Ask PIA

Reinstatement after nonpayment cancellation is not required

Is there any rule requiring an insurance company to reinstate a policy that has been canceled due to nonpayment of premium?

No short-rate for premium-financed policies

What is the minimum-earned premium rule of premium-financed policies?

Bad check is not payment

A client insured under a commercial package policy was sent a notice of cancellation for nonpayment. The insured then sent the company a check that bounced. The company sent a reinstatement notice to the insured, but sent no second notice of cancellation. The company did not tell us that the check had bounced. At this point, the premium has not been paid and the company says the policy is canceled. Can they cancel the policy without sending a second cancellation notice?

Renewal policy substitute by affiliate insurer

When a new policy is issued to replace the previous policy at renewal, must the insurer provide a conditional renewal notice? Sometimes this occurs when an affiliate insurer or newly merged insurer performs the renewal.

Length of a binder

In New York state, how long is a binder good for?

Nonpayment cancellation—policies paid from escrow accounts

Is there any special rule requiring an insurance company to notify the policyholder due to nonpayment of premium, where the policy is paid by the mortgagee?

Cancellation—premium-financed policies

Is an insurance company required to issue its own cancellation notice to the policyholder when a premium-financed policy is canceled for nonpayment?

Reinstatement after premium-finance agency cancels

My insured received a notice of nonpayment cancellation from a premium-finance agency. If the insured pays the premium-finance agency, must the policy be reinstated by the insurer?

Authorized representative to receive cancellation notice

Is a cancellation notice effective if an insurance company fails to provide cancellation notice to the authorized insurance agent or broker that the insured designates to receive information on the insured’s behalf?

Notice of cancellation on wholesale business

What are the notice obligations of an insurer to the retail producer when canceling or nonrenewing a policy that has been placed through a wholesale broker? Should I expect to receive a copy of the notice?

Auto renewals—nonpayment cancellations

Can a company, after the renewal date, issue a cancellation notice for nonpayment of a New York personal auto policy renewal premium; and, if the premium remains unpaid during the 15-day “grace period,” cancel the policy as of the renewal date?

Offsets—premium-financed policy nonpayment cancellation

An insured paid a deposit premium with his personal check and premium financed the balance. The premium-finance company subsequently canceled the policy for nonpayment, in accordance with Section 576 of the New York Banking Law. May the insurer retain (offset) money owed by the insured on a prior year’s policy against the amount paid by the insured with his personal check?

Auto renewal—at-fault accident

Can a company cancel an auto policy on renewal because an insured had an at-fault accident during the policy term?

Commercial lines—late nonrenewal procedure; short-term policy

We have a company that frequently misses the deadline for issuing nonrenewal notices on commercial-lines policies. In these cases, they issue brand-new policies (not extensions of the in-force policy) for the amount of time required to give statutory notice. Then they cancel the new policies. Is this correct?

Increased premium

Is a real-estate errors and omissions claims-made policy subject to the statutory requirement of 60 days’ notice for an increase in premium of more than 10 percent?

Cancellation at policyholder’s re

Is a company required to cancel flat when the policyholder presents evidence that another policy was obtained for the same risk that became effective on the same date as the policy the insured wants to cancel?

Late nonrenewal notice

My commercial-lines client just received a nonrenewal notice 10 days prior to his policy effective date. The notice states that they are nonrenewing the policy to be effective during the new policy period. Is this legal?

Company not required to forego earned premium, accept LPR

We issued a binder for a client. Ultimately, they decided to go with another carrier instead. This was a year ago. The company is billing for the earned premium and will not accept a Lost Policy Release to cancel flat. We sent them a copy of the other company’s policy, but this did not change their mind. Are they required to accept the loss policy release?

Undisclosed driver—billing for additional premium

After an accident, a company learned that one of our personal auto policyholders has had an undisclosed youthful driver in the household for the past couple of years. Now the company is billing the client for the premium it would have collected, had it known of this driver. Can they do this?

Time frame for mailing—personal lines nonrenewal notice

A company recently sent a nonrenewal notice to a personal-lines customer. In order to say that the company gave at least 45 days’ notice, we would have to include both the date of mailing and the renewal date within the 45 days. Did this company’s notice comply with the law?

Termination rights under Section 3425(j) extend to brokers

As an insurance wholesaler, our firm accepts business from licensed insurance brokers. If we terminate a broker’s agreement, is the broker entitled to certain protections under Section 3425(j) of the Insurance Law for the personal lines policies placed pursuant to the agreement?

Nonpayment cancellations

When a nonpayment notice is issued, may an insurer add-in the next installment of a personal auto premium, on top of the amount already past due, so the insured must pay both to prevent cancellation, even if the second installment is not yet due?

Which agent should sign the ACORD 35

When a client decides to change from one policy to another—firing the old agent and hiring a new agent—which agent should complete the ACORD 35 form and request cancellation of the old policy?

Calculating the 60-45 day-notice time frame for personal lines

An insurance company sent a homeowner client of ours a nonrenewal notice. It was mailed on Oct. 1, and the policy expiration date is Nov. 30. Is this a valid nonrenewal notice, or did they send it too soon? It seems to us that they provided 61 days’ notice, which is outside the statutory time frame.

Time frames for canceling under the 60-day “free look”

If a company decides to cancel a brand-new policy during its 60-day “free look” period, when does the cancellation notice have to be mailed, and when does the cancellation take effect?

Commercial insurance policy cancellation based on an insured’s failure to comply with an insurer’s recommendations

Is an insured’s failure to comply with an insurer’s recommendations, in and of itself, a valid basis for canceling a new or renewed commercial-lines insurance policy?

Nonpayment cancellation gap prevention

How does the effective time for nonpayment cancellation affect a policyholder who intends to make the payment on the cancellation date?

Cancellation at policyholder’s request—effective date

Is a company required to cancel flat when the policyholder presents evidence that another policy was obtained for the same risk, and became effective on the date the policyholder wants to cancel?

Cancellation/nonrenewal—workers’ compensation

Are workers’ compensation policies subject to the cancellation/nonrenewal rules of New York State Insurance Law Section 3426?

Does a notice of renewal supersede a previously sent notice of nonrenewal?

A carrier issued a notice of nonrenewal for a personal auto policy in June and then issued the renewal policy effective August and billed the insured. Does the renewal supersede the nonrenewal and, if he pays it, is the policy considered “in force”?

Special conditional renewal notice—premium increases

What is the premium increase that triggers a special conditional renewal notice, or any special obligations of the agent?

Back dating a policy

After two years of a policy being in force, can an insured request to back date cancellation two years. The insured has stated he has a duplicate policy.

Short-rate cancellation—personal lines

When an insured cancels a New York personal-lines property/casualty policy, may the insurer calculate the return premium on a short-rate basis?

Personal auto—cancellation for nonpayment notification

One of our clients received a nonpayment cancellation notice for his personal auto policy in the mail; however, it did not state the amount due. I thought that nonpayment cancellations had to identify the amount due on them. Am I correct?

Commercial-lines insurance cancellation notice

During the first 60 days a commercial-lines insurance policy is in effect, how many days written notice must be given for the policy cancellation and to whom?

Cancellation due to catastrophe loss

Can an insurance carrier cancel a homeowners policy due to a catastrophe loss?

Homeowners cancellation due to catastrophic loss

Can an insurer nonrenew a homeowners policy due to a catastrophic loss?

Cancellation due to catastrophe loss

Can an insurance carrier cancel a homeowners policy due to a catastrophe loss?

Premium increase on a homeowners policy

On a New York homeowners policy, is the carrier required to give a 60-day conditional renewal notice for an increase in premium over 10 percent, as is the case for commercial-lines policies?

System changeover—increase in premium

One of my carriers is discontinuing their computer system. As a result, they are nonrenewing the commercial policies of all policyholders on that system and offering replacement policies on their new system. However, in many cases the carrier also is increasing the premiums of those policies by more than 10 percent without notice to the insured of the increase. Can they do this?

Cancellation notices—producers

Must an insurer that cancels an insurance policy in accordance with New York Insurance Law Section 3425 provide cancellation notices to all insurance agents and brokers that may be within the chain of producers of a particular policy?

Returned premiums—deceased insured or dissolved business

If an agency has funds for an insured that passed away or a business which no longer exists and, in turn, cannot return funds, what is the procedure?

Return premium calculation—midterm cancellation of premium-financed policy

Which cancellation procedure would be more advantageous to our client on a large, premium-financed commercial property risk? The policy has been in effect about four months, and it contains a short-rate cancellation penalty. Now, the client wishes to cancel midterm, in order to take advantage of a lower premium available elsewhere. In fact, his new policy already is in force; it took effect about two weeks ago.

Should the client request cancellation retroactive to the date the other policy took effect? Or, should the client refrain from paying a premium now past-due to the premium-finance company and let the premium-finance company cancel the policy based on his nonpayment?

Renewal conditioned upon a new application

Sometimes our insured does not return their professional liability renewal application prior to the policy expiration; or does complete the application, receives a renewal proposal, but then does not order the renewal before expiration. Can the insurer expire the policy without further notice?