OPINION OF THE COURT
Kane, J. P.The issue to be resolved on this appeal is whether the holder of a perfected security interest in an automobile is entitled to payments arising from a policy of collision insurance upon destruction of the vehicle as the "proceeds” of collateral, pursuant to section 9-306 of the Uniform Commercial Code.
The pertinent facts are not disputed. On July 23, 1974, Lucy and Dennis Brady executed an installment note in favor of the plaintiff bank and, as collateral for the loan, Lucy Brady also executed a security agreement covering a 1970 Volkswagen owned by her. Among other things, the agreement provided that the debtor would furnish insurance on the secured property, naming the bank as the loss payee, and would assign payments resulting from a loss thereof to it. Plaintiff duly filed a financing statement in the office of the Orange County Clerk on July 26, 1974, and Dennis Brady obtained insurance on his wife’s vehicle from defendant. However, he apparently did not advise defendant of the bank’s interest in the subject automobile. On August 15, 1974 plaintiff requested that Mrs. Brady forward the required policy of insurance to it, but this request was ignored. The collateral was totally destroyed in an accident on January 18, 1975, and Dennis Brady thereafter completed and filed an accident report with defendant, which again failed to reveal the existence of any loss payee. Defendant paid $1,400 to Lucy Brady in full satisfaction of her claim on February 5, 1975, and this appeal ensued when Special Term granted plaintiff’s motion for summary judgment in its subsequent action for conversion.
At the time of the foregoing transactions, subdivision (1) of section 9-306 of the Uniform Commercial Code stated that:
*61" 'Proceeds’ includes whatever is received when collateral or proceeds is sold, exchanged, collected or otherwise disposed of. The term also includes the account arising when the right to payment is earned under a contract right.” In addition, subdivision (g) of section 9-104 sets forth certain matters then excluded from the provisions of article 9 and provided that: "This Article does not apply * * * (g) to a transfer of an interest or claim in or under any policy of insurance or contract for an annuity including a variable annuity”.
There is a conflict of authority in other jurisdictions on whether insurance payments due to the casualty loss of collateral are "proceeds” within the scope and intent of article 9 of the Uniform Commercial Code. (Cf. Quigley v Caron, 247 A2d 94 [Me] [holding they are not within article 9]; Universal C. I. T. Credit Corp. v Prudential Inv. Corp., 101 RI 287 with PPG Ind. v Hartford Fire Ins. Co., 531 F2d 58.) Although the question is one of first impression in New York, we favor the reasoning of the Court of Appeals for the Second Circuit in PPG Ind. v Hartford Fire Ins. Co. (supra), that the statute was intended to include insurance moneys received on a casualty loss as "otherwise disposed of’ collateral and that the exclusion contained in section 9-104 was designed to cover those more unique transactions where other forms or types of insurance are offered as collateral.
We reject defendant’s argument of nonfeasance on the part of plaintiff in not taking remedial steps after the Bradys did not respond to the request to submit proof of insurance. While it may have been better banking practice to do so, plaintiff was under no obligation to proceed since its protection under the statute was completed with the filing of the financing statement. Plaintiff properly pleaded an action in conversion, and Special Term correctly granted summary judgment (see AMF Inc. v Algo Distrs., 48 AD2d 352).
The order and judgment should be affirmed, with costs.