Circular Letter No. 25 (2001)

September 5, 2001


All Motor Vehicle Self-insurers and Insurers Licensed to Write Motor Vehicle Insurance in New York State


Insurance Department Regulation 68 Lawsuit

The Insurance Department had promulgated a revision to Insurance Department Regulation 68, the regulation that implements New York's No-Fault law. This revision, which took effect on September 1, 2001, made adjustments to the manner in which No-Fault claims are presented and processed in order to address practices that have resulted in fraud and abuse in the New York automobile insurance marketplace. The revision to Regulation 68 reflected the Department's commitment to addressing the abusive practices and fraud that threaten the viability of New York's No-Fault motor vehicle reparations system.

On August 29, 2001, various plaintiffs filed a lawsuit in the New York State Supreme Court seeking a stay of enforcement of the revised regulation. On August 31, 2001, Justice Alice Schlesinger granted a temporary stay of the revised regulation. Subsequently, the Insurance Department filed a Notice of Appeal in the Appellate Division, First Department and served such notice on plaintiffs. The Office of Attorney General had advised the Insurance Department that, pursuant to CPLR Section 5519(a)(1), an immediate stay of Justice Schlesinger's order was in effect.

On September 5, 2001, Plaintiffs filed a motion with the Appellate Division to vacate the statutory stay. That same day, Justice Peter Tom of the Appellate Division, First Department granted interim relief by vacating the automatic stay pending final determination of the plaintiffs' motion to vacate the stay in the Appellate Division. The Department opposes the stay granted to plaintiffs by Justice Schlesinger and will continue to argue this in the Appellate Division as well as in the Supreme Court.

However, as a result of Justice Tom's order, the Department's promulgation of the revision to Regulation 68, which became effective September 1, 2001, has been stayed pending a final determination of the matter. Therefore, insurers and self-insurers are to use forms and procedures that ensure compliance with the Regulation that was in effect prior to September 1, 2001.

Very truly yours,

Audrey M. Samers
Deputy Superintendent & General Counsel