The opinion of the court was delivered by: John Gleeson, United States District Judge
FOR ONLINE PUBLICATION ONLY
Liberty Mutual Insurance Company ("Liberty") is a participant in the New York Automobile Insurance Plan ("the Plan"), by which automobile insurance providers doing business in New York are assigned the underwriting risk of applicants unable to obtain insurance in the voluntary market. Defendants Grand Transportation, Inc. ("Grand") and Ariel Transportation Corp. ("Ariel") are owner-operators of commercial transportation companies.
Defendant Large Auto Brokerage, Inc. ("Large Auto") is a licensed insurance broker certified by the Plan.*fn1
Liberty brings this action alleging that the defendants, seeking an artificially low premium rate, misrepresented key facts in an application for insurance submitted to the Plan and assigned by the Plan to Liberty. Liberty claims breach of contract (by Grand), negligent and intentional misrepresentation (by Large Auto and Grand), and unjust enrichment (of Ariel). Large Auto moves to dismiss Liberty's claims of negligent and intentional misrepresentation pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted.*fn2
Large Auto argues that (1) the Plan precludes a participant insurer's common law right of action against an insurance broker for misrepresentation, and in the alternative (2) the complaint does not sufficiently allege negligent or intentional misrepresentation.*fn3 For the reasons discussed below, the motion is denied.
Liberty is a Massachusetts corporation licensed by the State of New York to issue and service commercial motor-vehicle liability insurance policies. Compl. ¶ 2. The Plan compels Liberty, like all licensed motor-vehicle insurers in New York, to assume the underwriting risk for a proportionate share of the state's high-risk insurance applicants whose applications have been refused in the voluntary market. See id. ¶¶ 11, 13; see also N.Y. Ins. Law. § 5301(a) (providing that "[a]ll insurers licensed to write motor vehicle insurance in this state" shall assume an "equitable apportionment . . . of applicants for [motor vehicle] insurance who are in good faith entitled to [sic] but are unable to procure it through ordinary methods").
Five characteristics of the Plan are relevant to the motion before me. First, the Plan requires insurance brokers to ensure that their clients' applications are complete and accurate to the best of the broker's knowledge. See Compl. ¶ 37; see also Plan Sec. 15A(1)(a); id. Sec. 15A(1)(c). Second, the Plan is centralized: licensed insurance brokers submit applications to the Plan, and the Plan in turn assigns the applications to a servicing carrier (i.e., a participant insurer). See id. ¶¶ 11, 12, 16. Accordingly, a broker does not know ahead of time which participant insurer will accept the broker's application. See id. ¶ 17. Third, the Plan is compulsory: a servicing carrier cannot refuse an assigned application. See id. ¶ 13. Fourth, the Plan requires insurers to audit their assigned risk. See Plan Sec. 15(16)(c) (providing that a Plan insurer must "[c]onduct an underwriting review of each taxi/limousine risk . . . to confirm usage, location, and drivers"); see also Panepinto v. Allstate Ins. Co., 439 N.Y.S.2d 240, 242 (Sup. Ct. 1981) ("[T]he New York State Automobile Insurance Plan imposes upon the insurer the obligation to promptly investigate the risk.") (citing Aetna Cas. & Sur. Co. v. O'Connor, 8 N.Y.2d 359, 364 (1960)). Accordingly, while a carrier's initial premium estimate is generated entirely from information provided in the application by the insurance broker, see Compl. ¶ 16, once the policy is issued, the carrier will investigate the assigned risk and re-rate the premium, if necessary. See id. ¶ 32; see also id. ¶¶ 25, 31 (describing Liberty's investigation and re-rating in this case). Fifth, Plan premiums for public automobile transportation companies depend upon, inter alia, the number of vehicles covered, the location and radius of the operation of the vehicles, and the classification of the vehicle's use. See id. ¶ 14.
Liberty alleges that Large Auto submitted an application for motor vehicle insurance on behalf of Grand to the Plan; the Plan, in turn, assigned the risk to Liberty. Id. ¶ 18. Grand's application represented that it operated an airport limousine service headquartered in White Plains, New York. Id. ¶ 19. Large Auto stated in the application that it had "read the New York Automobile Insurance Plan, [had] explained the provisions to [Grand], and [had] included in th[e] application all required information given to Large Auto by [Grand]." Id. ¶ 36.
As required, Liberty issued a one-year policy for Grand, with premiums calculated by reference to the claimed geography and classification. See id. ¶ 21. The policy provided that this premium was an estimate, subject to possible change after Liberty's audit of the representations in the application. Id. ¶ 32.Before that audit, two additions were made to the policy. First, on the request of Large Auto and Grand, Liberty endorsed Ariel as an additional insured. Id. ¶ 22. Second, on the request of Grand through Large Auto, Liberty added additional Ariel vehicles to the policy. Id. ¶ 23.
Liberty alleges that Large Auto "knew, or should have known," that Liberty would issue its policy at an improperly low rate "based on the information contained in the applications." Id. ¶ 51. In the alternative, Liberty alleges that Large Auto submitted misrepresentations "with the intent to induce Liberty Mutual to issue the respective insurance policies at a substantially lower rate then [sic] would have been charged if Grand Transportation and Large Auto had truthfully and accurately disclosed" the relevant information. Id. ¶ 56.
Once Liberty investigated its assigned risk, it discovered that Grand actually operated a "for hire" transportation service, not an airport limousine service, which was headquartered in metropolitan New York, not White Plains. See id. ¶¶ 20, 25. Plan premium rates for airport limousine service classifications and operations headquartered in White Plains are lower than rates for "for hire" services in metropolitan New York. See id. ¶¶ 20, 30. Accordingly, Liberty re-rated the insurance policy issued to Grand. Id. ¶ 31.
Out of the re-rated premium of $441,974, plus $205 and $15 in assessments and fees, Grand has paid only $184,397.30. The outstanding amount of $257,796.70 remains due, and Grand "has failed and/or ...