OGC Opinion No. 07-02-17
The Office of General Counsel issued the following opinion on February 20, 2007, representing the position of the New York State Insurance Department.
Re: Service of Process on Insurers
May an insurer restrict where it accepts service of process, including requiring service outside of the State of New York?
While an insurer may assign the task of accepting service of process and may establish its own internal procedures for insuring that the service of process is directed to those ultimately responsible for defending its interests, a process server may always serve the corporate personnel specifically identified in N.Y. C.P.L.R. § 311(a) (McKinney 2001). In addition, N.Y. Ins. Law § 1212 (McKinney 2006) requires an authorized insurer to appoint the Superintendent of Insurance as its attorney in this State, upon whom all process in any proceeding on a contract issued in this State may be served. Moreover, N.Y. Ins. Law § 1213 provides for substituted service on the Superintendent of Insurance for unauthorized insurers that, as specified in that section, engage in certain activities in New York.
The inquirer reports that he is a process server whose work mainly consists of service of process on automobile insurance companies regarding No-Fault matters for local law firms. He states that it is his understanding that corporations may be served at any corporate office, especially a local claims office, as long as the papers are served on a responsible individual, such as a manager, secretary, receptionist or claims associate. Several times in recent months an insurer has told him that it does not accept service at the location where he attempted to effectuate service, and stated that service would be accepted only at some other office -- often in another city, or even in another State. He questions whether such insurers are lawfully refusing service of process.
N.Y. C.P.L.R. § 311 (McKinney 2001) sets forth the methods of effecting personal service of process upon a corporation. It provides, in relevant part, as follows:
(a) Personal service upon a corporation . . . shall be made by delivering the summons as follows:
1. [U]pon any domestic or foreign corporation, to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service. A not-for profit corporation may also be served pursuant to section three hundred six or three hundred seven of the not-for-profit corporation law. . .1
Service of process on a corporation, including an insurer, may be effectuated by making personal delivery to any of the corporate representatives set forth in N.Y. C.P.L.R. § 311(a)(1). While an insurer may assign the task of accepting service of process and may establish internal procedures for insuring that the service of process is directed to those ultimately responsible for defending its interests, a process server may always serve the corporate personnel specifically identified in the statute. See Fashion Page, Ltd. v. Zurich Ins. Co. N.Y., 50 N.Y.2d 265, 428 N.Y.S.2d 890, 406 N.E.2d 747 (1980).
The inquirer should also be aware that N.Y. Ins. Law § 1212 (McKinney 2006) requires an authorized insurer to appoint the Superintendent of Insurance as its attorney in this State, upon whom all process in any proceeding brought against the insurer on a contract issued in this State may be served. Section 1212 provides, in relevant part, as follows:
(a) No domestic, foreign or alien insurer, including a fraternal benefit society, shall be or continue to be authorized to do an insurance business in this state unless there shall be filed in the office of the superintendent a power of attorney, executed by such insurer, appointing the superintendent and his successors in office, and authorized deputies, as its true and lawful attorney in and for this state, upon whom all lawful process in any proceeding against it on a contract delivered or issued for delivery, or on a cause of action arising, in this state may be served. Such power of attorney shall be accompanied by the insurer's written certificate of designation of the name and address of the officer, agent, or other person to whom such process shall be forwarded by the superintendent or his deputy. Such designation may be changed by filing of a new certificate of designation in the office of the superintendent.
(b) Service of process upon any such insurer in any proceeding in any court of competent jurisdiction may be made by serving the superintendent, any deputy superintendent, or any salaried employee of the department whom the superintendent designates for such purpose, all of whom shall have authority to accept such service pursuant to any such power of attorney.
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(c) At the time of service of process a fee of forty dollars shall be paid to the superintendent or his deputy.
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(e) Whenever any lawful process shall be served upon the superintendent, any deputy superintendent, or any salaried employee of the department whom the superintendent designates for such purpose under the provisions of this section, such person shall forward a copy of such process by mail, prepaid, directed to the person last designated by such insurer, as shown by the records of the department. (Emphasis supplied).
Thus, service of process may be made upon an authorized insurer by effectuating service on the Superintendent of Insurance or his designee, and by paying the requisite fee of forty dollars at the Department's New York City office located at 25 Beaver Street, 4th Floor, New York, New York 10004 or the Department's Albany office located at One Commerce Plaza, Albany, NY 12257.
N.Y. Ins. Law § 1213(b) (McKinney 2006) provides for substituted service on the Superintendent of Insurance or his designee as agent for unauthorized insurers that, as specified in that section, engage in certain activities in New York.2 Service of process on an unauthorized insurer may also be made by serving any person who engages in such activities on behalf of the unauthorized insurer.
Please note that Section 1213(e) provides an exemption for proceedings against unauthorized foreign or alien insurers arising out of insurance contracts effectuated through a licensed broker under N.Y. Ins. Law § 2117 (b) or (c) (McKinney 2006), or through an excess line broker under N.Y. Ins. Law § 2105 (McKinney 2006 and Supp. 2007), where the insurance contracts contain a provision appointing the Superintendent of Insurance as agent for service of process for actions arising out of those contracts. In addition, Section 27.16 of N.Y. Comp. Codes R & Regs. tit. 11, Part 27 (Regulation 41), prohibits excess line brokers from placing coverage with an unauthorized insurer unless the insurer appoints the Superintendent as its agent for service of process.
For further information you may contact Associate Attorney Pascale Jean-Baptiste at the New York City Office.
1 See also N.Y. C.P.L.R. Art. 3 (McKinney 2001 and Supp. 2007) (regarding effectuating service of process upon other types of business entities).
2 Ins. Law § 1213(b)(1) provides as follows:
(b)(1) Any of the following acts in this state, effected by mail or otherwise, by an unauthorized foreign or alien insurer:
(A) the issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business therein,
(B) the solicitation of applications for such contracts,
(C) the collection of premiums, membership fees, assessments or other considerations for such contracts, or
(D) any other transaction of business,
is equivalent to and constitutes its appointment of the superintendent, and his successors in office, to be its true and lawful attorney upon whom may be served all lawful process in any proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contract of insurance, and shall signify its agreement that such service of process is of the same legal force and validity as personal service of process in this state upon such insurer.