New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter XII - Group Property/casualty Insurance › Part 310 - Product Or System Group Insurance Policies › Section 310.0 - Preamble

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Chapter 187 of
				the Laws of 1999 added a new section
				3446 to the Insurance Law, entitled
				"product or system group insurance policies." This Part implements section
				3446, which permits a group policy to be issued to a manufacturer, distributor,
				or installer of a product or system, or a trustee on behalf of more than one
				manufacturer, distributor or installer. The policy insures persons who have
				purchased or own the product or system where the manufacturer, distributor, or
				installer has represented that the product or system is designed to prevent
				loss or damage to property from a specific cause. The policy covers the loss or
				damage to the property from such cause. The policy may not cover loss or damage
				resulting from a defect in materials or workmanship, or wear and tear and may
				not be duplicative of coverage under any other applicable insurance policy. The
				policy may provide coverage for unreimbursed incidental expenses that may be
				incurred as a result of the loss or damage to the property.
(b) Chapter 187 is the legislative response
				to agreements made by manufacturers, distributors, or installers of a product
				or system, or other persons, that provide a pecuniary benefit to the purchaser
				or user of that product or system, if damage results from the failure of the
				product or system to perform as represented. For example, sometimes in
				connection with a lock or other security device, or where a vehicle is etched
				with a unique identification code, an agreement is provided by the
				manufacturer, seller, installer, or other person that provides for the payment
				of a specified sum in the event the vehicle is stolen. These agreements are not
				truly warranties or guarantees, but rather are insurance contracts within the
				meaning of Insurance Law, section
				1101 because there are intervening
				fortuitous events--in these examples, theft.
(c) Chapter 187 permits manufacturers,
				distributors, or installers of a product or system to make coverage available
				to consumers by purchasing newly authorized group insurance in connection with
				their products or systems. For example, a vehicle that is purchased with an
				applied or installed security product or system is subsequently stolen and not
				recovered. The manufacturer of the security product or system has obtained a
				product or system group insurance policy from an authorized insurer covering
				the owner of the vehicle. Under the owner's primary vehicle physical damage
				insurance policy, the owner receives the actual cash value of the vehicle less
				any deductible. In such a case, the product or system group insurance policy
				may cover the owner's deductible as well as the difference between the
				replacement cost of the vehicle and its actual cash value (e.g., the policy may
				cover the difference between the replacement cost of a new model year vehicle
				and the actual cash value of the stolen vehicle). In addition, there may be
				costs incurred to rent a temporary replacement vehicle and registration costs
				for a replacement vehicle. If not reimbursed under another insurance policy,
				these costs may be covered under the product or system group policy.
(d) Chapter 187 authorizes the superintendent
				to promulgate regulations regarding group product and system insurance
				policies, including provisions regarding policy cancellation and renewal,
				payment of premium, and minimum number of group members.