N.Y. Vehicle & Traffic Law § 335: Security and proof required following accident

§ 335. Security and proof required following accident. (a) Not less

than ten days nor more than sixty days after receipt by him of the

report or notice of an accident which has resulted in bodily injury or

death, or in damage to the property of any one person in excess of one

thousand dollars, the commissioner shall forthwith suspend the license

of any person operating, and the registration certificates and

registration plates of any person owning, a motor vehicle in any manner

involved in such accident unless and until such operator (or chauffeur)

or owner or both shall have previously furnished or immediately

furnishes security sufficient in the judgment of the commissioner to

satisfy any judgment or judgments for damages resulting from such

accident as may be recovered against such owner or operator (or

chauffeur) by or on behalf of any aggrieved person or his legal

representative, and unless and until such owner or operator (or

chauffeur) or both shall immediately furnish and thereafter maintain

proof of financial responsibility in the future. Where erroneous

information with respect to insurance coverage of the owner or operator

(or chauffeur) of any such vehicle is furnished to the commissioner, he

shall take appropriate action as above provided within sixty days after

the receipt by him of correct information with respect to such coverage.

This section shall not apply: (1) to such owner or operator (or

chauffeur) if such owner had in effect at the time of such accident with

respect to such motor vehicle a standard provisions automobile liability

policy in form approved by the superintendent of financial services and

issued by an insurance company authorized to do business in this state

or, if such motor vehicle was not registered in this state or was a

motor vehicle which was registered elsewhere than in this state at the

effective date of the policy, or the most recent renewal thereof, an

automobile liability policy acceptable to the superintendent of

financial services as substantially the equivalent of such standard

provisions automobile liability policy; (2) to such operator (or

chauffeur), if not the owner of such motor vehicle, if there was in

effect at the time of such accident such a policy with respect to his

operation of motor vehicles not owned by him or, if such motor vehicle

was a private passenger motor vehicle, with respect to his operation of

private passenger motor vehicles not owned by him or (3) to such owner

or operator (or chauffeur) if the liability of such owner or operator

(or chauffeur) for damages resulting from such accident is, in the

judgment of the commissioner, covered by any other form of liability

insurance policy issued by an insurance company authorized to do

business in this state or by a bond, provided every such policy or bond

mentioned herein is subject, if the accident has resulted in bodily

injury, to a limit, exclusive of interest and costs, of twenty-five

thousand dollars or death to a limit, exclusive of interest and costs,

of fifty thousand dollars, because of bodily injury to or death of one

person in any one accident and, subject to said limit for one person, to

a limit of fifty thousand dollars because of bodily injury to or one

hundred thousand dollars because of death of two or more persons in any

one accident, and, if the accident has resulted in injury to or

destruction of property, to a limit of ten thousand dollars because of

injury to or destruction of property of others in any one accident or

(4) to such owner or operator if the commissioner shall determine that

the failure to have liability coverage as described above was caused

solely by the negligence or malfeasance of a person other than the

person whose license or registration has been suspended or is subject to

suspension, and that the person seeking to avoid such suspension was not

aware of the lack of such liability coverage. However, with respect to

the provisions of (4) above, the burden of proof shall be upon the

person seeking to avoid such suspension action. Provided further, that

such facts shall be established by clear and convincing evidence, either

by the submission of affidavits or at a hearing called in the discretion

of the commissioner.

Upon receipt of notice of such accident, the insurance carrier or

surety company which issued such policy or bond shall furnish for filing

with the commissioner a written notice that such policy or bond was in

effect at the time of such accident or shall notify the commissioner in

such manner as he may require in case such policy or bond was not in

effect at the time of such accident.

In case any such operator (or chauffeur) or owner has no license to

operate issued under this chapter or no motor vehicle registered in his

name in this state, he shall not be allowed a license or registration

until he has complied with this article to the same extent as would be

necessary if he had held an operator's or chauffeur's license and a

motor vehicle registration issued under this chapter at the time of the

accident.

(b) Such security, where ordered, shall be in such form and in such

amount as the commissioner may require, but in no case in excess of the

amount of proof required by section three hundred forty-one of this

article. The commissioner may reduce the amount of security ordered in

any case within six months after the date of the accident, if, in his

judgment, the amount ordered is too large. In case the security

originally ordered has been deposited, the excess deposited over the

reduced amount ordered shall be returned to the depositor or his

personal representative forthwith, notwithstanding the provisions of

subdivision (c) of this section.

(c) Security furnished in compliance with the requirements of this

section shall be placed by the commissioner in the custody of the

commissioner of taxation and finance and shall be applicable only to the

payment of a judgment against the depositor for damages arising out of

the accident in question in an action at law begun not later than one

year after the date of such accident or, upon assignment of the

depositor, made not later than one year after the date of such accident,

to the settlement of a claim arising out of such accident, or upon

assignment of the depositor, made after the expiration of one year after

the date of such accident, to the settlement of an action at law begun

not later than one year after the date of such accident. All of such

payments made out of the deposited security shall be made as follows:

Payment shall first be made to each of the judgment creditors and to

each of the claimants who have agreed to settle their claims, whose

damages were evaluated by the commissioner, in an amount not greater

than the amount fixed in their respective evaluations. Whenever the

commissioner shall be given evidence, satisfactory to him, that the

amounts of all claims for damages against the depositor arising out of

such accident are fixed, either by judgment or settlement agreement,

payment shall be made out of any balance remaining after the first

distribution to each of those persons whose judgments or settlement

amounts have not been fully paid but whose damages were evaluated by the

commissioner, in proportion to the amounts of their respective

evaluations unless there is sufficient to make payment in full; and any

balance remaining after the first and second distributions are completed

shall be paid to those judgment creditors and those claimants who have

agreed to settle their claims but whose damages were not evaluated, in

proportion to the amounts of their respective judgments or settlement

amounts unless there is sufficient to make payment in full. Such

deposit, or any balance thereof, shall be returned to the depositor or

his personal representative whenever after the expiration of such year,

the commissioner shall be given evidence, satisfactory to him, that

there is no such action pending and no such judgment unsatisfied or

whenever, before the expiration of such year, the commissioner shall be

given evidence, satisfactory to him, that there is no such judgment

unsatisfied and that there is no existing cause of action against the

depositor for damages arising out of such accident.

(c-1) After security, furnished in compliance with the requirements of

this section, has remained on deposit for five years, the commissioner

shall make a determination as to whether the deposit, or any balance

thereof, is returnable to the depositor or the person entitled thereto.

In the event that such deposit, or any balance thereof, is determined to

be returnable, but remains unclaimed by the depositor or the person

entitled thereto for a period of one year following the date of such

determination, such unclaimed deposit, or any balance thereof, shall be

deemed abandoned property subject to the provisions of the abandoned

property law.

(d) The provisions of subdivision (a) of this section shall not apply

to the owner of a motor vehicle operated by one having obtained

possession or control thereof without the expressed or implied consent

of such owner, to a police officer or member of the state police who is

compelled to assume the custody and operation of a motor vehicle of

another because such motor vehicle was (1) stolen from or lost by the

owner, (2) abandoned, either by the owner or any other person with or

without the owner's consent, (3) is being operated by a person disabled

so as not to be able to operate it properly, or (4) is being operated by

an intoxicated person; or to either the owner or operator of a motor

vehicle involved in an accident wherein no damage or injury was caused

to other than the person or property of such owner or operator.

(e) In lieu of deposit of security when required pursuant to the

provisions of this section the commissioner may accept a written

agreement, executed and acknowledged by the person required to deposit

security and any person who has sustained bodily injury, including

death, or damage to his property, or his legal representative, providing

for the payment of an agreed amount in installments, with respect to the

claims of such person for injuries or damages resulting from the

accident. In the event of default in payment of any installment under

such agreement, then upon notice of such default the commissioner shall

forthwith suspend the license and registration certificates and

registration plates of the person in default until release has been

filed with the commissioner indicating that the entire agreed amount has

been paid. But in no case shall such agreement be used in lieu of proof

of maintenance of financial responsibility in the future required

pursuant to the provisions of this section.