The Office of General Counsel issued the following opinion on October 21, 2005, representing the position of the New York State Insurance Department.
Re: The City of New York's Exemption from the Motor Vehicle Financial Security Act
Is the NYC Department of Juvenile Justice exempt from N.Y. Veh. & Traf. Law Art. 6 (McKinney 1996 & Supp. 2005), commonly known as the Motor Vehicle Financial Security Act?
Based on our reading of N.Y. Veh. & Traf. Law Art. 6 (McKinney 1996 & Supp. 2005), commonly known as the Motor Vehicle Financial Security Act, the NYC Department of Juvenile Justice is exempt therefrom pursuant to N.Y. Veh. & Traf. Law § 321 (McKinney 1996).
An inquiry was submitted on behalf of the Department of Juvenile Justice, an agency of the City of New York. It was inquired as to whether the agency is exempt from the proof of financial security requirements contained in the New York Vehicle and Traffic Law.
Generally speaking, a motor vehicle owner must provide proof of financial security when registering the vehicle in New York pursuant to N.Y. Veh. & Traf. Law Art. 6. However, there are certain exceptions that apply, as stated in N.Y. Veh. & Traf. Law § 321 (McKinney 1996), which provides:
1. This article shall not apply to any motor vehicle for the operation of which security is required to be furnished under section three hundred seventy of this chapter, including those for which a certificate is issued pursuant to section three hundred seventy-one of this chapter or under a similar law in another state except as may be provided in section three hundred seventy; to any motor vehicle operated under a permit or a certificate of convenience and necessity issued pursuant to the transportation law, or under a permit or certificate issued by the public utility regulatory agency of another state; nor to any vehicle for which a permit or certificate is in force pursuant to the interstate commerce act nor to any motor vehicle owned by the United States, any state or any political subdivisions of any state.
2. Provided, however, that any motor vehicle exempted in subdivision one of this section from the provisions of any portion of this article shall be subject to the provisions of article fifty-one of the insurance law.
It appears to us that as an agency of the City of New York, the Department of Juvenile Justice is a political subdivision of the State of New York and is thus exempt from the proof of financial security requirements contained in N.Y. Veh. & Traf. Law Art. 6 (McKinney 1996 & Supp. 2005), commonly known as the Motor Vehicle Financial Security Act. See also Nassau Ins. Co. v. Guarascio, 82 A.D.2d 505, 442 N.Y.S.2d 83 (2nd Dept 1981).
However, it would be best for to contact the Department of Motor Vehicles for its interpretation of the statute as it is the agency established to enforce the Vehicle and Traffic Law.
Please note, however, that N.Y. Insurance Law Article 51, commonly known as the "No-Fault Law," applies to all municipalities and city agencies and there is no exemption therefrom.
For further information you may contact Associate Attorney Sally Geisel at the New York City Office.