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  1. Claim payment offset—premium due | Ask PIA

    While investigating a claim submitted by one of our auto insurance clients, the company found that there was earned premium due on the policy. The company is planning to withhold from the claim check an amount that will cover the earned premium. Can they offset the claim settlement to collect...

    Yes. Quoting from an Insurance Department Office of General Counsel opinion dated October 1972: The department has frequently been asked whether an insurance company or an insurance broker is permitted to use a return premium or claim payment due an insured to offset an earned premium...

  2. Cancellation to inception date

    | Ask PIA

    Our client is a law firm. On the renewal application for their claims-made professional liability coverage, one of the partners failed to disclose a situation that resulted in a claim. The company wants to cancel the policy back to the renewal date. This would cause problems obtaining “prior acts” coverage...

    No, assuming this is an authorized insurer. The importance of the policyholder protections afforded by Section 3426 is illustrated by the company’s desire to cancel this policy back to the inception date of the renewal (ab initio). This is prohibited by the terms of Section 3426 for its “covered policies,” which...

  3. Ocean-marine policies | Ask PIA

    Are ocean-marine policies governed by any New York law that spells out cancellation procedures?

    No. Ocean-marine policies as defined in Section 1113(a)(20) are not covered by the provisions of Section 3426 of the Insurance Law, which provides policyholder protections to most commercial policies. Ocean marine is included in a fairly wide variety of “principally marine” policies excluded from the protections afforded by Section 3426,...

  4. Time frames for auto theft claims | Ask PIA

    What is the required time frame for paying an auto theft claim when the vehicle is not recovered?

    The standards for settling such losses are found in 11 NYCRR 216.7—“Standards for prompt, fair and equitable settlement of motor vehicle physical damage claims.” It states: In the case of an unrecovered theft loss, except as provided in Section 216.8 of this part, the insurer shall...

  5. National Insurance Producer Registry—license renewal | Ask PIA

    I’m an agency owner and listed as the responsible producer for my agency, and hold a valid property/casualty license. Why won’t the National Insurance Producer Registry website let me renew the agency license?

    Most likely, your agency is licensed in additional lines, such as life & accident or health or “personal lines,” depending on your state. NIPR will not let you renew your agency’s license unless each line of coverage is represented with at least one responsible producer. In short, every line of...

  6. Bad check is not payment | Ask PIA

    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...

    Yes. The New York State Department of Financial Services addressed the effect of tendering a worthless check in OGC Opinion 94-75 (quoted in relevant part):“You raised the question of whether the premium is remitted if it is postmarked prior to the cancellation date but the check is subsequently dishonored, the...

  7. No-fault won’t cover eyeglasses | Ask PIA

    I have an insured who had an at-fault auto accident in which her prescription glasses were broken. The insurance company is telling her to collect under her homeowners policy because personal injury protection coverage will not pay for prescription glasses. Is this true?

    Yes. Only “prosthetic devices” which are required due to compensate for auto accident injuries are covered under personal injury protection. So, eyeglasses or hearing aids would not be covered, except in those cases in which an injury actually created the need for these items.

  8. Suspended drivers | Ask PIA

    We insure a couple who have two vehicles. The husband has recently had his license suspended, but the wife’s driving record is clean. The company has issued a midterm cancellation of the policy. Can the company do this?

    It depends on why the husband’s license was suspended. According to N.J.A.C. 11:3-8.10, midterm cancellation of a policy is permitted where another named insured or person insured under the policy, who either resides in the same household or customarily operates an automobile insured under the policy, has a suspended or...

  9. Payment of commissions | Ask PIA

    Whose responsibility is it to make sure that an agent is properly licensed to receive commission?

    The New Jersey Insurance Law (N.J.S.A. 17:22A-41) places responsibility on both the insurance company and producer, by prohibiting a person from receiving commission unless licensed, and prohibiting an insurer or producer from paying a commission to someone who is not properly licensed.

  10. Insurance scenarios—when to give | Ask PIA

    At what point in the process, do we need to offer the three scenarios?

    With respect to applicants, the insurance scenarios must “be provided in connection with a premium quotation or application and prior to execution of the coverage selection form.” With respect to existing insureds, they must be provided upon request.

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