In my previous article, I began a discussion of the spate of recent noteworthy changes to the statutes and regulations governing auto insurance.¹ Therein, I promised to continue that topic with a discussion of an even more recent set of amendments to the Supplementary Uninsured/Underinsured Motorists (SUM) Endorsement set forth in Regulation 35-D (11 NYCRR §60-2.3, et seq.), and an analysis and update on the proposed legislation pertaining to the required limits of SUM coverage, an earlier version of which was discussed in these pages several years ago.² Below is my attempt at keeping that promise.

Sixth Amendment to Regulation 35-D

Pursuant to the authority granted to her by §§202 and 302 of the Financial Services Law, and §§301, 307, 308 and 3420 of the Insurance Law, the Superintendent of Financial Services, Maria T. Vullo, recently promulgated the Sixth Amendment to Part 60-2 of Title 11 of the Official Computation of Codes, Rules and Regulations of the State of New York (Insurance Regulation No. 35-D), governing SUM coverage, which took effect on Aug. 1, 2017. Though less extensive and less dramatic than the changes to the Regulation 35-D SUM Endorsement enacted pursuant to the Seventh Amendment to Regulation 35-D, discussed in my prior article, which was enacted on June 29, 2017, as an emergency measure, the Sixth Amendment changes are significant in their own right. The most significant of these changes are summarized below.

New Illustration of SUM Arbitration

The Sixth Amendment adds to 11 NYCRR §60-2.2 (“Notice about SUM coverage”) a new (fifth) example illustrating the proper application of SUM coverage, which is required to be included in the written notice sent by the insurer with all new and renewal policies. That example, “Example Five,” which demonstrates the applicability of SUM coverage when an accident involves persons that are both injured and killed, and the SUM coverage on a combined single limit policy provides equivalent or greater benefits than the mandatory UM coverage, provides as follows:

Insured's Bodily Injury Damages $25,000

Passenger's Bodily Injury Damages $25,000

Another Passenger's Damages that resulted in death $50,000

Insured's Combined Single Limit (CSL) $75,000

Insured's CSL SUM Limit $75,000

Other Motor Vehicle Liability Limit Uninsured

(i.e., no coverage)

Result: Since the other motor vehicle was uninsured, the full $75,000 CSL SUM limit is available for all insured persons from this accident under the policy. However, since the accident involves insured persons who were both injured and killed, the mandatory UM limits of $25,000 per person and $50,000 per accident for injured persons, and $50,000 per person and $100,000 per accident for persons killed in the accident are available. Therefore, the insured and first passenger each recover $25,000 and the second passenger's estate recovers the full $50,000 under the SUM coverage.

If the insured's CSL and CSL SUM were each $300,000 and the insured's damages amounted to $200,000, then all insured persons would be covered under the SUM coverage as the total damages $200,000 + $25,000 + $50,000 = $275,000) are less than the $300,000 CSL SUM Limit.”

Amendments to the SUM Endorsement

Section 60-2.3(f), which contains the text of the prescribed SUM endorsement, has been amended, inter alia, by dividing Condition 2 (Notice and Proof of Claim) into subparagraphs (2)(i) and (2)(ii) for more clarity, and by clarifying references to the period of days within which the insurer is required to furnish proof of claim forms (i.e., 15), by changing the term “days” to “calendar days.” Conditions 5 (SUM Limits) and 6 (Maximum Payments) have been combined, and a new §5(a)(3) has been added to clarify the applicability of the SUM coverage when an accident involves persons that are both injured and killed. New subdivision (3) now provides as follows:

If an accident results in both bodily injury to one or more persons and the death of one or more persons, then we will provide the greater of the SUM limits stated in the Declarations or the limits required by the mandatory uninsured motorist (UM) coverage as follows:

$25,000 per injured person and, subject to this per person limit,

$50,000 to two or more persons injured as the result of any one accident; and

$50,000 per person for bodily injury resulting in death and, subject to this per person limit,

$100,000 to two or more persons for bodily injury resulting in death as the result of any one accident.”