New York Consolidated Laws, Insurance Law - ISC § 5214. Default and consent judgments

(a) No claim shall be allowed and ordered to be paid by the corporation if the court finds upon the hearing for the allowance of the claim that it is founded upon a judgment which was entered by default or consent of the defendant.

(b) When the corporation receives notice of intention to enter judgment and intention to file a claim against the corporation and the time allowed for filing an answer has expired, the corporation shall be granted a reasonable time after the receipt of notice by it to answer and to defend the action.

(c) If upon a hearing for the allowance of any claim against the corporation the court finds that the judgment was entered by default or with the consent or agreement of the defendant it shall order that the judgment insofar as it affects the corporation be set aside and the corporation permitted to proceed in the action as provided above.