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The New York State Department of Financial Services today proposed a six-month extension to a special coverage arrangement for vehicles used by drivers for transportation network companies (TNCs) such as Uber and Lyft. The proposal was published in the October 3, 2018 issue of New York State Register, the publication for all rule making activities by state agencies.

When the New York State Legislature and Gov. Andrew Cuomo enacted the law in 2017 to legalize TNC operations, the DFS issued regulations to address the insurance requirements. One of those regulations stated that, until Jan. 1, 2019, auto liability coverage under group policies issued to the TNC's would apply on a primary basis to losses occurring when a driver was operating as a TNC driver. The individual driver's liability coverage would apply excess over the group policy's coverage. This is the reverse of the way coverage normally applies. Ordinarily, the vehicle owner's coverage is primary and other coverage is excess.

The DFS adopted this rule in order to give New York licensed insurers to file and obtain regulatory approval for personal auto coverage forms and endorsements that would either provide or exclude coverage for individual TNC drivers.

The amended rule the DFS proposed today would extend that coverage arrangement for six months, until July 1, 2019. According to the notice:

This amendment extends from January 1, 2019 to July 1, 2019 the date until which a group policy must provide that the group policy is primary to give insurers more time to revise and implement their new policy forms. Many insurers waited to start making changes to their motor vehicle liability insurance policy forms to exclude coverage for using or operating a motor vehicle as TNC vehicle until the Department had adopted the final regulation in October 2017. It takes time for an insurer to amend and file its policy forms with and receive approval from the Superintendent, and then for the insurer to actually implement the policy form changes. In addition, the Insurance Law prohibits an insurer from amending the terms of a motor vehicle liability insurance policy mid-contract. Rather, an insurer only may change the terms of an insurance policy upon the renewal date, which is usually annually. Furthermore, the Insurance Law requires an insurer to provide sufficient advance notice to an insured of any changes to the policy terms. Thus, many insurers may not have sufficient time to revise and implement their new policy forms by January 1, 2019.

The department is accepting public comments on the proposed change until Dec. 2, 2018. Adoption or rejection of the rule will follow at an undetermined time following that date.

For more information on TNCs, visit the Ridesharing page in the Technical Answer Center of this website.