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  1. Commercial lines—late nonrenewal procedure; short-term policy | Ask PIA

    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?

    No. If a nonrenewal notice is given late, but before the expiration date, the coverage remains in effect at the same terms and conditions as the expiring policy, until 60 days after the notice is mailed or delivered. If the insurer fails to get the notice out before the expiration...

  2. Insurer requirement | Ask PIA

    I noticed that the federal Terrorism Risk Insurance Act requirements apply to insurance companies licensed in any state. Does that mean that a company that is not licensed in New York cannot offer the TRIA coverage here?

    No. As long as the insurer is licensed in any state (foreign insurer) or is eligible as an excess-lines insurer (alien insurer), it is subject to the law. See the following definition from Section 102 of the law: (6) INSURER—The term `insurer’ means any entity, including any...

  3. ‘Insuring’ cell phones | Ask PIA

    Are third-party representatives authorized to insure my clients’ phones?

    The tricky word in this question is “insure.” The third-party representatives are able to replace a lost or stolen cell phone by selling “insurance,” if they have an insurance contract as defined by New York State Insurance Law Sections 1101(a), (b)(1)(C) and 1102(a): “it would confer a benefit of...

  4. Grants from Motor Vehicle Law Enforcement Fee funds for law enforcement | Ask PIA

    I know that a portion of the $5 per-vehicle Motor Vehicle Law Enforcement Fee is supposed to go to support local law enforcement efforts. How are these grants awarded?

    A 12-member board directs this program; it is chaired by the commissioner of the state Division of Criminal Justice Services. Eligible for grants are any locality, governmental agency or not-for-profit organization for programs providing public education on auto theft and fraud prevention or support for specialized law enforcement units. More...

  5. Parental liability | Ask PIA

    Our client has a youthful operator residing in their household under the age of 21 who has their own personal automobile policy. Are the parents’ subject to a liability exposure for the youthful operator? If the youthful operator has minimum limits of liability, does this create a liability exposure for...

    According to PIA QuickSource document No. QS06015, titled Parental liability for a child’s use of an auto, parents do have an exposure. There are a number of legal theories that could be advanced to assign liability to a parent. However, just being a parent is not one of...

  6. Rebates | Ask PIA

    May a producer provide an inducement to a customer to purchase insurance from the producer, such as merchandise, money or a gift certificate?

    Producers are permitted to provide inducements to purchase insurance, such as money, gifts or other valuable consideration as long as the value of the inducement is not greater than $100. The Department of Banking and Insurance revised the value of permitted inducements from $25 to $100 effective Nov. 20, 2017.

  7. Liability exposures on agency book sale | Ask PIA

    I am selling my book of business to another agency and will be working for them under their name. What is my liability if a claim should arise on a policy from last year? How long will I be held liable from prior policies? 

    If you are selling a book of business, you would still have liability exposure for acts or omissions for which you are legally responsible. Therefore, if last year, you committed an act or omission on a policy, you could still be sued even though ownership of the book of business...

  8. Electronic record retention | Ask PIA

    Are insurance producers required by law to maintain original, hard copies of certain documents, such as those with signatures?

    No. New Jersey’s record retention regulation (N.J.A.C. 11:17C-2.6); which allows for the electronic retention of records, does not require that hard copies be retained so long as certain conditions are met: That all of the elements required by this chapter to be maintained are contained in the electronic...

  9. Homeowners protection for building renovations | Ask PIA

    A homeowner insured is hiring a contractor to do substantial work ($350,000) on his home. The contractor provides a certificate of liability insurance but claims he does not need workers’ compensation because he subs out all of the work to subcontractors or does the work himself. If a worker is...

    A homeowner is not liable to pay workers’ compensation benefits to workers injured on the premises, provided the homeowner is not in the business of construction; that is, construction is not the homeowner’s trade. The principal employer statute (Section 31-291) would not apply in this case to hold the...

  10. Cancellation of a premium-financed policy in Connecticut | Ask PIA

    A premium-financed policy was canceled and the insurer imposed a short-rate penalty. We thought the insurer could not do that, if canceled by someone other than the insured. What’s the rule?

    A request by a premium-finance company for cancellation is considered under law to be the equivalent of a request from the insured. The law also states that any policy provisions for calculating the return premium apply to cancellations under a premium-finance agreement. So, assuming the policy contained a short-rate provision...

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