The Office of General Counsel issued the following opinion on December 8, 2005 representing the position of the New York State Insurance Department.
Re: Accident Prevention Course Discount.
Is an insurer required to provide the mandatory reduction in premium charges pursuant to N.Y. Ins. Law § 2336 to an automobile policyholder who has taken an accident prevention course in a state other than New York through the National Safety Council where such course has not been approved by the New York State Department of Motor Vehicles?
No, pursuant to N.Y. Vehicle & Traffic Law § 399-c (LEXIS 2005) only those policyholders who take an accident prevention course that has been approved by the New York State Department of Motor Vehicles are eligible for the mandatory reduction in premium charges provided for in N.Y. Ins. Law § 2336(a) (McKinney Supp. 2005).
The inquirer has asked us on behalf of the New York Automobile Insurance Plan whether the current rules that require carriers to provide a 10% credit to policyholders who submit evidence of their successful completion of any motor vehicle accident prevention course approved by the New York Department of Motor Vehicles are in compliance with the Insurance Law in light of the specific language contained within N.Y. Ins. Law § 2336(a) (McKinney Supp. 2005). More specifically, the inquirer asked whether N.Y. Ins. Law § 2336(a) requires the discount for an accident prevention course provided through the National Safety Council but given outside New York and not approved by the New York Department of Motor Vehicles ("DMV").
N.Y. Ins. Law § 2336 (a) (McKinney Supp. 2005), derived from former N.Y. Ins. Law § 176(7) as added by Chapter 685 of the Laws of 1979 and subsequently amended, provides as follows:
Any schedule of rates or rating plan for motor vehicle liability and collision insurance submitted to the superintendent shall provide for an appropriate reduction in premium charges for any insured for a three year period after successfully completing a motor vehicle accident prevention course, known as the national safety council's defensive driving course, or any driver improvement course approved by the department of motor vehicles as being equivalent to the national safety council's defensive driving course, provided that in either event there shall be no reduction in premiums for a self instruction defensive driving course or a course which does not provide for actual classroom instruction for a minimum number of hours as determined by the department of motor vehicles. Such reduction in premium charges shall be subsequently modified to the extent appropriate, based upon analysis of loss experience statistics and other relevant factors. All such accident prevention courses shall be monitored by the department of motor vehicles and shall include components of instruction in "Road Rage" awareness and in "Work Zone Safety" awareness as defined by the commissioner of motor vehicles. The provisions of this section shall not apply to attendance at a program pursuant to article twenty-one of the vehicle and traffic law as a result of any traffic infraction.
In Department Circular Letter No. 1 (1980), the Department stated the following were acceptable accident prevention courses:
(a) the Defensive Driving Course administered by the National Safety Council and monitored by the New York Department of Motor Vehicles (D.M.V.); [or] b) any other accident prevention course which is approved by the D.M.V. as at least equivalent to the Defensive Driving Course, and which is monitored by the D.M.V.
In the Second Amendment to Department Circular Letter No. 1 (1980) the Department stated the following:
Manual rules, concerning the discount, which presently single out the National Safety Council's Defensive Driving Course or any other specific accident prevention course should be amended (unless all D.M.V. approved courses are named). It is recommended that the amended rule state that the discount is available if the principal operator of the motor vehicle has successfully completed any motor vehicle accident prevention course approved by the Department of Motor Vehicles pursuant to Section 176(7) of the Insurance Law [now Section 2336(a)].
Subsequently, N.Y. Vehicle & Traffic Law § 399-c (LEXIS 2005), added by Chapter 290 of the Laws of 1998 which added a new Article 12B to the Vehicle & Traffic Law, provides as follows:
The commissioner [of the Department of Motor Vehicles] must approve an accident prevention course before any person attending and successfully completing such course may qualify to receive mandatory insurance reduction benefits in accordance with subsection (a) of section two thousand three hundred thirty-six of the insurance law. The commissioner shall base the decision to approve a course upon the requirements set forth in this article and any additional requirements as the commissioner deems necessary.
Accordingly, pursuant to N.Y. Vehicle & Traffic Law § 399-c, in order for an insured to obtain the mandatory reduction in premium charges pursuant to N.Y. Ins. Law § 2336, to an automobile policyholder who has taken an accident prevention course, the course must have been approved by the DMV. Whether the DMV has or would approve a particular National Safety Council Defensive Driving Course offered in another state is a matter within the jurisdiction of the DMV and therefore, we offer no opinion on that matter.
Therefore, the current rule of the New York Automobile Insurance Plan requiring that the premium reduction be given only to policyholders who attend an accident prevention course approved by the DMV is in compliance with the Insurance Law.
Finally, in the inquirer's letter, dated November 17, 2005, the inquirer questioned why Department Circular Letter No. 19 (2005) lists approved course sponsors rather than approved courses. Please note that N.Y. Vehicle & Traffic Law § 399-b(1) defines as "sponsoring agency" as ". . . an organization which owns a motor vehicle accident prevention course approved by the commissioner [of the Department of Motor Vehicles]."
For further information you may contact Assistant Counsel Brenda M. Gibbs at the Albany Office.