Justice Debra A. James
In an issue of first impression, the court questioned if Insurance Law §3428(d) required insurer Countrywide to refund to All Island, a premium finance company, gross unearned premiums in excess of payments made on the policy when it was canceled. It held §3428(d) imposed no such requirement, concluding Countrywide met its refunding obligation. All Island entered into an agreement with insured Gotham. Countrywide issued a motor vehicle policy to Gotham and received a $67,891 payment from All Island. Countrywide canceled the policy at All Island’s request. The court noted the dispute was over the amount of the refund Countrywide issued. All Island claimed as the gross value of the policy was $90,377, the total earned premium should be deducted from that, resulting in a gross unearned premium of $77,546 that should be refunded. The court agreed with Countrywide that §3428(d) required it to refund only amounts actually paid, finding All Island’s construction that the full price should be refunded, whether paid or not, illogical and contrary to the terms of §3428(d). Such interpretation would lead to a windfall where the full premium was neither paid by Gotham or All Island as Countrywide would be obligated to refund monies it never received.
