Court Opinion

ID: 6069812
Source: CourtListenerOpinion
Date Created: 2022-01-13 16:57:46.037657+00
Date Added: 2024-06-11T08:52:51.780772
License: Public Domain

Goldstein, J.,
dissents and votes to affirm the order appealed from, with the following memorandum: From July 1995 until July 1996, Elsie C. Daniels was covered by an Assigned Risk Policy issued under the New York Automobile Insurance Plan (hereinafter, the assigned-risk plan). The rules of the assigned-risk plan constitute “a comprehesive regulatory scheme which supplants the rights and liabilities of parties to an ordinary insurance contract” (Matter of Bowley Assocs. v State of N. Y. Ins. Dept., 98 AD2d 521, 526, affd 63 NY2d 982). Assigned-risk plan contracts are special relationships subject to immediate oversight and supervision by the Superintendent of Insurance (see, Coling Ambulette Serv. v Empire Ins. Co., 262 AD2d 187).
Under the assigned-risk plan, an insured is assigned to a designated insurance carrier for three consecutive years (see, New York Automobile Insurance Plan § 13). The insured receives an initial one-year policy, renewable for two one-year periods. If the renewal premium is not received by the 20th day prior to the expiration of the first or second year, the rules of the assigned-risk plan state that “the insurer shall issue a notice of termination in compliance with the Vehicle and Traffic Law” (New York Automobile Insurance Plan § 14 [B], note 1). The rules further provide: “In the event the insurer will not issue a renewal policy, a statement of the specific reasons therefore, together with a copy of said notice, shall be filed with the Superintendent of Insurance of the state and the Plan” (New York Automobile Insurance Plan § 14 [B]).
When Daniels’s assigned risk policy was due for its first re*454newal in July 1996, she failed to pay the premium, and coverage was terminated. However, the insurance carrier Colonial Penn Insurance Company (hereinafter Colonial Penn) failed to file a notice of termination with the Commissioner of Motor Vehicles, nor did it notify the Superintendent of Insurance or the assigned-risk plan.
Failure to file a notice of termination with the Commissioner of Motor Vehicles when one is required renders the attempted termination ineffective with respect to third parties (see, Matter of Liberty Mut. Ins. Co. v Vidale, 207 AD2d 489; Matter of Eveready Ins. Co. v Wilson, 180 AD2d 796).
Colonial Penn claims that filing of the notice of termination with the Commissioner of Motor Vehicles was not required, citing Vehicle and Traffic Law former § 313 (2) (a). Vehicle and Traffic Law former § 313 (2) (a) provided that “[t]he non-renewal of a policy which has been in force for at least six months shall not be considered cancellation or termination.” That provision was added by Laws of 1983, chapter 781, § 3, to address concerns that the computer system of the New York State Department of Motor Vehicles could not accurately keep track of “all policy additions and terminations” (1983 NY Legis Ann, at 334), and was repealed in 1998 because more accurate record-keeping was possible (1998 NY Legis Ann, at 321; L 1998, ch 509).
Colonial Penn further claims that there is no case law stating that it is required to notify the assigned-risk plan in the event that it decides not to issue a renewal policy. However, the rules of the assigned-risk plan clearly state that it is required to provide this notice.
The Supreme Court determined that Colonial Penn was required to both file the notice of termination with the Commissioner of Motor Vehicles, and notify the assigned-risk plan of the nonrenewal of the Daniels policy. The Supreme Court noted that an insured’s assignment by the assigned-risk plan to a designated insurer is for three consecutive years, including “the initial issuance of the policy, plus two renewal periods” (New York Automobile Insurance Plan § 13). The court found that both the Commissioner of Motor Vehicles and the assigned-risk plan would want to know “whether this vehicle is being insured, or whether it had been terminated.” Indeed, it is apparent that denial of renewal of an assigned-risk policy would generally mean, not that coverage was replaced, but rather, that coverage was terminated.
This Court has held that requirements for cancellation of an assigned-risk policy within the three-year period must be *455strictly complied with (see, Matter of Eveready Ins. Co. v Hadzovic, 182 AD2d 818). In this case, Colonial Penn failed to comply with the rules of the assigned-risk plan. The rule that requires that termination notices be issued in compliance with the Vehicle and Traffic Law refers to the form and content of the notice, not who must be notified. To hold otherwise would render significant portions of the rules of the assigned-risk plan meaningless. It is well settled that provisions of a regulatory scheme or contract should be interpreted to give effect to all language employed, to render all parts consistent with each other (see, Wallace v 600 Partners Co., 86 NY2d 543; Ferrin v New York State Dept. of Correctional Servs., 71 NY2d 42). Colonial Penn’s interpretation of the rules of the assigned risk plan would render entire provisions meaningless.
In the instant case, there was a complete failure to comply with the notification provisions of the assigned-risk plan. Accordingly, the termination of insurance was ineffective.