skip navigation


Medical Society of the State of New York v. Serio, 2003 N.Y. Int. 0113 (Oct. 21, 2003).




Whether, in an attempt to reduce fraud, the Superintendent of Insurance has the authority to promulgate new regulations regarding no-fault automobile insurance benefits.


Yes. Promulgation of the regulations was within the authority of the Superintendent: the regulations did not violate the separation of powers doctrine; did not exceed the Superintendent's authority to interpret or implement insurance law; did not improperly delegate rulemaking authority to private insurers; were in substantial compliance with the State Administrative Procedure Act; and were consistent with New York insurance law.


In 1977, the New York Superintendent of Insurance first adopted no-fault regulations establishing a ninety-day time frame in which an accident victim had to submit a notice of claim to the insurer; proof of medical expenses was to be submitted in 180 days, proof of work losses as soon as reasonably practicable, and proof of other necessary expenses within ninety days after services were rendered. Between 1992 and 2000, reports of no-fault insurance fraud rose more than 1700%, and accounted for more than 55% of all reports involving insurance fraud. In a 1999 effort to reduce fraud, the Superintendent proposed an amended regulation that reduced the time frames for filing notices and proofs of claim, finding that this would deter abuse and better effectuate the legislative purpose of providing prompt compensation. Just before the regulations were scheduled to take effect, Petitioners, by order to show cause, brought this proceeding seeking a declaration of invalidity under CPLR § 3001 and annulment of the regulations per CPLR Art. 78. Supreme Court concluded that the Superintendent had acted within the scope of his authority and jurisdiction and had promulgated the revised regulations in substantial compliance with the State Administrative Procedure Act ("SAPA"). The Appellate Division affirmed, as did the Court of Appeals.

In affirming, the Court stressed the Superintendent's broad power to interpret and implement legislative policy, and it emphasized that the Superintendent's "interpretation, if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision." See Matter of New York Public Interest Group, Inc. v. New York State Dept. of Ins., 66 N.Y.2d 444, 448 (1985). Here, the Court found that the Superintendent acted with legislative guidance and that his determination that these regulations would reduce fraud did not run counter to the clear wording of any statutory provision. Cf. Boreali v. Axelrod, 71 N.Y.2d 1 (1987) (holding that an administrative agency exceeded the scope of its constitutional authority in promulgating rules reflecting the agency's own assessment of proper public policy). Thus, the reduced time limits did not unlawfully create new exclusions from coverage, but rather simply established a condition precedent with which claimants must comply.

The Court further explicated that the Superintendent did not delegate rulemaking authority to private insurers, but rather himself promulgated the "rule" that late filings must be excused upon a "clear and reasonable justification" for the delay. Private insurers are merely instructed to take certain factors into consideration as they establish objective standards for reviewing late claims. These standards are "guidelines," not "rules" within the meaning of Art. IV, § 8 of the New York State Constitution or SAPA § 102(2)(a)(i), and therefore do not have to be filed with the Department of State. The Court determined that the Superintendent substantially complied with SAPA by soliciting public comments, assessing the impact of the regulations on small businesses and jobs, and completing a rural area flexibility analysis. Therefore, the Court rejected Petitioners' challenges and affirmed the decision of the Appellate Division.

Prepared by the liibulletin-ny editorial board.