Doctors who were members of a radiology group were notified, by separate notices from their radiology insurer, that their individual policies would not be renewed because of their claim history. Contending that they were not given sufficient notice, they sued the insurer, alleging that it breached an implied covenant of good faith and fair dealing. They appealed from a grant of the insurer's motion for summary judgment that dismissed the complaint.

The appeal court found that the insurer had complied with pertinent New York State law in all respects. The physicians received written notices of nonrenewal (with the reason given) more than the required 60 days before the expiration of their policies. The notices stated that loss information would be provided upon written request, and that the insurer would review the reasons for nonrenewal with the insureds.

The appeal court found that the decision of the insurer to not renew was based on underwriting criteria. The losses incurred were severe. The statutory requirements for notice were followed. The trial court judgment was affirmed in favor of the insurer and against the insureds.

Editor's Note: This case serves as an effective reminder that underwriters must follow statutory requirements to the letter when canceling or nonrenewing policies. That was done here. Insurance companies must (and do) keep abreast of state laws governing notice. Proper procedure is critical

for the buyer and the provider, especially with respect to insurance that must be very carefully underwritten.

(McCLEAVEY ET AL., Appellants v. PHYSICIANS RECIPROCAL INSURERS, Respondents. New York State Supreme Court, Appellate Division. No. 95-092272. October 7, 1996. CCH 1996 Fire and Casualty Cases, Paragraph 5899.)