IN THE MATTER OF JOHN PATERNO, INC. &C., ET AL., RESPONDENTS-APPELLANTS, v.
SALVATORE R. CURIALE, AS SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW
YORK, APPELLANT-RESPONDENT.
88 N.Y.2d 328, 668 N.E.2d 395, 645 N.Y.S.2d 424 (1996).
June 6, 1996
1 No. 140 (1996 NY Int. 123)
Decided June 6, 1996
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Vincent Leong, for Appellant-respondent.
Kevin J. Spencer, for Respondents-appellants.
CIPARICK, J.:
This appeal centers on a determination by the Superintendent of
Insurance of the State of New York that petitioners violated Insurance
Department Regulation 121 (11 NYCRR part 73) by placing claims-made
liquor liability policies in New York through an excess line broker.
Petitioners commenced this CPLR article 78 proceeding challenging the
Superintendent's finding that petitioners violated Regulation 121 a
total of 1,497 times and that petitioners demonstrated
"untrustworthiness" within the meaning of Insurance Law § 2110(a), and
seeking to vacate the penalty imposed by the Superintendent of $45 for
each violation for a total fine of $67,365. We conclude that the
Superintendent's determination should in all respects be upheld.
I.
Petitioners John Paterno, Inc., by John V. Paterno as sublicensee and
principal, and John V. Paterno individually (collectively, Paterno),
are licensed by the State of New York as an insurance agent, broker
and consultant. Among other things, Paterno brokers liability
insurance policies for owners of New York restaurants, bars and
taverns. Starting in 1985, the market to place insurance risks for
restaurant, bar and tavern owners in New York contracted, causing
Paterno to turn to excess line brokers, which are entities statutorily
permitted under certain conditions to procure insurance from insurers
not authorized to do business in New York (see, Insurance Law
2105(a), 2117(h)). Specifically, during the period 1987 through 1991,
Paterno, acting as the broker for various New York establishments,
used an excess line broker, V.P. Management, to procure claims-made
SNIPPETS:
IN THE MATTER OF JOHN PATERNO, INC. &C., ET AL., RESPONDENTS-APPELLANTS, v. SALVATORE R.
This opinion is uncorrected and subject to revision before publication in the New York
This appeal centers on a determination by the Superintendent of Insurance of the State of New
Petitioners commenced this CPLR article 78 proceeding challenging the Superintendent's
Among other things, Paterno brokers liability insurance policies for owners of New York
Starting in 1985, the market to place insurance risks for restaurant, bar and tavern owners
Specifically, during the period 1987 through 1991, Paterno, acting as the broker for various
Claims-made policies provide liability coverage only when a claim is made against the insured
The claims-made policies involved in this proceeding--claims-made liquor liability
As a general rule, the Insurance Law prohibits the sale in New York of insurance underwritten
The Superintendent also determined that Paterno's repeated violation of Regulation 121
Upon transfer from Supreme Court, the Appellate Division upheld the Superintendent's finding
However, the Superintendent's interpretation of Regulation 121, "if not irrational or
The Superintendent's interpretation is not irrational or contrary to statute and accords with
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