N.Y. Comp. Codes R. & Regs. tit. 11 § 65-4.2

Current through Register Vol. 46, No. 16, April 17, 2024

Section 65-4.2 - Initiation of optional arbitration procedures under section 5106(b) of the insurance law for arbitrations filed with an organization designated by the superintendent on and after december 1, 1999

(a) Administration by an organization designated by the superintendent.

(1) Section 5106 of the Insurance Law requires that the Superintendent of Insurance promulgate simplified procedures for the resolution by arbitration of no-fault disputes.

(2) Chapter 892 of the Laws of 1977 provides for the establishment of revised optional arbitration systems for the resolution of no-fault disputes. These changed procedures for the administration of the arbitration system provide for initial review of all arbitration requests by an organization designated by the superintendent. The designated organization, acting on behalf of the superintendent, is authorized to receive, attempt to conciliate and forward to arbitration all requests for arbitration that it cannot conciliate.

(3) All optional arbitrations pursuant to section 5106(b) of the Insurance Law will be administered by an organization designated by the superintendent.

(4) No-fault optional arbitration advisory committee. The superintendent shall select an advisory committee composed of 12 members to review the operations and the actual costs of the optional arbitration procedures set forth in this Subpart. Not more than four of the members of the advisory committee shall be representatives of self-insurers.

(5) Oversight. The superintendent shall oversee the operation procedures of the designated organization with respect to the administration of the optional arbitration process. Such oversight shall include, but not be limited to, access to all systems, databases, and records related to the optional arbitration process. In addition, the designated organization shall make reports to the superintendent in whatever form the superintendent shall prescribe.

(b) Procedures.

(1) Initiation of arbitration.

(i) An applicant for benefits may initiate arbitration proceedings by mailing a copy of the denial of claim form prescribed by section 65-3.4(c)(11) of this Part, upon which the applicant has entered the reason(s) for contesting the denial, together with a detailed listing and calculation of all incurred expenses in dispute, indicating the dates upon which the claims for incurred expenses were submitted to the insurer, to the address designated on the denial of claim form.

(ii) If there is a dispute with respect to any matter which is arbitrable pursuant to section 5106 of the Insurance Law and a denial of claim form has not been issued, the applicant may initiate arbitration by completing a no-fault arbitration request form and forwarding the original and one copy to the designated organization at the address designated on the form, and one copy to the insurer against which arbitration is being requested. The no-fault arbitration request form shall be prescribed by the designated organization and approved by the superintendent.

(iii) The denial of claim form or the arbitration request form shall be accompanied by a check or money order for $40 payable to the designated organization. This filing fee shall be returned to the applicant directly by the insurer, if the applicant prevails in whole or in part.

(iv) As a condition precedent to arbitration where there is no denial of claim by an insurer, evidence of attempts to settle the dispute must be detailed on the arbitration request form.

(v) In the absence of a denial of claim form, a dispute shall be considered arbitrable if the claim is overdue as described in section 65-3.8(a)(1) of this Part and a demonstrable attempt was made by the applicant to obtain payment or an explanation from the insurer of the continued nonpayment of the claim.

(vi) All items on the no-fault arbitration request form must be completed in full. An explanation must be provided for any omitted spaces on the form, which may be obtained, upon request, from the designated organization by writing to the address designated on the denial of claim form (NYS form NF-10), which is included in Appendix 13 of this Title.

(2) Initial review by the conciliation center.

(i) The designated organization shall establish a conciliation center, which shall review all requests for arbitration and assign file numbers thereto, which shall be used by the designated organization and the parties to identify the case.

(ii) Each insurer shall designate, for each claims office used by the insurer to handle New York no-fault claims, a responsible staff member whom the conciliation center can contact to determine whether the no-fault dispute for which arbitration has been requested can be resolved without the need for arbitration. Since conciliation staff will attempt to resolve the dispute by telephone, facsimile, e-mail, or other appropriate means, the insurer's designated representative shall have the authority to bind the insurer to any agreement reached. The insurer shall notify the conciliation center of the designated representative in writing and immediately notify the conciliation center of any change in such designation.

(iii) If it appears, after review, that the dispute may be resolved without arbitration, the conciliation center will communicate with the parties and attempt through conciliation to resolve the dispute.

(a) If all the issues in dispute are resolved through the designated organization's conciliation, by the insurer agreeing to pay and the applicant agreeing to accept all or a portion of the amount in dispute, the insurer shall, in addition, return the filing fee to the applicant. If the claim was overdue, the insurer shall also pay the applicable interest.

(b) If the arbitration was initiated by use of a no-fault arbitration request form and it is subsequently established that the claim and any applicable interest and attorney fees were paid at least 20 calendar days prior to the submission of the completed arbitration request form, the filing fee shall not be returned to the applicant. In such instance, an additional $100 service and processing fee shall be payable by the applicant to the designated organization.

(iv) If it appears to the conciliation center that the dispute cannot be resolved through conciliation within 60 calendar days, the conciliation center will refer the request for arbitration as prescribed in this section and the parties shall be so advised. The conciliation center may, however, withhold such referral pending receipt from the applicant of pertinent and available information that has been requested.

(3) Submission of documents.

(i) The applicant shall submit all documents supporting the applicant's position along with their request for arbitration. All such documents shall also be simultaneously submitted to the respondent. Following this original submission of documents, no additional documents may be submitted by the applicant other than bills or claims for ongoing benefits.

(ii) The designated organization shall, no later than five business days after receipt of the arbitration request, advise the respondent of such receipt. The respondent shall, within 30 calendar days after the mailing of such advice, provide all documents supporting its position on the disputed matter. Such documents shall be submitted to the applicant at the same time. The respondent may, in writing, request that the designated organization provide an additional 30 calendar days to respond based upon reasonable circumstances that prevent it from complying.

(iii) The written record shall be closed upon receipt of the respondent's submission or the expiration of the period for receipt of the respondent's submission. Documents submitted by either party after the record is closed shall be marked "Late."

(iv) Any additional written submissions may be made only at the request or with the approval of the arbitrator.

(v) The provisions of this paragraph shall take effect with all arbitrations filed on and after March 1, 2002.

(4) Prior to transmittal to arbitration, the insurer may make a non-binding written offer to resolve the dispute. Such offer, if not accepted by the applicant, shall be transmitted to the arbitration forum, but shall not be disclosed to the arbitrator. The parties to the dispute shall also not disclose the offer to the arbitrator.

(5) All disputes remaining after expiration of the conciliation period shall be forwarded for arbitration.

(c) Financing.

(1) The cost of administering the conciliation function, reduced by any fees collected, shall be paid annually by insurers (including self-insurers and MVAIC) to the designated organization upon receipt of a statement therefrom. This cost shall be distributed among insurers in an equitable manner approved by the Superintendent of Insurance. This distribution shall, to the extent practicable, be a function of the degree to which an insurer is named as a respondent in conciliation proceedings of the designated organization.

(2) Semiannually, commencing December 1, 1999 and continuing every six months thereafter, the designated organization shall prepare an estimate of the expenses expected to be incurred for the operation of the conciliation function during the subsequent six-month period. The projected cost of the conciliation function shall be assessed on a proportionate basis to those insurers named as respondents in the preceding calendar year and shall be subject to the approval of the superintendent. The designated organization shall send to each applicable insurer a bill for the amount due and any payment due shall be made to the designated organization within 30 days after billing date.

(3) On an annual basis, as of December 31st of each year, the designated organization shall prepare a detailed analysis of the actual costs incurred for the operation of the conciliation function. This analysis shall be forwarded to the no-fault optional arbitration advisory committee and the superintendent on or before April 30th of each year. The no-fault optional arbitration advisory committee shall notify the designated organization and the superintendent whether it accepts or rejects the designated organization's cost analysis in whole or in part. In the event that the designated organization and the no-fault optional arbitration advisory committee cannot resolve any differences that may exist, such differences will be referred to the superintendent for resolution. The superintendent's decision shall be binding on the designated organization and insurers.

(4) Once the designated organization submits a final cost analysis that has either been approved by the no-fault optional arbitration advisory committee or resolved by the superintendent in the event of a dispute, the designated organization shall send to each applicable insurer an accounting of the actual assessment. Any adjustment shall be made to the bill for the subsequent estimated assessment, as illustrated by the following example:

Example:

(1) Total conciliation cases closed during year 30,000

Example:(2) Cases in which insurer A was named as a respondent in the conciliation proceeding 1,250

Example:(3) Insurer A's assessment percentage = (2)/(1) 4.167%

Example:(4) Actual expenses of the conciliation function reduced by amounts received through fees collected $2,500,000

Example:(5) Insurer A's actual expense = (3)*(4) $104,175

Example:(6) Insurer A's estimated assessment $102,000

Example:(7) Insurer A's debit or (credit) = (5)-(6) $2,175

N.Y. Comp. Codes R. & Regs. Tit. 11 § 65-4.2