STATE OF NEW YORK
GEORGE E. PATAKI, GOVERNOR
July 7, 2004
GOVERNOR PATAKI ANNOUNCES REDUCTION IN AUTO INSURANCE RATES
Success of Anti-Fraud Measures Reaffirms the Need for Even Tougher Measures
Governor George E. Pataki today announced a two percent decrease in auto insurance premiums for drivers receiving coverage under the New York Assigned Risk Plan, which will result in lower insurance payments for more than 337,000 New York drivers. This decrease, along with other recently announced rate decreases, are the result of the Governor's efforts to fight auto insurance fraud. In making the announcement the Governor also called on the Assembly to act on legislation that would further reduce fraud and provide more savings to New York drivers.
"This rate reduction is proof that our efforts to fight fraud are working and New Yorks drivers will now see lower insurance premiums as a result," Governor Pataki said. "Three years ago we successfully enacted bold new initiatives to stop fraud and its clear that these efforts are a success. While these results are certainly encouraging and great news for New Yorks drivers, we must take the next step in our fight against fraud. The Assembly has before it legislation that has passed the Senate which can help fight fraud even further and they should act on it immediately. Fraud is paid for by all drivers and its time to further increase these penalties and continue lowering insurance costs in New York State."
In 2001, under the direction of the Governor, the New York State Insurance Department submitted a sweeping legislative and regulatory package to fight fraud and lower rates. The Governor also signed an Executive Order that named the Attorney General as Special Prosecutor to coordinate investigatory and prosecutorial efforts at the State level to combat auto insurance fraud.
The package led to additional initiatives by the Insurance Department to fight fraud. The Department places fraud investigators with the offices of District Attorneys throughout the state to strengthen a partnership between federal, state and local law enforcement in the fight against fraud. Regulation 68, which reduces the time limit for filing claims, has been a major tool in the fight against fraud and in 2003 was upheld by the Appellate Court. A record 811 frauds arrests were made in 2003, a strong sign that New Yorks anti-fraud efforts are working.
Additional legislation would further fight fraud by giving law enforcement more tools to fight fraud and placing stiffer penalties on the offenders. The legislation, which already has passed the State Senate and has the Governors support, includes:
Gregory V. Serio, Superintendent of Insurance, said, "Under Governor Patakis leadership, New York is on an aggressive crusade against insurance fraud and abuse. We are already on the path to lower rates, but still need stronger measures to attack fraud so even more New Yorkers will see their rates decrease. Laws making it a felony to stage accidents and hire "runners" to commit fraud will go a long way to stopping fraud abuse, and I echo the Governor's call that we need the Assembly to pass this legislation."
The Assigned Risk Plan consists of those policyholders who are unable to obtain insurance in the voluntary market. They generally have poor driving records, little or no prior driving experience, or a high frequency of claims. The rates and availability of automobile insurance are established by a competitive insurance industry, based on verifiable loss experience data, and monitored by the Insurance Department.