|Assembly passes legislation to drive down auto insurance rates Measure cracks down on insurance fraud|
The Assembly has approved a measure
(A.8654-D) to help
protect consumers from run-away auto insurance rates
by cracking down on fraud –– a crime that costs New
York drivers more than $1 billion per year.
Auto insurance rates in New York have skyrocketed
over the past five years due to exploitation of the
state’s no-fault insurance law. As a result, New York
now has the dubious distinction of ranking second in
auto insurance rates, and unfortunately we have a
real chance at taking over the top spot if something
The bill creates a balance by giving law enforcement,
regulators and insurers the tools they need to crack
down on fraud, while including checks against abusive
Providing immediate rate reliefThe Assembly legislation calls for a freeze on auto insurance rates until January 1, 2003, a 17 percent reduction in personal injury premiums to ensure consumers see the savings expected from the reform, and includes measures to hold both insurers and those defrauding the system more accountable. Insurers who do not meet the target decrease would need to provide a detailed explanation to the State Insurance Department (SID). The bill also requires an audit of insurer compliance with the excess profits law.
"The reforms and measures proposed in this legislation
will go a long way towards addressing spiraling
insurance costs and we urge that these reforms are
enacted this session.
"If these reforms are not enacted, the current fraud
crisis will worsen and New York motorists will be
burdened with the highest auto insurance costs in the
AAA New York State
Combatting fraudThe bill creates a special fraud prosecutor and allows local district attorneys to conduct more investigations and prosecutions using $2.2 million set aside in the Assembly’s budget proposal. It also creates an Independent Office of Public Insurance Consumer Advocate to represent the interests of auto and health insurance consumers in rate hearings and other matters before the Insurance Department, based on an effective Texas model. To help insurers detect phony bills earlier, the Assembly measure would provide for stricter accounting of medical costs incurred for injured drivers and passengers by setting a 30-day deadline for health care providers to send notice of initial medical treatment and a 60-day billing deadline. In addition, it creates felony level penalties for "runners" –– individuals who recruit clients and facilitators to stage accidents for the purpose of scamming insurers.
Ongoing efforts to help working families keep more of their hard-earned dollarsPutting a lid on auto insurance costs builds on the Assembly’s commitment to make New York State a more affordable place to live and raise a family. The Assembly has consistently worked to lower energy costs, and has cut taxes by nearly $13 billion since 1994 for businesses and working families. We recently passed far-reaching legislation addressing New York’s energy crisis and protecting consumers from soaring prices. The measures lower energy costs –– including gasoline –– for consumers, and help create jobs in communities across the state.
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