Jonathan A. Dachs
New York Insurance Law §3420, with its several varied provisions, including, inter alia, those pertaining to direct actions against insurers to collect on unsatisfied judgments, notice to the insurer, disclaimers, prejudice, uninsured and underinsured motorist coverage, and interspousal liability coverage, is undoubtedly one of the most important and frequently cited and relied upon statutory provisions in insurance disputes and litigation.
Recent case law has addressed an interesting question regarding whether the direct action and disclaimer/denial of coverage provisions of Insurance Law §3420 are applicable to “risk retention groups” chartered in another state. Stated otherwise, the question presented in these cases is whether these pertinent provisions of Insurance Law §3420 are pre-empted by the Federal Liability Risk Retention Act of 1986, 15 U.S.C. §3901, et seq. (LRRA).
