New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter III - Policy and Certificate Provisions › Subchapter B - Property and Casualty Insurance › Part 71 - Legal Defense Costs In Liability Policies › Section 71.5 - Required notification

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Any
				  policy issued or renewed in this State permitted pursuant to this Part must
				  print a conspicuous notice of its defense cost offset provisions on the face of
				  the application for insurance and on the face of the policy.
(b)
(1)
				  Except as provided in paragraph (4) of this subdivision, any policy containing
				  legal defense cost offset provisions specified in section
				  71.3(a) 
				  of this Part must contain a statement signed by the insured acknowledging that
				  the insured is aware that the limits of liability contained in the policy shall
				  be reduced up to the amount or percentage stated in the policy by legal defense
				  costs and, in such event, the insurer shall be liable for legal defense costs
				  (except those due to any offset against the deductible) exceeding that amount
				  or percentage.
(2) Any policy
				  containing the legal defense cost offset provisions specified in section
				  71.3(a) 
				  of this Part where the percentage limitation may be omitted pursuant to section
				  71.3(c) 
				  must contain a statement signed by the insured acknowledging that the insured
				  is aware that the limits of liability contained in the policy shall be reduced,
				  and may be completely exhausted, by legal defense costs and, to the extent that
				  policy limits are thereby exceeded, the insurer shall not be liable for legal
				  defense costs or for the amount of any judgment or settlement.
(3) Any policy containing the legal defense
				  cost offset provisions specified in section
				  71.3(b) 
				  of this Part must contain a statement signed by the insured acknowledging that
				  the insured is aware that legal defense costs that are incurred shall be
				  applied against the deductible up to the amount or percentage stated in the
				  policy and, in such event, that the insurer shall be liable for legal defense
				  costs (except for those due to any offset against liability limits) exceeding
				  that amount or percentage.
(4) Any
				  policy containing the separate defense limit provisions specified in section
				  71.4  of
				  this Part shall contain a statement signed by the insured, describing the
				  separate defense limit, and acknowledging that the insured is aware that the
				  amounts available for the payment of legal defense costs are limited and may be
				  exhausted and, in that event or in the event that the separate liability limits
				  are exhausted, the insurer shall not be liable for any further legal defense
				  costs.
(5) Any policy issued
				  pursuant to section
				  71.3(e)(1)(ii)
				  through (iv)  of this Part shall contain a
				  statement signed by the insured, acknowledging that the insured is aware of the
				  extent to which legal defense costs that are incurred shall be offset against
				  the limits of liability or the deductible and, if such limits can be completely
				  exhausted by the payment of legal defense costs, that the insurer in the event
				  of such exhaustion shall not be liable for further legal defense costs or for
				  the amount of any judgment or settlement.