1. (a) Property damage threshold. An accident that does not result in aggregate damage to property in excess of $2,000 shall not result in the assignment of points or any surcharge under the rules of any merit rating plan. However, if an insured has two or more accidents involving any property damage during the experience period, a surcharge may be imposed.
2. (b) Comprehensive coverage and comprehensive claims. Comprehensive premiums may not be surcharged under any merit rating plan. Comprehensive claims may not be used to surcharge any other coverage.

3. (c) Claims for bodily injury. A surcharge may be imposed for an occurrence involving bodily injury (including a no-fault injury subject to article 51 of the Insurance Law), provided the motor vehicle was in operation and the insured was at fault. The establishment of a residual bodily injury liability reserve shall not in itself imply that the insured was at fault. An additional surcharge may not be imposed for bodily injury, if the accident which resulted in the bodily injury is already surchargeable under subdivision (a) of this section.

   1. (1) No points or surcharge may be imposed for an accident occurring under the following circumstances:

      1. (i) when the motor vehicle was lawfully parked;
      2. (ii) when the motor vehicle of the insured or other operator resident in the same household was struck in rear by another motor vehicle, and the insured or other resident operator has not been convicted of a moving traffic violation in connection with the accident;
      3. (iii) when the motor vehicle operated by the insured or other operator was struck by a hit-and-run vehicle, if the accident is reported to the proper authority within 24 hours by the insured or resident operator;
      4. (iv) when the insured or other resident in the insured's household operates a vehicle for hire or a motor vehicle other than a noncommercial motor vehicle, and the accident occurred while in the course of employment and said accident did not result in a conviction for a moving traffic violation;
      5. (v) when the insured has had an accident while operating, as an employee, a commercial motor vehicle in the course of employment and in the discharge of the employee's duties at the time of the accident, unless the accident is determined to have been caused by the intentional action or gross negligence of the insured. For purposes of this rule only, the term gross negligence shall not mean the insured's failure to refuse to drive or operate a commercial motor vehicle which has a defective condition that is known to the insured, provided the insured had reported such defective condition to the insured's immediate supervisor or employer; or
      6. (vi) when the insured or other resident in the insured’s household has had an accident while, pursuant to article 44-B of the Vehicle and Traffic Law, the insured or other resident in the insured’s household was logged onto a TNC’s digital network but not engaged in a pre-arranged trip or engaged in a TNC prearranged trip, and the accident did not result in a conviction for a moving traffic violation, unless the policy is providing coverage for such operation of the motor vehicle. If the coverage is provided pursuant to an endorsement, then the insurer may impose a surcharge on the separate premium for the endorsement.
   2. (2) An insured may not be charged in two or more ways for the same series of accidents and/or violations. However, as specified in Part 154 of this Title, an insurer may have a multi-tier rating program, each component of which shall meet the standards set forth in this Part. Movement from tier to tier shall not be considered merit rating for the purpose of this Part.

   (d) Other exceptions and restrictions.

4. (e) Upper limits to surcharges. Under additive type plans, the maximum surcharge that can be added to an insured's premium as a result of merit rating is three times the applicable total limits premium for the base (adult) class for the liability coverages (including personal injury protection), and three times the applicable base (adult) premium for collision coverage. Under multiplicative type plans, the maximum surcharge that can be added to an insured's premium as a result of merit rating is two times the otherwise applicable premium for liability (including personal injury protection) and collision coverages. The above rules should be complied with prior to any expense flattening.
5. (f) Multicar surcharge rule. In a multicar risk, i.e., where more than one motor vehicle is insured under a policy, the insurer may allocate the surcharge among any or all of the motor vehicles, but the aggregate surcharge shall be no greater than the amount of surcharge that would have been generated if only one motor vehicle were insured under the policy.

6. (g) Minimum percentage of reimbursement required for exemption from surcharge. An insured may not be surcharged for an incident for which that insured or the insurer has received reimbursement or a judgment, equal to one third or more of the value of the insured's property damage claim. For the purposes of this Part, the value of the property damage claim is defined as the lesser of the adverse carrier's or the insured's estimate.

   1. (1) All merit rating plans must contain a provision, applicable to present and former insureds, to refund the additional portion of the premium representing a merit rating surcharge in any of the following circumstances:

      1. (i) it is subsequently established that the accident for which a surcharge was applied falls under one of the exceptions enumerated in the insurer's merit plan;
      2. (ii) the conviction for a chargeable violation or traffic infraction is ultimately reversed;
      3. (iii) a surcharge was levied through mistake, carelessness, misinformation or other error;
      4. (iv) the insurer has established a reserve, but no claim was submitted for a period of three years after the date of the incident, or the statute of limitations has run and no suit has been filed.
   2. (2) All such refunds shall be the portion of the premium due to the surcharge for all policy periods since the inception of the surcharge. An insurer may refund the amount of the surcharge or credit the insured's policy. However, the insured shall have the option of receiving a dollar refund in lieu of a credit.

   (h) Refund of surcharge.

7. (i) Providing noncommercial motor vehicle insureds with clear notice of premium surcharges under merit rating plans. Where a policy has been surcharged under a merit rating plan, the insurer shall state prominently, either on the declarations page, on the premium bill, or on a notice accompanying the declarations page or premium bill, the following, or its substantive equivalent:

   “YOUR PREMIUM REFLECTS A SURCHARGE AND, THEREFORE, IS HIGHER THAN IT OTHERWISE WOULD BE BECAUSE, DURING THE MEASURING EXPERIENCE PERIOD WHICH APPLIED TO YOUR INSURANCE, YOU HAD ONE OR MORE CHARGEABLE ACCIDENTS OR CHARGEABLE TRAFFIC CONVICTIONS UNDER OUR MERIT RATING PLAN. THE ATTACHED DESCRIPTION OF OUR MERIT RATING PLAN INCLUDES A LIST OF EVENTS FOR WHICH WE MAY SURCHARGE YOU AND THE CIRCUMSTANCES UNDER WHICH SURCHARGES MAY BE REMOVED OR REFUNDED. IF YOU HAVE ANY QUESTIONS, YOU MAY (WISH TO CONSULT YOUR AGENT OR BROKER)* OR (CALL US AT COMPANY TELEPHONE NO. ____)^*”

8. (j) Rate surcharges to be expressed in dollar amounts. Where a policy has been surcharged under a merit rating plan, the insurer shall state prominently, either on the premium bill, on a notice accompanying the premium bill, or on the declarations page, the total dollar amount of such surcharge. This disclosure shall be made:

   1. (1) at the inception of each policy period;
   2. (2) at the time of any premium change during the policy period, where the dollar amount of the surcharge is changed; and
   3. (3) in no event less than once a year.

9. (k) Providing noncommercial motor vehicle insureds with notice of chargeable accident dates and conviction dates of chargeable violations. For all policies issued or renewed on or after July 1, 1992 (or, at the insurer's option, an earlier date), where a policy has been surcharged under a merit rating plan, the insurer shall state prominently, as part of the disclosure required by subdivision (j) of this section:

   1. (1) the date on which each chargeable accident occurred; and
   2. (2) the conviction date of each chargeable violation.
10. (l) Attachment of any applicable merit rating plan. All companies writing noncommercial motor vehicle liability or physical damage motor vehicle insurance are required to include, with the rating information form that accompanies all new and renewal policies, a merit rating description that clearly specifies the essential elements of the rules and classifications of the merit rating plan, including a statement informing insureds that if they receive any reimbursement or judgment, such should be reported to the insurer. This description should be clear enough so that an insured can be able to determine his/her merit rating classification, the surcharge level associated with this classification, the duration of the surcharge, the circumstances under which surcharges will be removed, etc.
11. (m) Exception from the above rules. The superintendent may exempt a merit rating plan from the requirement of meeting one or more of the above standards if the superintendent determines that the plan contains innovative features of sufficient merit, and that plan is, on balance, in the public interest.

The following procedures shall be applicable to all merit rating plans which are subject to the provisions of section 2334 of the Insurance Law.