The Office of General Counsel issued the following opinion on June 21, 2005, representing the position of the New York State Insurance Department.

Re: Underwriting Questionnaires: Usage by New York Automobile Insurance Plan ("NYAIP") Insurers to Underwrite NYAIP Insureds

Question Presented:

May an insurer require a New York Automobile Insurance Plan ("NYAIP") insured to complete an underwriting questionnaire?


Pursuant to Section 18(2)(9) of the NYAIP Rules, an insurer may conduct an underwriting review and require a NYAIP insured to supply pertinent underwriting information that has a direct bearing on the rating of a policy.


The inquirer states that several insurers have been requiring NYAIP insureds to complete underwriting questionnaires in order to maintain their insurance coverage. The inquirer deems such questionnaire to be excessive and unnecessary. However, the inquirer states that such insurers do not require insureds that are voluntarily written to complete such underwriting questionnaire as part of the underwriting process.


The inquirer asks whether an insurer under the plan may require only its NYAIP insureds to complete an underwriting questionnaire. As a general rule, an insurer is free to select risks and make inquiry into matters that it deems material to a risk. See Vander Veer v. Continental Ins. Co., 34 N.Y.2d 50, 52 (1974); Health Ins. Ass’n v. Corcoran, 154 A.D.2d 61, 67 (3rd Dept. 1990). In terms of NYAIP business, insurers are governed by NYAIP Rules. Specifically, Section 18(2)(9) of the NYAIP Rules provides, in pertinent part, as follows:

2. Cancellation by Insurer

An insurer which has issued a policy or binder under this Plan shall have the right to cancel the entire insurance policy by giving notice in accordance with §313 for private passenger and commercial vehicles other than for-hire vehicles and § 370 for for-hire vehicles of the New York Vehicle and Traffic Law as required in the policy or binder if the insured:


(9) (a) cannot be located by the company, for the purpose of its underwriting review;

(b) fails to respond to at least two written requests for pertinent underwriting information, which would have a direct bearing on the rating of a policy. For purposes of this provision, a second written request for pertinent underwriting information shall be mailed no earlier than 10 days after the mailing of the first request; a Notice of Cancellation shall be mailed no earlier than 10 days after the mailing of a second request….

Pursuant to Section 18(2)(9) above, an insurer under the Plan is permitted to perform underwriting reviews of its NYAIP insureds. The Rules permit an insurer to request, from an insured, pertinent underwriting information that would have a direct bearing on the rating of the policy. The insurer may cancel the policy if the insured cannot be located or fails to respond to at least two written requests for such information.1 An insurer may not, however, request irrelevant or immaterial information that has no direct bearing on the rating of a policy. In addition, an insurer may not use a questionnaire to unduly burden or harass an insured. The Department would deem such practice by an insurer to be a violation of Article 24 of the Insurance Law as an unfair or deceptive act or practice. Also, an insurer would violate Article 26 of the Insurance Law if it discriminates on the basis of, among other things, race, color, creed, national origin, or disability.2

The inquirer noted in the inquiry that several insurers have been using these underwriting questionnaires. To the extent that the inquirer believes that such insurers are using these questionnaires to, among other things, harass or unduly burden its NYAIP insureds, we have asked that the inquirer supply our Consumer Services Bureau with the names of such insurers, as well as copies of the questionnaires they use.

For further information please contact Associate Attorney D. Monica Marsh at the New York City Office.

1  Under Section 19 of the NYAIP Rules, an insured has the right of review and appeal of, among other things, cancellation of his/her insurance. That Section provides, in pertinent part, as follows:

An applicant denied insurance, or an insured given notice of cancellation of insurance under Section 18.2 of this Plan, may request that such action be reviewed by the Governing Committee provided such review is received by the Plan or complaint regarding such denial of insurance or cancellation of insurance is received at the State of New York Insurance Department within one year from the date of denial of insurance or the effective date of cancellation.

2   But see N.Y. Ins. Law 2606(d) (McKinney 2000) for example, which, in relation to disability, provides that an insurer may establish selection criteria on the basis of disability where the insurer can prove that its decision is based on sound underwriting and actuarial principles reasonably related to actual or anticipated loss experience.  See also, N.Y. Ins. Law §§ 2324 and 4224 (McKinney 2000).