Subpart 65-1
Prescribed Policy Endorsements
Subpart
65-2
Rights and Liabilities of Self-insurers
Subpart 65-3
Claims for Personal Injury Protection benefits
Subpart 65-4
Arbitration
NEW YORK STATE - INSURANCE DEPARTMENT
REGULATION NO. 68 -
(11 NYCRR 65)
REGULATIONS IMPLEMENTING THE COMPREHENSIVE
MOTOR VEHICLE INSURANCE REPARATIONS ACT
11
NYCRR 65-4 (Regulation 68-D)
Arbitration
65-4.1
Applicability of arbitration procedures under Article 51 of the
Insurance Law.
This subpart shall apply
to insurers, and the term insurer, as used in this subpart, shall
include both insurers and self-insurers, as those terms are defined in
this Part and article 51 of the Insurance Law, and shall also include
the Motor Vehicle Accident Indemnification Corporation (MVAIC) created
pursuant to article 52 of the Insurance Law and any company or
corporation providing insurance pursuant to section 5103(g) of the
Insurance Law.
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 subdivision
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 thereto 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 the 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 must
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 |
|
(2) Cases in which Insurer A was named as a respondent in
theconciliation proceeding
|
1,250 |
| (3) Insurer A's Assessment Percentage
= (2)/(1) |
4.167% |
|
(4) Actual Expenses of the conciliation function reduced by
amounts received through fees collected
|
$2,500,000 |
| (5) Insurer A's actual expense =
(3)*(4) |
$104,175 |
(6) Insurer A's Estimated Assessment
|
$102,000 |
| (7) Insurer A's Debit or (Credit) =
(5)-(6) |
$2,175 |
65-4.3
Jurisdiction of arbitration forums.
(a)
Insurance Department Arbitration (IDA) forum. IDA jurisdiction
shall be limited to requests for No-Fault arbitration filed prior to
December 1, 1999 and shall include only those disputes where the
remaining issues after the expiration of the conciliation period
involve:
(1)
correct computation of health service provider fees, whether or not such
fees are specifically covered by the fee schedules promulgated in Part
68 of this Title (Regulation 83);
(2)
where the amount in dispute is less than $400 and such dispute does not
involve a coverage question or affect the outcome of any other portion
of the applicant’s claim; or
(3)
whether the claim was overdue at the time it was paid, how long the
claim was overdue, or whether the correct amount of interest or
attorney’s fee on an overdue claim was paid.
(b)
No-Fault Arbitration forum. All disputes remaining after expiration of
the conciliation period, involving issues other than those to be
resolved pursuant to subdivision (a) of this section, shall be forwarded
to the No-Fault Arbitration forum which shall be the forum for their
resolution.
(c)
Where a request for arbitration involves issues which fall within the
jurisdiction of both of the forums specified in this paragraph, the
dispute shall be resolved by the No-Fault Arbitration forum, except
disputes specified in paragraph (a)(1) of this section and filed prior
to December 1, 1999 shall be resolved by IDA arbitration.
65-4.4
Insurance Department Arbitration (IDA) forum procedure.
(a)
Notice. If the dispute is subject to IDA arbitration, the parties will
be notified by the IDA, in writing, that the dispute will be resolved by
arbitration on the basis of written submissions of the parties.
All such submissions shall be received by the IDA within 30 calendar
days of the date of mailing of the notice. No oral arguments will
be permitted. In order to facilitate receipt of evidence by IDA,
the parties may forward their submissions prior to receipt of the above
notification.
(b)
Consolidation. The IDA may consolidate disputes if the claims arose out
of the same accident and involve common issues of fact.
(c)
Designation of arbitrators. The arbitrator shall be a senior member of
the Insurance Department staff designated by the superintendent to serve
as an IDA arbitrator and shall not be the same person who attempted to
conciliate the dispute.
(d)
Qualifications of the arbitrator. Every IDA arbitrator shall be an
examiner who regularly administers article 51 of the Insurance Law or an
attorney. If the issue in dispute includes a request for an
additional attorney’s fee pursuant to section 65-4.6 of this subpart,
the IDA arbitrator shall be an attorney. No person shall serve as an
arbitrator in any arbitration in which such person has any financial or
personal interest. An arbitrator shall disclose to the IDA any
circumstance which is likely to create an appearance of bias or which
might disqualify such arbitrator. Upon receipt of such information, the
IDA shall immediately disclose it to the parties. If a party challenges
an arbitrator, the specific grounds for the challenge shall be submitted
in writing to the superintendent. The superintendent shall determine
whether the arbitrator should be disqualified and shall inform the
parties of that determination, which shall be conclusive. If an
arbitrator should resign, be disqualified or be otherwise unable to
perform necessary duties, the superintendent shall designate another
arbitrator to resolve the dispute.
(e)
Evidence. The arbitrator shall be the judge of the relevancy and
materiality of the evidence offered and strict conformity to legal rules
of evidence shall not be necessary. The arbitrator may subpoena
documents upon the arbitrator’s own initiative or upon the request of
any party when the issues to be resolved require such documents. Copies
of all documents submitted to the arbitrator shall be simultaneously
transmitted to the other parties. The arbitrator may raise any
issue that the arbitrator deems relevant to making an award that is
consistent with the Insurance Law and Department regulations.
(f)
Form and scope of award. The award, which shall be in writing and signed
by the arbitrator, shall state the issues in dispute and contain the
arbitrator’s findings, conclusions and decision based on the Insurance
Law and Insurance Department regulations. In the event that the
applicant prevails in whole or in part on the claim, the arbitrator
shall also direct the insurer to:
(1)
reimburse the applicant for the amount of the filing fee paid, unless
the filing fee had already been returned to the applicant;
(2)
if due under section 5106 of the Insurance Law, pay a reasonable
attorney’s fee in accordance with the limitations set forth in section
65-4.6 of this subpart; and
(3)
in an award of interest, the arbitrator shall compute the amount due for
each element of first-party benefits in dispute, commencing 30 days
after proof of claim therefor was received by the insurer and ending
with the day of payment of the award, subject to the provisions of
subdivisions (c) and (d) of section 65-3.9 of this Part (stay of
interest).
(g)
Time of award. The award shall be issued no later than 30 calendar days
from the final date submissions must be received. Failure to adhere to
the prescribed time limit shall not nullify the award.
(h)
Delivery of award to parties. The award shall be transmitted to the
parties, which shall accept as delivery of the award the placing of the
award or a true copy thereof, in the mail, addressed to the parties and
their designated representatives at their last known addresses, or by
any other form of service permitted by law. The IDA shall note on such
award or transmittal letter thereof the date of mailing, and keep a
record of same.
(i)
Interpretation and application of procedures. The arbitrator shall
interpret and apply these procedures insofar as they relate to the
arbitrator’s powers and duties. All other procedures shall be
administered by the Insurance Department.
(j)
Payment of award. Insurers shall, within 30 calendar days of the date of
mailing of the award, either pay the amounts set forth in the award or,
where grounds exist, appeal to the master arbitrator as provided for in
this Part, which appeal shall stay payment of the award. The award need
not be confirmed into judgment.
(k)
Financing. The Insurance Department shall bill the insurer the sum of
$100 whenever the applicant prevails in whole or in part on the disputed
claim. Such fee shall be payable within 30 days after the billing date
and shall be utilized to defray the operating expenses of the
department.
65-4.5
No-Fault Arbitration forum procedure.
(a)
Notice. If a dispute has been transmitted for arbitration by the
Insurance Department or the conciliation center, the parties will be
notified by the designated organization, in writing, that the dispute
will be resolved by arbitration. At the arbitrator’s discretion,
if the dispute involves an amount less than $2,000, the parties shall be
notified that the dispute shall be resolved on the basis of written
submissions of the parties. All such submissions shall be received
by the designated organization within 30 calendar days of the date of
mailing of the notice. No oral arguments will be permitted, unless
the arbitrator determines that additional evidence or testimony is
necessary. In order to facilitate receipt of evidence by the
designated organization, the parties may forward their submissions prior
to receipt of the above notification.
(b)
Special Expedited Arbitration.
(1)
Special Expedited Arbitration shall be available for disputes involving
the failure to submit notice of claim within 30 calendar days after the
accident and where it has been determined by the insurer that reasonable
justification for late notice has not been established.
(2)
An applicant may request Special Expedited Arbitration for resolution of
the dispute involving late notice within 30 calendar days after mailing
of the denial of claim by the insurer stating that reasonable
justification for late notice has not been established. At the
time of such request, the applicant shall make a complete submission
supporting his or her position. No further submissions shall be
accepted unless requested by the arbitrator.
(3)
Applications for Special Expedited Arbitration shall be submitted to the
Conciliation Center of the designated organization and shall comply with
the requirements for initiation of arbitration contained in paragraph
65-4.2(b)(1) of this Subpart.
(4)
The applicant’s submission shall be forwarded by the Conciliation
Center to the insurer within 3 business days of receipt. The insurer may
provide the Center with reasonable special mailing or transmittal
instructions to facilitate the processing of these arbitration requests.
(5)
The insurer shall respond in writing to the applicant’s submission
within 10 business days after the mailing by the Center. No further
submissions shall be accepted unless requested by the arbitrator.
(6)
The dispute shall be resolved solely upon the basis of written
submissions unless the arbitrator concludes that the issues in dispute
require an oral hearing.
(7)
The arbitrator shall issue a written decision within 10 business days
after receipt of all written submissions from the parties or at the
conclusion of an oral hearing.
(8)
For the purpose of Special Expedited Arbitration, the superintendent may
appoint arbitrators, qualified in accordance with the provisions of this
section, to serve on a per diem basis. Such arbitrators shall contract
with the designated organization. The rate of per diem
compensation shall be determined by the designated organization, after
consultation with the No-Fault Arbitrator Screening Committee subject to
the approval of the Superintendent. Such arbitrators shall be
independent contractors, and shall not be employees or agents of the
designated organization or the Insurance Department.
(c)
Consolidation. The designated organization shall, except where
impracticable, consolidate disputes for which a request for arbitration
has been received, if the claims involved arose out of the same accident
and involve common issues of fact.
(d)
Qualifications of arbitrators for a hearing held in New York State.
(1)
No-Fault Arbitrator Screening Committee. The superintendent shall
appoint an advisory committee composed of six members, who will review
the qualifications of applicants for the position of no-fault arbitrator
for hearings to be held in New York State and review the performance of
the appointed arbitrators. The screening committee shall make
recommendations to the superintendent pertaining to the appointment and
dismissal of no-fault arbitrators. The committee shall consist of
one representative of the New York State Bar Association, one
representative of the New York State Trial Lawyer’s Association, two
representatives of the insurance industry selected by the No-Fault
Optional Arbitration Advisory Committee, a nonvoting representative of
the designated organization and a nonvoting representative of the
Insurance Department. Tie votes shall be reported as such to the
superintendent.
(2) A
no-fault arbitrator shall be an attorney, licensed to practice law in
New York State, with at least 5 years’ experience which the No-Fault
Arbitrator Screening Committee has determined qualifies such attorney to
review and resolve the issues involved in no-fault insurance disputes.
Documentation of such experience shall be submitted to, and reviewed by,
the superintendent prior to the appointment of an arbitrator.
(3)
All no-fault arbitrators shall be appointed by, and serve at the
pleasure of, the superintendent. An arbitrator candidate shall disclose
to the superintendent any circumstance, which is likely to create an
appearance of bias, or which might disqualify such person as an
arbitrator, and the superintendent shall determine whether the candidate
should be disqualified. The superintendent shall forward the name of all
no-fault arbitrators to the designated organization, and promptly inform
the designated organization of all additions to, and deletions from, the
panel.
(4)
No person shall, during the period of appointment as an arbitrator, have
any practice or professional connection with any firm or insurer
involved in any degree with automobile insurance or negligence law. The
No-Fault Arbitrator Screening Committee, subject to the approval of the
superintendent, shall establish any additional qualifications for
appointment as a no-fault arbitrator.
(e)
Qualifications of arbitrators for a hearing held outside New York State.
For a hearing which will be held outside New York State, the arbitrator
shall be a licensed attorney in the State or Canadian province where the
hearing is held.
(f)
Designation of arbitrator. The designated organization shall assign an
arbitrator who will hear the case, and shall submit the name of the
arbitrator to each party to the arbitration. The designated organization
shall maintain a file containing the professional background of each
of its no-fault arbitrators, and the information contained therein shall
be available to any party to the arbitration upon written or oral
request.
(g)
Conflict of interest and disqualification of arbitrator. No person shall
serve as an arbitrator in any arbitration in which such person has any
financial or personal interest or bias. If a party challenges an
arbitrator, the specific grounds for the challenge shall be submitted in
writing to the designated organization, which shall determine, in
consultation with the Insurance Department, within 15 calendar days
after receipt of the challenge, whether the arbitrator shall be
disqualified. Such written determination, in a format approved by the
Department, shall be final and binding. If an arbitrator should resign,
be disqualified or be otherwise unable to perform necessary duties, the
designated organization shall assign another arbitrator to the
case.
(h)
Oaths. Arbitrators shall take an annual oath of office.
Arbitrators shall require all witnesses to testify under oath or affirm
that their statements are true under the penalties of perjury.
(i)
Time and place of arbitration.
(1)
The arbitration hearing shall be held in the arbitrator’s office or
any other appropriate place selected by the designated organization and,
to the extent practicable, within the general locale of the
applicant’s residence but, in no event, more than 100 miles from such
residence. The arbitrator shall fix the time and place for such
hearing. At least 15 calendar days prior to the hearing, the
designated organization shall mail a notice of hearing to each party.
Unless otherwise agreed by the parties, the hearing shall be scheduled
to be held within 30 calendar days of the date of the appointment of the
arbitrator. The parties to the arbitration shall not directly contact
the arbitrator at any time prior to or subsequent to the hearing, but
shall direct all communications to the designated organization.
(2)
Effective with arbitrations filed on and after March 1, 2002, if the
applicant requests arbitration within 90 days after the claim became
overdue or within 90 days after receipt of the denial of claim, the
arbitration shall be scheduled for a hearing within 45 days after
transmittal from the conciliation center, when requested by the
applicant.
(j)
Postponements and adjournments. The arbitrator may for good cause
postpone or adjourn the hearing upon request of a party or upon the
arbitrator’s own initiative. Each party may cause one
adjournment without the payment of an adjournment fee, if the
adjournment request is received by the designated organization at
least two business days prior to the scheduled arbitration. There shall
be an adjournment fee of $50 payable to the designated organization by
the party requesting any subsequent adjournment. An adjournment fee of
one hundred dollars ($100) shall be payable to the designated
organization by the party causing any adjournment within two (2)
business days prior to the scheduled hearing. Such fees shall be used to
defray the cost of administration of the arbitration forum.
(k)
Representation at arbitration. Any party shall either represent itself
or be represented by an attorney.
(l)
Record of proceedings. A stenographic record of the arbitration
proceedings shall not be required. However, a party requesting such a
record shall inform the other party or parties of such intent, make the
necessary arrangements, and pay the cost thereof directly to the person
or agency making such record. Any other party or parties to the
arbitration shall be entitled to a copy of such record upon agreeing to
share the cost of the total stenographic expense. Whether or not a
stenographic record of the proceeding is made, the arbitrator shall, at
a minimum, record the exhibits offered by each party and the names and
addresses of all parties and witnesses.
(m)
Interpreters. Any party wishing an interpreter shall make all
arrangements directly with the interpreter and shall assume the costs of
such services.
(n)
Attendance at hearings. Persons having a direct interest in the
arbitration are entitled to attend hearings. It shall be discretionary
with the arbitrator to permit the attendance of any other persons.
(o)
Evidence.
(1)
The arbitrator shall be the judge of the relevance and materiality of
the evidence offered, and strict conformity to legal rules of evidence
shall not be necessary. The arbitrator may question any witness or
party and independently raise any issue that the arbitrator deems
relevant to making an award that is consistent with the Insurance Law
and Department regulations.
(2)
The arbitrator or an attorney of record in the arbitration may subpoena
witnesses or documents upon the arbitrator’s own initiative or upon
the request of any party, when the issues to be resolved require such
witnesses or documents.
(3)
(i)For
arbitrations filed prior to March 1, 2002, copies of all documents to be
submitted to the arbitrator shall be simultaneously transmitted to the
other parties at least seven calendar days prior to the hearing. The
arbitrator shall determine if all parties received such documents prior
to the commencement of the hearing.
(ii)
For arbitrations filed on or after March 1, 2002, the arbitrator shall
determine if the parties provided and exchanged documents in accordance
with the requirements of paragraph (3) of subdivision (b) of section
65-4.2 of this Part.
(4)
If a party to the arbitration intends to introduce an expert witness at
the hearing, the identity of the expert witness must be given to all
parties at least seven calendar days prior to the hearing.
(p)
Arbitration in the absence of a party. The arbitration may proceed in
the absence of any party who, after due notice, fails to be present or
fails to obtain a postponement or adjournment. An award shall not be
made in favor of an appearing party solely on the text_con of another
party. The arbitrator shall require the appearing party to submit such
evidence as may be required for the making of an award. The arbitrator
may require the appearance of a party at the hearing if the arbitrator
determines that the party’s appearance is necessary to realize a fair
and just resolution of the dispute and to afford all parties due
process.
(q)
Reopening of hearing. The hearing may be reopened by the arbitrator, for
good cause, at any time before the award is made.
(r)
Time of award. The award shall be made and delivered no later than 30
calendar days from the date the hearing is completed or 30 days from the
date of the designated organization’s transmittal of the final
documentary proofs to the arbitrator. Failure to adhere to this
time limit shall not nullify the award.
(s)
Form and scope of award. The award shall be in writing in a format
approved by the superintendent. It shall state the issues in dispute and
contain the arbitrator’s findings and conclusions based on the
Insurance Law and Insurance Department regulations. It shall be signed
by the arbitrator and shall be transmitted to the parties by the
designated organization with a copy to the Insurance Department.
The award shall contain a decision on all issues submitted to the
arbitrator by the parties. In the event that the applicant prevails in
whole or in part on the claim, the arbitrator shall also direct the
insurer to:
(1)
reimburse the applicant for the amount of the filing fee paid, unless
the filing fee had already been returned to the applicant;
(2)
if due under section 5106 of the Insurance Law, pay a reasonable
attorney’s fee in accordance with the limitations set forth in section
65-4.6 of this subpart; and
(3)
in an award of interest, compute the amount due for each element of
first-party benefits in dispute, commencing 30 days after proof of claim
therefor was received by the insurer and ending with the date of payment
of the award, subject to the provisions of subdivision 65-3.9(c) of this
Part (stay of interest).
(t) Imposition of costs.
(1)
Effective with arbitrations filed on and after March 1, 2002, the
arbitrator may impose all administrative costs of arbitration to the
applicant or apportion the administrative costs of arbitration between
the parties if the arbitrator concludes that the applicant’s
arbitration request was frivolous, was without factual or legal merit,
or was filed for the purpose of harassing the respondent. Cases in
which arbitrators impose all administrative costs to the applicant shall
be excluded from the assessment calculation contained in paragraph (aa)
of this subdivision.
(2)
The amount of such administrative costs per case shall be established
for each calendar year by the designated organization. The
administrative cost shall be based upon the actual administrative costs
per case in the prior calendar year. Such costs shall be paid to the
designated organization and the receipt of such costs shall be used to
reduce the actual expenses of the designated organization for the
administration of the arbitration forum.
(u)
Award upon settlement.
(1)
If the parties settle their dispute during the course of arbitration,
the arbitrator shall set forth the terms of the agreed settlement in an
award, which shall provide that the parties agree that the settlement is
final and binding and shall not be subject to review by a master
arbitrator or by a court. If an attorney’s fee is due under section
5106 of the Insurance Law, such fee shall be awarded in accordance with
the limitations set forth in section 65-4.6 of this subpart. The award
shall be signed by the arbitrator and shall be transmitted to the
parties by the designated organization, with a copy to the Insurance
Department.
(2)
The insurer shall provide the designated organization with the terms of
settlement for transmittal to the arbitrator no later than thirty
calendar days following the scheduled date of the hearing.
(v)
Delivery of award to parties. The parties shall accept as delivery of
the award the placing of the award or a true copy thereof in the mail,
addressed to the parties or their designated representatives at their
last known addresses, or by any other form of service permitted by law.
The designated organization shall note on such award or transmittal
letter thereof the date of mailing and keep a record of same.
(w)
Interpretation and application of procedures. The arbitrator shall
interpret and apply these procedures insofar as they relate to the
arbitrator’s powers and duties. All other procedures shall be
interpreted by the designated organization, subject to consultation with
and approval by the superintendent.
(x)
Alternative legal remedies. The designated organization shall not be
made a party to a court proceeding relating to an arbitration award
unless the designated organization’s presence as a party is pertinent
to the issues raised in the litigation. The participation of a party in
an arbitration proceeding shall be a waiver of any claim against an
arbitrator or the designated organization for any act or omission in
connection with any arbitration conducted under these rules. The
designated organization shall transmit to the superintendent copies of
any legal papers served upon designated organization or an arbitrator,
relating to any stay or appeal of an arbitration.
(y)
Payment of award. Insurers shall, within 30 calendar days of the date of
mailing of the award, either pay the amounts set forth in the award or,
where grounds exist, appeal to the master arbitrator as provided for in
this Part, which appeal shall stay payment of the award. The award need
not be confirmed into judgment.
(z)
Arbitrator’s compensation and expenses. At the direction of the
Superintendent, arbitrators shall contract on an annual basis with the
designated organization. The rate of annual compensation shall be
determined by the designated organization, after consultation with the
No-Fault Arbitrator Screening Committee subject to the approval of the
Superintendent. Arbitrators shall be independent contractors, and shall
not be employees or agents of the designated organization or the
Insurance Department.
(aa)
Financing.
(1)
The cost of administering the No-Fault Arbitration forum 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 No-Fault Arbitration forum proceedings.
(2)
Semiannually, the designated organization shall prepare a budget of the
estimated fees to be incurred for the operation of the No-Fault
Arbitration forum during the subsequent six-month period. The estimated
fees of the No-Fault Arbitration forum shall be assessed on a
proportionate basis to those insurers named as respondents on cases
forwarded to No-Fault arbitration 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 fees for the
operation of the No-Fault Arbitration forum. 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 fee 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 fee 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 designated organization’s assessment. Any adjustment
shall be made to the bill for the subsequent estimated assessment, as
illustrated by the following example:
EXAMPLE
|
(1) Total No-Fault
Arbitration forum cases closed during year |
6,000 |
|
(2) Cases in which
Insurer A was named as a respondent in the
No-Fault Arbitration forum proceeding |
250 |
|
(3) Insurer A's
Assessment Percentage = (2) /(1) |
4.167% |
|
(4) Actual
Expenses of the No-Fault Arbitration forum |
$2,500,000 |
|
(5) Insurer A's
actual expense = (3)x(4) |
$104,175 |
|
(6) Insurer A's
Estimated Assessment |
$102,000 |
|
(7) Insurer A's
Debit or (Credit) =(5)-(6) |
$2,175 |
65-4.6
Limitations on attorney’s fees pursuant to section 5106 of the
Insurance Law.
The following
limitations shall apply to the payment by insurers of applicants’
attorney’s fees for services necessarily performed in the resolution
of no-fault disputes:
(a)
If an arbitration was initiated or a court action
was commenced by an attorney on behalf of an applicant and the claim or
portion thereof was not denied or overdue at the time the arbitration
proceeding was initiated or the action was commenced, no attorney’s
fees shall be granted.
(b)
If the claim is resolved by the designated organization at any time
prior to transmittal to an arbitrator and it was initially denied by the
insurer or overdue, the payment of the applicant’s attorney’s fee by
the insurer shall be limited as follows:
(1)
If the resolved claim was initially denied, the attorney’s fee shall
be $80.
(2)
If the resolved claim was overdue but not denied, the attorney’s fee
shall not exceed the amount of first-party benefits and any additional
first-party benefits, plus interest thereon, which the insurer agreed to
pay and the applicant agreed to accept in full settlement of the dispute
submitted, subject to a maximum fee of $60.
(3)
In disputes solely involving interest, the attorney’s fee shall be
equal to the amount of interest which the insurer agreed to pay and the
applicant agreed to accept in full settlement of the dispute submitted,
subject to a maximum fee of $60.
(4)
Notwithstanding the limitations of this subdivision, the insurer may, at
its discretion, offer a higher attorney’s fee, subject to the
limitations of subdivisions (d) or (e) of this section, in order to
resolve the dispute during conciliation.
(c)
Except as provided in subdivisions (a) and (b) of this section, the
minimum attorney’s fee payable pursuant to this subpart shall be $60.
(d)
For disputes subject to arbitration by the No-Fault Arbitration forum
where one of the issues involves a policy issue as enumerated on the
prescribed denial of claim form (NYS form N-F-10), subject to the
provisions of subdivisions (a) and (c) of this section, the attorney’s
fee for the arbitration of all issues shall be limited as follows:
(1)
for preparatory services relating to the arbitration forum or court, the
attorney shall be entitled to receive a fee of up to $70 per hour,
subject to a maximum fee of $1,400; and
(2)
in addition, an attorney shall be entitled to receive a fee of up to $80
per hour for each personal appearance before the arbitration forum or
court.
(e)
For all other disputes subject to arbitration, subject to the provisions
of subdivisions (a) and (c) of this section, the attorney’s fee shall
be limited as follows: 20 percent of the amount of first-party
benefits, plus interest thereon, awarded by the arbitrator or court,
subject to a maximum fee of $850. If the nature of the dispute results
in an attorney’s fee which could be computed in accordance with the
limitations prescribed in both subdivision (d) and this subdivision, the
higher attorney’s fee shall be payable. However, if the insurer
made a written offer pursuant to section 65-4.2(b)(4) of this Subpart
and if such offer equals or exceeds the amount awarded by the
arbitrator, the attorney’s fee shall be based upon the provisions of
subdivision (b) of this section.
(f)
Notwithstanding the limitations listed in this section, if the
arbitrator or a court determines that the issues in dispute were of such
a novel or unique nature as to require extraordinary skills or services,
the arbitrator or court may award an attorney’s fee in excess of the
limitations set forth in this section. An excess fee award shall detail
the specific novel or unique nature of the dispute which justifies the
award. An excess award of an attorney’s fee by an arbitrator shall be
appealable to a master arbitrator.
(g)
If a dispute involving an overdue or denied claim is resolved by the
parties after it has been forwarded by the Insurance Department or the
conciliation center to the appropriate arbitration forum or after a
court action has been commenced, the claimant’s attorney shall be
entitled to a fee which shall be computed in accordance with the
limitations set forth in this section.
(h)
No attorney shall demand, request or receive from the insurer any
payment of fees not permitted by this section.1
(i)
Notwithstanding any other provision of this section and with respect to
billings on and after the effective date of this regulation, if the
charges by a health care provider, who is an applicant for benefits,
exceed the limitations contained in the schedules established pursuant
to section 5108 of the Insurance Law, no attorney’s fee shall be
payable by the insurer. This provision shall not be applicable to
charges that involve interpretation of such schedules or inadvertent
miscalculation or error.
65-4.7
Independent health consultant.
(a)
The designated organization shall maintain a list of independent health
consultants, who will review medical evidence or examine the eligible
injured person upon the request of any arbitrator designated pursuant to
this Subpart.
(b)
The independent health consultant shall be selected by the designated
organization from its list and, to the extent practicable, shall be a
specialist in the field requested by the arbitrator. If a medical
examination is requested by the arbitrator, such examination shall be
conducted at the health consultant’s office, which shall be located in
the general locale of the applicant’s residence, or at a place agreed
upon by the parties and the consultant.
(c)
Within 15 calendar days after the review of medical evidence or
examination of the eligible injured person, the health consultant shall
submit to the designated organization a written report which
shall contain the consultant’s advisory opinion for consideration by
the arbitrator. The designated organization shall submit such
report to the arbitrator and the parties.
(d)
The independent health consultant’s fee shall include the written
report and be paid by the designated organization, with the cost of such
fee charged as an administrative expense of the No-Fault Arbitration forum.
1Attorneys
should be aware of the Appellate Division Rules prohibiting fees in
connection with the collection of first-party no-fault benefits (22
NYCRR 603.7 (e)(7), 691.20 (e)(7), 806.13(f), and 1022.3(f)).
(e)
No person shall serve as an independent health consultant in any
arbitration in which such person has any financial or personal interest
or bias. An independent health consultant shall disclose to the
designated organization any circumstance which is likely to create an
appearance of bias or which might serve to disqualify such expert. Upon
receipt of such information, the designated organization shall
immediately disclose it to the parties. If a party challenges a health
consultant, the specific grounds for the challenge shall be submitted in
writing. The designated organization shall determine whether the health
consultant should be disqualified and shall inform the parties of its
decision, which shall be final and binding. If a health consultant
should resign, be disqualified or be otherwise unable to perform
necessary duties, the designated organization shall appoint another
health consultant to the case.
65-4.8
Witness fees.
(a)
No witness fee shall be payable to a person who is a party to the
arbitration.
(b)
The arbitrator shall not approve the payment of a fee to a witness
appearing on behalf of an applicant or an assignee, unless the witness
was subpoenaed by the arbitrator or, prior to appearance, the
witness’s presence was determined by the arbitrator to be necessary
for resolution of the dispute.
(c)
Whenever a witness fee is determined by the arbitrator to be payable,
the cost thereof shall be charged as an administrative expense of the
arbitration forum.
(d)
Any witness fee awarded pursuant to subdivisions (b) and (c) of this
section shall be determined as follows:
(1)
If the witness is testifying as an expert, the fee shall be calculated
on the basis of such witness’s documented usual and customary hourly
charge for an appearance, plus necessary verified disbursements.
(2)
Any other witness shall only be entitled to reimbursement for verified
expenses and economic losses necessarily incurred in connection with an
appearance before the arbitrator.
65-4.9
Serving of Notice.
The IDA, the designated
organization and the Parties may use facsimile transmission, telex,
telegram or other written or electronic forms of communication to give
the notices required by this subpart.
65-4.10
Master arbitration procedures under section 5106(b) of the Insurance
Law.
(a)
Grounds for review. An award by an arbitrator rendered pursuant to
section 5106(b) of the Insurance Law and section 65-4.4 or section
65-4.5 of this Subpart may be vacated or modified solely by appeal to a
master arbitrator, and only upon one or more of the following grounds:
(1)
any ground for vacating or modifying an award enumerated in article 75
of the Civil Practice Law and Rules (an article 75 proceeding), except
the ground enumerated in CPLR subparagraph 7511(b)(1)(iv) (failure to
follow article 75 procedure);
(2)
that the award required the insurer to pay amounts in excess of the
policy limitations for any element of first-party benefits; provided
that, as a condition precedent to review by a master arbitrator, the
insurer shall pay all other amounts set forth in the award which will
not be the subject of an appeal, as provided for in section 65-4.4 or
section 65-4.5 of this Subpart;
(3)
that the award required the insurer to pay amounts in excess of the
policy limitations for any element of additional first-party benefits
(when the parties had agreed to arbitrate the dispute under the
additional personal injury protection endorsement for an accident which
occurred prior to January 1, 1982); provided that, as a condition
precedent to review by a master arbitrator, the insurer shall pay all
other amounts set forth in the award which will not be the subject of
the appeal, as provided for in section 65-4.4 or section 65-4.5 of this
Subpart;
(4)
that an award rendered in an arbitration under section 65-4.4 or section
65-4.5 of this Subpart, was incorrect as a matter of law (procedural or
factual errors committed in the arbitration below are not encompassed
within this ground);
(5)
that the attorney’s fee awarded by an arbitrator below was not
rendered in accordance with the limitations prescribed in section 65-4.6
of this Part; provided that, as a condition precedent to review by a
master arbitrator, the insurer shall pay all other amounts set forth in
the award which will not be the subject of the appeal, as provided for
in section 65-4.4 or section 65-4.5 of this Subpart.
(b)
Qualifications of master arbitrators.
(1)
A master arbitrator shall be an attorney, licensed to practice law in
New York State, who has at least 15 years’ experience which the
superintendent has determined qualifies such attorney to review and
resolve the issues involved in no-fault insurance disputes.
Documentation of such experience shall be submitted to, and reviewed by,
the superintendent prior to appointment of a master arbitrator.
(2)
All master arbitrators shall be appointed by, and serve at the pleasure
of, the superintendent. A master arbitrator candidate shall disclose to
the superintendent any circumstance which is likely to create an
appearance of bias or which might disqualify such person as a master
arbitrator, and the superintendent shall determine whether the candidate
should be disqualified. The superintendent shall forward the names of
all master arbitrators to the designated organization, and
promptly inform it of all additions to, and deletions from, the panel.
(3)
No person shall, during the period of appointment as a master
arbitrator, also serve as an arbitrator under the optional arbitration
systems prescribed in section 5106(b) of the Insurance Law and section
65-4.4 or section 65-4.5 of this Subpart, nor serve as an attorney to a
party to any such arbitration.
(4)
All master arbitrators shall take an oath of office.
(5)
No person shall serve as a master arbitrator in any master arbitration
in which such person has any financial or personal interest or bias. If
a party challenges a master arbitrator, the specific grounds for the
challenge shall be submitted in writing to the designated organization
which, in consultation with the superintendent, shall determine within
15 calendar days after receipt of the challenge whether the master
arbitrator should be disqualified. Such determination shall be final and
binding. If a master arbitrator should resign, be disqualified or be
otherwise unable to perform necessary duties, the designated
organization shall assign another master arbitrator to the case within
seven calendar days after receipt of notice thereof.
(c)
Scope of master arbitration review.
(1)
Review by a master arbitrator shall be based solely on submitted
documents, including any record made of the arbitration below, unless a
master arbitrator requires oral argument on specified issues.
(2)
Legal briefs shall not be submitted, unless requested by the master
arbitrator.
(3)
The master arbitrator shall initially consider and determine whether the
facts alleged in the submitted documents set forth a ground for review
pursuant to subdivision (a) of this section.
(4)
If the master arbitrator determines that subdivision (a) of this section
has not been complied with, the master arbitrator shall, in lieu of
rendering an award, deny the request for review. The procedural
requirements contained in this section applicable to a master award,
shall also be applicable to a denial of request for review, but such
denial shall not form the basis of an action de novo within the meaning
of section 5106(b) of the Insurance Law.
(5)
If the master arbitrator determines that subdivision (a) of this section
has been complied with, the master arbitrator shall proceed to review
the matter and render an award accordingly.
(6)
The master arbitrator shall only consider those matters which were the
subject of the arbitration below or which were included in the
arbitration award appealed from.
(d)
Procedure for review.
(1)
If grounds exist, pursuant to subdivision (a) of this section, any party
to an arbitration may request that the arbitration award be vacated or
modified by a master arbitrator.
(2)
The request for review by a master arbitrator shall be in writing and
shall be mailed or delivered to the designated organization’s
Master Arbitration administrative office within 21 calendar days
of the mailing of the award. The request shall include a copy of
the award in issue and shall state the nature of the dispute and the
grounds for review. A request by an applicant for benefits shall be
accompanied by a filing fee of $75, payable by check or money order to
the designated organization. A request by an insurer shall be
accompanied by a filing fee of $325, payable by check or money order to
the designated organization. The failure of a party to enclose the
appropriate filing fee with a timely request for review shall result in
a denial of the request for review by a master arbitrator if such
payment is not made within 28 calendar days of the mailing of the award.
(3)
The applicant for master arbitration review shall send, by certified
mail, a copy of its filing papers to the opposing party at the same time
that it submits the request for review to the designated organization.
(4)
Within seven calendar days of receipt of the request, the designated
organization shall assign a master arbitrator, selected in sequence from
a panel of master arbitrators appointed by the superintendent, and shall
forward to the master arbitrator a copy of the request for review.
(5)
The master arbitrator shall render an award no later than 90 calendar
days after assignment.
(i)
Submission of materials. Within 15 calendar days after assignment, the
master arbitrator shall set a date (which date shall not be more than 45
calendar days after assignment) by which all evidence, documents and
briefs, if any, must be submitted to the master arbitrator by the
parties. The master arbitrator shall give the parties 30 calendar
days’ written notice of this date.
(ii)
Oral argument. If after receipt of these materials, the master
arbitrator determines that oral argument on specific issues is
necessary, the master arbitrator shall give the parties 10 calendar
days’ notice of the place, time and date for oral argument and the
issues to be argued. Oral argument shall be conducted at the office of
the master arbitrator, the office of the designated organization or at a
location agreeable to the parties and the master arbitrator.
(iii)
The master arbitrator may postpone or adjourn the date for submission of
materials or of oral argument to a date within the 90-day period for
good cause shown. A postponement or adjournment shall also be granted
when all the parties agree thereto. The postponement or adjournment
shall not extend the 90-day period for rendering of an award.
(6)
The failure of a master arbitrator to adhere to the procedural time
frames, contained in paragraph (5) of this subdivision, shall not affect
the validity of an award.
(7)
Any party may be represented in a master arbitration by an attorney.
(8)
A master arbitration shall proceed if any party, after due notice of the
date to submit materials or date of oral arguments, fails to appear, to
submit materials or to obtain a postponement or adjournment. However, an
award shall not be made in favor of an appearing party solely on the
text_con of another party. A master arbitrator shall direct the
appearing party to submit such materials as may be required in order to
render a decision in the matter.
(e)
Award by master arbitrator.
(1)
Form and scope of award.
(i)
The award shall be in writing in a format approved by the
superintendent. It shall state the issues in dispute and contain the
master arbitrator’s findings and conclusions based on the materials
submitted. It shall be signed by the master arbitrator and shall be
transmitted to the parties by the designated organization, with a copy
to the Insurance Department. The award shall be determinative of all
issues submitted to the master arbitrator by the parties.
(ii)
If the applicant for benefits prevails in whole or part on the claim,
the award shall also direct the insurer to:
(a)
if the applicant requested review by a master arbitrator, pay to the
applicant reimbursement of the amount of the master arbitration filing
fee paid;
(b)
pay to the applicant the amount previously paid by the applicant to
reimburse for the filing fee in the arbitration below, unless the filing
fee had already been returned to the applicant pursuant to an earlier
award;
(c)
if due under section 5106 of the Insurance Law, pay a reasonable
attorney’s fee in accordance with the limitations set forth in
subdivision (j) of this section;
(d)
if due, compute and pay the amount of interest for each element of
first-party benefits in dispute, commencing 30 days after proof of claim
therefor was received by the insurer and ending with the date of payment
of the award, subject to the provisions of section 65-3.9(c) and (d) of
this Part (stay of interest).
(2)
Award upon settlement. If the parties settle their dispute during the
course of the master arbitration, the master arbitrator shall set forth
the terms of the agreed settlement in an award which shall provide that
the parties agree that the settlement is final and binding and shall not
be subject to review by a court or the subject of a de novo court
action. The award shall be signed by the master and shall be transmitted
to the parties by the designated organization, with a copy to the
Insurance Department.
(3)
Delivery of award to parties. The parties shall accept as delivery of
the award the placing of the award or a true copy thereof in the mail,
addressed to the parties or their designated representatives at their
last known addresses, or by any other form of service permitted by law.
The designated organization shall note on such award or transmittal
letter thereof the date of mailing and keep a record of same.
(4)
Payment of award. Subject to subdivision (h) of this section, the
insurer shall, within 21 calendar days of the date of mailing of the
award, pay the amounts set forth in the award. The award need not be
confirmed into judgment.
(f)
Interpretation and application of procedures. The master arbitrator
shall interpret and apply the procedures of this section insofar as they
relate to the master arbitrator’s powers and duties. All other
procedures shall be administered by the designated organization,
subject to consultation with and approval by the superintendent.
(g)
Alternative legal remedies. The designated organization or the
master arbitrator shall transmit to the superintendent copies of any
legal papers served upon the designated organization, or the master
arbitrator, relating to any stay or appeal of a master arbitration.
(h)
Appeal from master arbitrators award.
(1)
A decision of a master arbitrator is final and binding, except for:
(i)
court review pursuant to an article 75 proceeding; or
(ii)
if the award of the master arbitrator is $5,000 or greater, exclusive of
interest and attorney’s fees, either party may, in lieu of an article
75 proceeding, institute a court action to adjudicate the dispute de
novo.
(2)
A party who intends to commence an article 75 proceeding or an action to
adjudicate a dispute de novo shall follow the applicable procedures as
set forth in CPLR article 75. If the party initiating such action is an
insurer, payment of all amounts set forth in the master arbitration
award which will not be the subject of judicial action or review shall
be made prior to the commencement of such action.
(i)
Master arbitrator’s fee. The master arbitrator shall be compensated in
the amount of $250 for each case. Such fee will be paid by the
designated organization. The master arbitrator’s fee shall be charged
to the cost of administering the master arbitration system.
(j)
Limitations on attorney’s fees pursuant to section 5106 of the
Insurance Law. The following limitations shall apply to the
payment by insurers of applicant’s attorney’s fees for services
rendered in a master arbitration to resolve a no-fault dispute:
(1)
The minimum attorney’s fee payable pursuant to this subpart shall be
$60.
(2)
(i)
For preparatory services necessarily rendered, the attorney shall be
entitled to receive a fee of up to $65 per hour, subject to a maximum
fee of $650.
(ii)
An attorney shall be entitled to receive a fee of up to $80 per hour for
oral argument before the master arbitrator, made pursuant to paragraph
(c)(1) of this section.
(iii)
If an applicant is successful in obtaining a reversal of the
arbitration(s) below, wherein no attorney’s fee was awarded, the
attorney in the arbitration below shall also be entitled to receive a
fee, computed in accordance with the provisions of section 65-4.6 of
this Subpart.
(3)
Notwithstanding the above limitations, if the master arbitrator
determines that the issues in dispute were of such a novel or unique
nature as to require extraordinary skills or services, the master
arbitrator may award an attorney’s fee in excess of the limitations
set forth above. An excess fee award shall detail the specific novel or
unique nature of the dispute which justifies the award.
(4)
The attorney’s fee for services rendered in connection with a court
adjudication of a dispute de novo, as provided in section 5106(c) of the
Insurance Law, or in a court appeal from a master arbitration award and
any further appeals, shall be fixed by the court adjudicating the
matter.
(5)
No attorney shall demand, request or receive from the insurer any
payment or fee in excess of the fees permitted by this subdivision for
services rendered with respect to a no-fault master arbitration dispute.
(k)
Financing.
(1)
The cost of administering the master arbitration system over and above
the amount of fees paid by applicants and insurers shall be paid
annually by insurers 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. This distribution
shall, to the extent practicable, be a function of the degree to which
an insurer is a party to arbitration proceedings.
(2)
Upon filing of a demand for master arbitration by an applicant, the
designated organization shall bill the respondent insurer the sum of
$250, which shall be payable by the insurer within 30 days after
billing.
(3)
On an annual basis, as of December 31st of each year, the
designated organization shall prepare a detailed accounting of the
actual costs incurred for the implementation of the master arbitration
system and the amount of fees received from applicants and insurers. The
accounting will be forwarded to the No-Fault Optional Arbitration
Advisory Committee (the committee) and the superintendent on or before
April 30th of each year. The committee shall notify the
designated organization and the superintendent whether it accepts the
designated organization’s accounting in whole or in part. In the event
the designated organization and the committee cannot resolve any
differences that may exist, the dispute 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 accounting that has
either been approved by the committee or resolved, in the event of a
dispute, by the superintendent, the designated organization shall send
to each insurer a bill for the amount due or a refund for the amount
credited, based upon the number of master arbitrations to which the
insurer was a party.
65-4.11
Mandatory arbitration for insurers, self-insurers and compensation
providers under section 5105 of the Insurance Law.
(a)
Applicability.
(1)
This section shall apply to mandatory arbitration of controversies
between insurers, pursuant to the provisions of section 5105 of the
Insurance Law, and shall apply to insurers, self-insurers and
compensation providers. The term insurer as used in this section (except
as specified in paragraphs (c)(2) and (f)(1) of this section) shall
include both “insurers” and “self-insurers” as those terms are
defined in this Part and article 51 of the Insurance Law; the Motor
Vehicle Accident Indemnification Corporation (MVAIC); any company
providing insurance pursuant to section 5103(g) of the Insurance Law;
and compensation providers as defined in section 5102(l) of the
Insurance Law.
(2)
All insurers shall submit controversies arising out of accidents,
insured events or occurrences within the jurisdiction of section 5105 or
5221(b) of the Insurance Law to mandatory arbitration, as prescribed in
this section. Controversies arising from accidents, insured events or
occurrences outside the jurisdiction of section 5105 or 5221(b) may be
submitted with the consent of the controverting insurers.
(3)
Any determination as to whether an insurer is legally entitled to
recovery from another insurer shall be made by an arbitration panel (see
paragraph (c)(2) of this section) appointed pursuant to this section.
The decision of a majority of an arbitration panel shall be final and
binding upon the insurers to the controversy. There shall be no right of
rehearing or appeal. However, this provision does not preclude
correction of clerical or typographical errors.
(4)
Where arbitrating insurers are signators to any insurer arbitration
program under which a claim or companion claims would be otherwise
subject to the compulsory jurisdiction of such agreements, the
jurisdiction of this section shall be primary. Insurers shall waive
their rights to proceed separately under such other arbitration programs
and include all claims arising out of the same accident or insured event
for disposition by an arbitration panel appointed pursuant to this
section.
(5)
This section is applicable only to controversies involving insurers.
(6)
Other than claims asserted by MVAIC against an insurer, this section
shall not apply to any claim for recovery rights to which an insurer in
good faith asserts a defense of lack of coverage of an alleged covered
person on any grounds, unless specific written consent of mandatory
arbitration is obtained from the insurer asserting such defense. Where
an insurer asserts a defense of lack of coverage of an alleged covered
person on any grounds relating to claims asserted by MVAIC for recovery
rights, same shall be subject to mandatory arbitration. However, any
controversy between insurers involving the responsibility or the
obligation to pay first-party benefits (i.e., priority or payment or
sources of payment as provided in section 65-3.12 of this Part) is not
considered a coverage question and must be submitted to mandatory
arbitration under this section.
(7)
This section shall not be construed to create any causes of action or
liabilities not existing in law or equity, nor shall this section be
construed to abolish any causes of action or liabilities existing in law
or equity.
(b)
Administration of arbitration.
(1)
The arbitration prescribed in this section shall be administered by an
Inter-Company Arbitration administrator “Administrator” designated
by the Superintendent. The Administrator may:
(i)
make appropriate administrative rules for arbitrations;
(ii)
select places where arbitration facilities are to be available, and
adopt a policy for the selection and appointment of arbitration panels;
and
(iii)
make appropriate recommendations for equitable apportionment among
arbitrating insurers of the operating expenses of this program.
(2)
Local arbitration panels.
(i)
Members of local arbitration panels shall be appointed by the
Administrator from full-time salaried representative of insurers, on the
basis of their experience and qualifications, and shall serve without
compensation.
(ii)
The Administrator shall be responsible for the selection of arbitration
panels to hear the particular cases.
(c)
Selection of arbitrators.
(1)
Insurers shall furnish the Administrator with a list of names, titles
and local addresses of all employees who are qualified to act as
arbitrators.
(2)
The Administrator shall designate one disinterested member of such
panel to serve as an arbitrator in each case. However, an insurer may
request a three-member arbitration panel in a specific case. If one or
more of the controverting parties is a self-insurer which has requested
a three-member panel, then the self-insurer may also request that at
least one member of the panel be a disinterested representative of a
self-insurer, where such representative is available to serve on the
panel.
(3)
No one shall serve as an arbitrator on a panel hearing a case in which
the insurer represented by the arbitrator is directly or indirectly
interested.
(d)
All arbitrations under this Subpart shall be conducted in accordance
with procedures established by the Administrator and approved by the
superintendent.
(e)
Filing assessments.
(1)
The Administrator, by resolution, will recommend the filing assessment
for the use of local arbitration facilities. The expenses of the program
shall be periodically reviewed by the loss transfer advisory committee
(see subdivision (f) of this section), which shall consider the
recommendations of the Administrator and prescribe from time to time
arbitration assessments.
(2)
The obligation for the prescribed filing assessment is incurred upon
filing by the applicant, by a respondent filing a counterclaim or by a
party filing a deferment. There are no exceptions to an
insurer’s obligation to pay the filing assessment.
(3)
The secretary of the Administrator is the custodian of the assessment
charges collected and shall make expenditures therefrom to defray such
arbitration expenses as may be authorized by the Administrator.
(4)
The secretary of the Administrator will submit reports on assessments
collected and disbursed during such period as may be considered
desirable by the Administrator.
(f)
Loss transfer advisory committee.
(1)
The superintendent shall select a loss transfer advisory committee
composed of 14 members, of which eight shall represent motor vehicle
insurers, three shall represent motor vehicle self-insurers, two shall
represent compensation providers and one shall represent the Motor
Vehicle Accident Indemnification Corporation.
(2)
The loss transfer advisory committee shall:
(i) regularly review the
operations, procedures, rules, expenditures, assessments and all other
relevant matters involving settlements between insurers in accordance
with the requirements of section 5105 or 5221(b) of the Insurance Law;
(ii) review the operations
of the Administrator insofar as they relate to the arbitration
prescribed in this section; and
(iii) report its findings,
conclusions and recommendations directly to the superintendent annually
and at such other intervals as it deems appropriate.
