Court Opinion

ID: 5783081
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:53:57.646064+00
Date Added: 2024-06-11T08:42:01.936676
License: Public Domain

Steuer, J. (dissenting).
The petitioner is an association of insurance underwriters created by statute (Insurance Law, art. 17-B) which defines its duties and obligations. Membership in the association is mandatory for all companies writing fire and extended coverage insurance in the State. The purpose of the association is to provide fire insurance for persons unable to obtain it in the open market. Risks, expenses and profits are apportioned among the member companies in a manner not involved in this application. The statute requires the association to submit a plan of operation to respondent Superintendent of Insurance. Such a plan was submitted and approved by him. The plan specifies the extent of the risk that must be assumed for any one location.
One Lester applied for insurance on the contents of a store located in a building at 281 West 125th Street. Lester was but one of several commercial tenants in the building. The maxi*388mum limit provided in the plan for .contents of a .store in a building of this character is $250,000. Lester applied for insurance in this amount and it was written. Thereafter he applied for $150,000 additional insurance. This request was refused. Lester appealed this decision to respondent as permitted by the statute (§ 655, subd. 1). Respondent directed that the additional insurance be written. The basis for respondent’s decision was that the store was located in a depressed neighborhood, employed 12 persons, mostly black, and that lacking the insurance this staff would have to he reduced. This proceeding followed.
An examination of the statute and the approved plan submitted pursuant .to it can leave little doubt that respondent’s decision and consequent direction were arbitrary. The plan provides that where insurance in excess of the amount provided for in the plan is .sought, petitioner’s underwriting committee ‘ ‘ may approve such additional amount of insurance as it may deem proper.” In making such a determination, as in all other determinations as to the amount of coverage to be supplied, the committee must use “ reasonable and objective underwriting standards ” (Insurance Law, § 652, subd. 3, par. [a]).
It thus appears in .the first instance .that the writing of insurance beyond the amounts provided for in the plan is discretionary with the petitioner’s underwriting committee, provided, of course that that discretion is exercised in accord with reasonable and objective underwriting practices. Secondly, the Superintendent in reviewing the committee’s action is hound to the same standard. Here the committee’s report on Lester’s application gives what appears to be ¡sound objective reasons from an underwriting standpoint for not increasing the risk. The Commissioner does not appear to quarrel with these reasons or fault them in any way. He overrules the determination on purely sociological grounds having nothing to do with a consideration of what was a reasonable risk to assume on this property and gives no consideration at all to the factors which should properly induce a finding of this nature.
Mabkewich, J. P., and Kupeermah, J., concur with Eager, J.; Steuer, J., dissents in an opinion.
Determination of respondent Superintendent of Insurance, dated October 15, 1970, confirmed, and the petition dismissed. Respondent Superintendent of Insurance shall recover of petitioner $50 costs and disbursements of the proceeding; and the appeal by respondent-appellant from the order of the Supreme Court, New York County, so far as appealed from, dismissed, *389without costs and without disbursements, on the ground that the order is nonappealable as of right (CPLR 5701, subd. [b]) and upon the further ground that the questions raised on such appeal are academic in view of the court’s aforesaid determination of the proceeding.