The Office of General Counsel issued the following opinion on May 26, 2005, representing the position of the New York State Insurance Department.

Re: Automobile Insurer Reporting of Private Passenger Automobile First-party Physical Damage and Third-party Property Damage Losses Required by Section 216.8(d)(2) of Regulation 64 to the Central Organization ISO

Question Presented:

Does the insurer's procedure and information quoted in the facts below regarding its reporting of private passenger automobile first-party physical damage and third-party property damage losses to the central organization referred to in N.Y. Comp. Codes R. & Regs. tit. 11, § 216.8(c) (2004) (Regulation 64), which the Superintendent has designated to be ISO, comply with the requirement of N.Y. Comp. Codes R. & Regs. tit. 11, § 216.8(d)(2) (2004) (Regulation 64) (hereinafter "Section 216.8(d)(2)")?

Conclusion:

Yes, if: (1) Section 216.8 of Regulation 64 is applicable pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 216.8(b) (2004) (Regulation 64) (hereinafter "Section 216.8(b)"), (2) the insurer reports to the central organization first-party physical damage and third-party property damage losses to the claimant's1 private passenger automobile other than total theft losses where the damage to the vehicle exceeds $2500, and (3) the central organization is ISO.

Facts:

The insurer's procedure and information was submitted pursuant to Section 216.8(d)(2) as follows:

Our company staff appraisers complete estimates in an electronic estimating platform. Once an estimate is completed, the electronic estimating platform communicates both partial and total loss estimate information on a daily basis to the ISO/NICB [sic] database (central organization). The information transmitted includes: type of coverage, point of impact, partial or total loss identifier, name of reporting insurer, insurer phone number, claim number, vehicle identification number, year, make, model, and mileage of vehicle, date of estimate. ISO/NICB [sic] then creates a file number to confirm report.

Analysis:

Section 216.8(d)(2) of Regulation 64 states:

(d) Reporting and follow-up requirements. Insurers shall report all private passenger automobiles involved in losses to the central organization as follows: . . .

(2) All other first and third-party losses, however sustained, where damage to the claimant's vehicle exceeds $2,500 shall be reported to the central organization no later than five calendar days after the sale of salvage or, if the insured or claimant is permitted to retain the vehicle, no later than five calendar days after the date of loss payment.

Section 216.8(d)(2) does not specify, nor does the Insurance Law or any other provision of Regulation 64 specify, whether electronic submission of loss settlement information to ISO is acceptable. However, the short time period for submission of information makes electronic submission of information pragmatic and acceptable.

Section 216.8(d)(2) is encompassed within the entire Section 216.8 of Regulation 64. Section 216.8(b) provides the prerequisite for the applicability of Section 216.8. Section 216.8(b) states:

(b) Applicability. This section shall apply to all losses involving private passenger automobiles of the current model year and the preceding six model years and older private passenger automobiles with an actual cash value of $5,000 or more, prior to the loss. A private passenger automobile shall mean a four-wheel private passenger vehicle, station wagon, van, jeep-type vehicle, sport utility vehicle or pickup truck.

Terms within Section 216.8(b) that are not defined by that provision are "private passenger automobiles of the current model year" and "actual cash value". The term "private passenger automobile of the current model year" is defined by N.Y. Comp. Codes R. & Regs. tit. 11, § 216.7(c)(3) (2003) (Regulation 64). Section 216.7(c)(3) is contained in Section 216.7(c) of Regulation 64 that applies to adjustment of first-party physical damage claims for total losses to motor vehicles, which include private passenger automobiles defined by Section 216.8(b). The term "Actual cash value" is defined by N.Y. Comp. Codes R. & Regs. tit. 11, § 216.6(b) (2003) (Regulation 64); this provision applies to both partial and total losses to property, which includes private passenger automobiles defined by Section 216.8(b).

If the first-party physical damage loss meets the factual requirements of Section 216.8(b) then Section 216.8(d)(2) applies to the first-party physical damage loss where the damage to the private passenger automobile exceeds $2500. Note that N.Y. Comp. Codes R. & Regs. tit. 11, § 216.10(d) (2003) (Regulation 64) provides that insurers shall report third-party property damage losses to ISO consistent with Section 216.8(d)(2). Reporting of a total theft loss is treated in N.Y. Comp. Codes R. & Regs. tit. 11, § 216.8(d)(1) (2004) (Regulation 64).

The insurer's compliance with Section 216.8(d)(2) facilitates the required reporting of suspected fraud addressed by N.Y. Comp. Codes R. & Regs. tit. 11, § 216.8(h) (2004) (Regulation 64) to ISO and our Frauds Bureau regarding loss settlement of first-party physical damage and third-party property damage losses incurred to private passenger automobiles.

For further information you may contact Senior Attorney Robert Freedman at the New York City Office.

1  N.Y. Comp. Codes R. & Regs. tit. 11, § 216.1(b) (1982) (Regulation 64) defines "Claimant" as "any person who attempts to obtain a benefit from an insurer."