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TRAVELERS INDEMNITY COMPANY v. STATE NEW YORK (08/24/68)

COURT OF CLAIMS OF NEW YORK Claim Nos. 48813, 49547 1968.NY.42800 <http://www.versuslaw.com>; 293 N.Y.S.2d 181; 57 Misc. 2d 565 August 24, 1968 TRAVELERS INDEMNITY COMPANY, CLAIMANT,v.STATE OF NEW YORK, DEFENDANT Watters & Donovan (John P. Walsh of counsel), for claimant. Louis J. Lefkowitz, Attorney-General (Grace K. Banoff of counsel), for defendant. James H. Glavin, Jr., J. Author: Glavin


James H. Glavin, Jr., J.

Author: Glavin

 The claimant, a Connecticut insurance corporation, duly licensed to transact insurance business in the State of New York, seeks refund of alleged excesses of contributions charged by and paid to the Department of Insurance as contributions for the Motor Vehicle Liability Security Fund created by section 333 of the Insurance Law.

The State has moved to dismiss the claims on the ground that this court lacks jurisdiction, that the claims were not filed within the appropriate time periods, and that the claims fail to state a cause of action. These assertions are contested by the claimant.

The claimant has cross-moved for summary judgment pursuant to CPLR 3212. Answering the motion for summary judgment by claimant, the State reasserts that this court lacks jurisdiction and that the claims fail to state a cause of action. Additionally, the State objects to a granting of summary judgment by this court.

Section 333 of the Insurance Law creates the Motor Vehicle Liability Security Fund. That Fund is a security device created by statute to cover situations arising "by reason of the insolvency or inability" of casualty insurance companies to meet liability obligations.

Into that Fund an insurer, such as claimant, is obliged to periodically pay certain sums computed from "the amount of net direct written premiums" charged during the periods involved. The statute defines "net direct written premiums" as meaning "direct gross premiums written on policies, insuring against legal liability arising out of the ownership, operation or maintenance of motor vehicles which are principally garaged in this state, less return premiums thereon and dividends paid to policyholders on such direct business." The Commissioner of Taxation and Finance is specified by statute to be the "custodian" of the Fund and, as such, to invest and disburse the moneys of the Fund.

The Superintendent of Insurance is authorized by statute to adopt, amend and enforce such reasonable rules and regulations as are necessary for the administration of the Fund. The Superintendent is specifically empowered by statute to prescribe and furnish a form upon which insurers are to report the amount of "net direct written premiums" charged by them during each applicable period.

The subject claims arise from the fact claimant excluded from its returns and from its payments into the Fund those premiums received by it for so-called uninsured motorist coverage. (That coverage was required to be added to all New York automobile liability insurance polices by subdivision 2-a of section 167 of the Insurance Law, which was enacted in 1958.) The Superintendent of Insurance took the position such premiums should not be excluded from the calculations of claimant. Claimant thereupon on several occasions paid the disputed amounts to the Superintendent, carefully noting in each instance that such payment was made under protest. Typical language of protest uttered by the claimant is "Payment of this additional contribution is made under protest and without admission of liability therefor, and for the purpose of avoiding interest, penalties or other proceedings against this Company, and The Travelers Indemnity Company reserves all its rights to take any and all proceedings as to which it may be advised to obtain refund of the same."

All contentions and arguments of the parties on the respective motions revolve around questions of law. There is no dispute on any issue of fact.

The State's motion to dismiss is three-pronged, viz: (1) a lack of jurisdiction of this court, (2) failure to make timely filing of the claims, and (3) failure of the claims to state a cause of action.

The State's motion to dismiss is in all respects, denied.

It is the court's opinion the claims state causes of action and were filed in timely fashion.

The sole question posed in this case is one of law. Succinctly put, it is whether the payments required to be made by claimant are to be calculated on a basis which includes premiums attributable to uninsured motorist coverage.

The State challenges the jurisdiction of this court, arguing that claimant's relief, if any, should come under the ...


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