The Office of General Counsel issued the following informal opinion on August 11, 2000, representing the position of the New York State Insurance Department.

RE: Superintendent’s Authority Regarding Consumer Complaints

Question Presented:

What is the New York Superintendent of Insurance’s authority to issue administrative sanctions, other than revocation of and refusal to renew licenses?


The Superintendent, after providing notice and an opportunity to be heard, has explicit statutory authority to impose fines and penalties. See N.Y. Ins. Law §§ 109, 307, 308, 403, 1102, 1510, 2102, 2117, 2123, 2127, 2133, 2320, 2321, 2324, 2601, 2605, 4226, 4228, 4241, 4413, 4504,7614, 7910, 9109 and Art. 24 (McKinney 1985 & Supp. 2000). See also N.Y. Comp. Codes R. & Regs. tit. 11B, §216.7 (d) (1999).


With respect to the Superintendent’s authority to direct insurers to take specific action to resolve consumer complaints, when a "person" has committed a "defined violation", as those terms are defined in N.Y. Ins. Law § 2402 (McKinney 1985 & Supp. 2000), the Superintendent, after providing notice and an opportunity to be heard, may serve a cease and desist order upon the person. In a case involving a "determined violation", as defined in N.Y. Ins. Law § 2402 (McKinney 1985), the Superintendent, after affording notice and an opportunity to be heard, may, through the Attorney General, bring an action to enjoin the person from engaging in such determined violation.

N.Y. Ins. Law § 2601 (McKinney 1985 & Supp. 2000) prohibits an insurer from engaging in unfair claim settlement practices. In order to constitute an unfair claim settlement practice under this section, the insurer’s acts must be committed without just cause and with such frequency as to indicate a general business practice. Unfair claim settlement practices are defined violations and consequently, after notice and an opportunity to be heard, the insurer can be ordered to cease and desist such practices. As part of the order, the Superintendent has the authority to require the settlement of claims and the refund of premiums. Unlike unfair claims settlement practices cases, the Superintendent cannot require settlement of the claim or return of premium in a factual dispute between an individual claimant and an insurer.

For further information you may contact Associate Attorney Joan Siegel at the New York City Office.