USCOA,2 No. 46
Allstate Insurance Company, Government Employees Insurance Company,
GEICO Casualty Company, GEICO General Insurance Company and GEICO
Indemnity Co.,
Respondents,
v.
Gregory
v.
Serio, in his capacity as Acting Superintendent of Insurance of the
State of New York,
Appellant.
_________________________________________________________________
2002 NY Int. 45
April 30, 2002
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Deon J. Nossel, for appellant.
Penny Shane, for respondent Allstate Insurance.
William P. Maloney, for respondents Government Empl., et al. United
Policyholders, amicus curić.
_________________________________________________________________
SMITH, J.:
The issue before us, brought by certified questions from the Second
Circuit, is whether various actions taken by the State Department of
Insurance, including the promulgation and distribution of the advisory
communication Circular Letter 4, complies with Insurance Law
2610(b). We conclude that they do not.
In the fall of 1992, the Department of Insurance initiated an
investigation in the Rochester area to determine whether insurance
companies were complying with Insurance Law § 2610(b), a State statute
that regulates "steering" of policyholders by automobile casualty
insurers to particular auto- repair shops with which the insurance
company has an established business relationship. The statute reads:
"In processing any such claim (other than a claim solely involving
window glass), the insurer shall not, unless expressly requested by
the insured, recommend or suggest repairs be made to such vehicle
in a particular place or shop or by a particular concern."(1)
SNIPPETS:
USCOA,2 No. 46 Allstate Insurance Company, Government Employees Insurance Company, GEICO
This opinion is uncorrected and subject to revision before publication in the New York
Penny Shane, for respondent Allstate Insurance.
The issue before us, brought by certified questions from the Second Circuit, is whether
In the fall of 1992, the Department of Insurance initiated an investigation in the Rochester
"In processing any such claim, the insurer shall not, unless expressly requested by the
Allstate employees would inquire whether claimants had a preferred repair shop.
In the event that a claimant expressed no preference, the Allstate employee would inquire
If the claimant answered in the affirmative, the agent would recommend a shop that was part
Allstate and the Department reached a settlement in which Allstate agreed to modify its
Specifically, Allstate agreed not to discuss, with certain exceptions, the selection of
therwise advertise any repair facility programs at its offices where claimants might be exposed.
Shortly thereafter, the Department issued an advisory communication to insurance companies,
"In consideration of the premium charged for coverage * * * you agree with us that, in the
Allstate and GEICO filed separate suits in the United States District Court for the Southern
Both plaintiffs sought injunctive relief and judgments declaring that section 2610violated
Additionally, Allstate sought to void the Settlement Letter, and GEICO requested that the
The District Court concluded that although "the State has a substantial interest in
The Second Circuit further noted that if this Court should conclude that neither Allstate nor
can the Department of Insurance prohibit the 'preferred repairer' clause proposed by GEICO
With respect to the third certified question addressing GEICO's proposed preferred repairer
the Department concedes that the following prohibitions on insurers contained in Circular
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