanding the existence of disputesas to other elements of the claim where such payment can be made without prejudiceto either party.6
(f) Every insurer shall pay any amount finally agreed upon in settlement of all orpart of any claim not later than five business days from the receipt of such agreementby the insurer or from the date of the performance by the claimant of any conditionset by such agreement, whichever is later, except as provided in section 331 of theInsurance Law as respects liens by tax districts on fire insurance proceeds.(g) Checks or drafts in payment of claims; releases.No insurer shall issue a check or draft in payment of a first-party claim or anyelement thereof, arising under any policy subject to this Part that contains anylanguage or provision that expressly or impliedly states that acceptance of suchcheck or draft shall constitute a final settlement or release of any or all futureobligations arising out of the loss. No insurer shall require execution of a releaseon a first- or third-party claim that is broader than the scope of the settlement.(h) Any notice rejecting any element of a claim involving personal propertyinsurance shall contain the identity and the claims processing address of the insurer,the insured's policy number, the claim number, and the following statementprominently set forth:"Should you wish to take this matter up with the New York State Department of FinancialServices, you may file with the Department either on its website m or you may write to or visit theConsumer Assistance Unit, Financial Frauds and Consumer Protection Division, New YorkState Department of Financial Services, at: One State Street, New York, NY 10004; OneCommerce Plaza, Albany, NY 12257; 1399 Franklin Avenue, Garden City, NY 11530; orWalter J. Mahoney Office Building, 65 Court Street, Buffalo, NY 14202."HistorySec. filed Dec. 5, 1972; amd. filed Apr. 5, 1973; amd. filed Jan. 14, 1975;repealed, new filed May 12, 1982; amd. filed Sept. 4, 1984 eff. Oct. 1,1984; amd. filed April 7, 1997 eff. April 23, 1997; amd. filed Jan. 16, 1998eff. Feb. 4, 1998; amd. filed Feb. 14, 2003 eff. March 5, 2003; amd. filedJune 3, 2003 eff. June 18, 2003; amd. 3-1-2013; emergency eff. 2-262013, expires 5-26-2013; permanent eff. 6-1-2013; amd. 6-1-2013;emergency eff. 5-24-2013, expires 8-21-2013; permanent eff. 2-1-2017;amd. 2-1-2017.7
11 NYCRR 216.7 Standards for prompt, fair and equitable settlement of motorvehicle physical damage claimsThis section is applicable to claims arising under motor vehicle collision andcomprehensive coverages. The provisions of this Part shall continue to be applicableto these claims, except to the extent that such provisions are inconsistent with thespecific provisions of this section. The sections of this Part that do not apply at all tomotor vehicle physical damage claims are sections 216.2(b) — (d), 216.6(c), (h), and216.9 of this Part.(a) The following shall govern the construction of the terms used in this section:(1) Agreed price shall mean the amount agreed to by the insurer and theinsured, or their representatives, as the reasonable cost to repair damages to themotor vehicle resulting from the loss, without considering any deductible or otherdeductions.(2) Designated representative (DR) shall mean an insured's broker of record oran insured's intended repair shop designated by the insured to represent theinsured shop in negotiations with the insurer in an attempt to settle the claim. Suchdesignated representative may legally act on the insured's behalf. If the designatedrepresentative is the insured's intended repair shop, such repair shop, if locatedwithin New York state, must be registered pursuant to the provisions of the MotorVehicle Repair Shop Registration Act (article 12-A, Vehicle and Traffic Law) and mayonly represent t
RULES AND REGULATIONS OF THE STATE OF NEW YORK TITLE 11. INSURANCE DEPARTMENT Chapter IX — UNFAIR TRADE PRACTICES Part 216. Unfair Claims Settlement Practices and Claim Cost Control Measures (Regulation 64) 11 NYCRR 216.0 Preamble (a) Section 2601 of the Insuran
