2023 New York Laws › ISC - Insurance › Article 12 - Organization and Corporate Procedure › 1213 - Service of Process on Superintendent as Attorney for Unauthorized Insurers.

§   1213.  Service  of  process  on  superintendent  as  attorney  for
unauthorized insurers. (a) The purpose of this  section  is  to  subject
certain  insurers  to  the  jurisdiction  of the courts of this state in
suits by or  on  behalf  of  insureds  or  beneficiaries  under  certain
insurance  contracts.  The  legislature declares that it is a subject of
concern that many residents of this state  hold  policies  of  insurance
issued or delivered in this state by insurers while not authorized to do
business  in  this  state,  thus  presenting to such residents the often
insuperable obstacle of resorting to distant forums for the  purpose  of
asserting legal rights under such policies. In furtherance of such state
interest,  the  legislature  herein  provides  a  method  of substituted
service of process upon such insurers and declares that in so  doing  it
exercises  its  power  to  protect  its residents and to define, for the
purpose of this section, what constitutes doing business in this  state,
and  also  exercises  powers  and  privileges  available to the state by
virtue of public law  number  fifteen,  seventy-ninth  congress  of  the
United  States,  chapter  twenty,  first  session,  senate  number three
hundred forty, as amended, (15 U.S.C. § 1011) which  declares  that  the
business  of insurance and every person engaged therein shall be subject
to the laws of the several states.
(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.
(2)  Such  service  of  process  upon  any  such  insurer  in any such
proceeding in any court of competent jurisdiction of this state  may  be
made  by  serving  the  superintendent, any deputy superintendent or any
salaried employee of the department whom the  superintendent  designates
for  such  purpose with two copies thereof and the payment to him or her
of a fee of forty dollars. The superintendent shall forward  a  copy  of
such  process  by  registered  or certified mail to the defendant at its
last known principal place of business, as designated by the  issuer  of
such  process, and shall keep a record of all process so served upon him
or her. Such service of process  under  this  paragraph  is  sufficient,
provided  notice  of  such  service  and  a copy of the process are sent
within ten days thereafter by or on  behalf  of  the  plaintiff  to  the
defendant at its last known principal place of business by registered or
certified  mail  with return receipt requested. The plaintiff shall file
with the clerk of the court in which the action is pending, or with  the
judge  or  justice  of  such court if there be no clerk, an affidavit of
compliance herewith, a copy of the process, and either a return  receipt
purporting  to  be  signed  by  the  defendant  or a person qualified to
receive its registered or certified mail in accordance  with  the  rules
and customs of the post office department, or, if acceptance was refused
by  the defendant or its agent, the original envelope bearing a notation
by the postal authorities that receipt was refused. Service  of  process

so  made shall be deemed made within the territorial jurisdiction of any
court in this state.
(3) Service of process in any such proceeding shall in addition to the
manner  provided  in paragraph two of this subsection be valid if served
upon any person within this state who, in this state on behalf  of  such
insurer, is:
(A) soliciting insurance;
(B) making, issuing or delivering any contract of insurance; or
(C) collecting or receiving any premium, membership fee, assessment or
other consideration for insurance;
provided  notice  of  such  service  and a copy of such process are sent
within ten days thereafter, by or on behalf  of  the  plaintiff  to  the
defendant  at  the  last  known  principal  place  of  business  of  the
defendant,  by  registered  mail  with  return  receipt  requested.  The
plaintiff  shall file with the clerk of the court in which the action is
pending, or with the judge or justice of such court in case there be  no
clerk,  an  affidavit of compliance herewith, a copy of the process, and
either a return receipt purporting to be signed by the  defendant  or  a
person  qualified  to receive its registered mail in accordance with the
rules and customs of the post office department; or, if  acceptance  was
refused  by  the  defendant or its agent the original envelope bearing a
notation by the postal authorities that receipt was refused.
(4) The papers referred  to  in  paragraphs  two  and  three  of  this
subsection shall be filed within thirty days after the return receipt or
other  official  proof  of  delivery, or the original envelope bearing a
notation of refusal, is received by the plaintiff.  Service  of  process
shall  be  complete  when  such  process and the accompanying papers are
filed pursuant to this section.
(5) Nothing contained in this section shall limit or abridge the right
to serve any process, notice or demand upon any  insurer  in  any  other
manner permitted by law.
(c)  (1)  Before  any  unauthorized foreign or alien insurer files any
pleading in any proceeding against it, it shall either:
(A) deposit with the clerk of the court in  which  the  proceeding  is
pending, cash or securities or file with such clerk a bond with good and
sufficient  sureties,  to  be  approved by the court, in an amount to be
fixed by the court sufficient to secure payment of  any  final  judgment
which  may  be  rendered  in  the  proceeding,  but the court may in its
discretion make an order dispensing with such deposit  or  bond  if  the
superintendent  certifies  to it that such insurer maintains within this
state funds or securities in trust or otherwise sufficient and available
to satisfy any final judgment which may be entered in the proceeding, or
(B) procure a license to do an insurance business in this state.
(2) The court in any proceeding wherein service is  made  pursuant  to
paragraph  two  or  three  of subsection (b) of this section may, in its
discretion, order such postponement as may be necessary  to  afford  the
defendant  reasonable  opportunity  to  comply  with  the  provisions of
paragraph one of this subsection and to defend such proceeding.
(3) Nothing in paragraph one of this subsection is to be construed  to
prevent an unauthorized foreign or alien insurer from filing a motion to
set  aside service made in the manner provided in paragraph two or three
of subsection (b) hereof  on  the  ground  (i)  that  such  unauthorized
insurer  has  not done any act enumerated in paragraph one of subsection
(b) of this section, or (ii) that the person on whom  service  was  made
pursuant  to  paragraph three of subsection (b) hereof was not doing any
act therein enumerated.
(d) In any action against an unauthorized  foreign  or  alien  insurer
upon  a  contract  of  insurance  issued or delivered in this state to a

resident thereof or to a corporation authorized to do business  therein,
if  the  insurer  has  failed  for thirty days after demand prior to the
commencement of the action to make payment pursuant to the contract, and
it  appears  to  the  court  that such refusal was vexatious and without
reasonable cause, the court may allow plaintiff a reasonable  attorney's
fee  and  include such fee in any judgment rendered in such action. Such
fee shall not exceed twelve and one-half percent of the amount the court
finds the plaintiff is entitled to recover against the  insurer  nor  be
less  than twenty-five dollars. Failure of an insurer to defend any such
action shall be prima  facie  evidence  that  its  failure  to  pay  was
vexatious and without reasonable cause.
(e)  This  section  shall  not  apply  to  any  proceeding against any
unauthorized foreign or alien insurer arising out  of  any  contract  of
insurance  effectuated  in  accordance  with  subsection  (b)  or (c) of
section two thousand  one  hundred  seventeen  of  this  chapter  or  in
accordance  with  section  two thousand one hundred five of this chapter
where such contract designates the superintendent or his  successors  in
office  the  insurer's  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 such contract.
(f) The superintendent shall keep a record of each process served upon
him  under this section and pursuant to section one thousand two hundred
twelve of this article, including the date of service.  He  shall,  upon
request made within ten years of such service, issue a certificate under
his  seal  certifying  as to the receipt of the process by an authorized
person, the date and place of service and the receipt of  the  statutory
fee.  Process served upon the superintendent pursuant to this section or
section one thousand  two  hundred  twelve  of  this  article  shall  be
destroyed by him after a period of ten years from such service.