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The introduction of on-line technology into the fight against insurance fraud has helped the Department’s Frauds Bureau to manage the record number of fraud reports according to Superintendent of Insurance Gregory V. Serio.

The peak number of fraud reports received in 2001 have been handled effectively and expeditiously through the use of a new on-line remote system which allows insurers to report to the Department and cross-reference information with other reports containing common elements to better weed out fraud.

"The past 12-18 months have brought a sudden explosion in the number of insurance frauds reports and the Department has responded," said Serio. "We have met the challenges caused by increased reports of fraud. Now the legislature, particularly the Assembly, must get back to work to decrease the incidence of fraud."

The system is available to all insurers and currently 20 of the largest insurers are on-line. Once a report has been transmitted to the Department, the Frauds Bureau’s database provides the insurer with information on reports that share common elements such as name or address of suspect and vehicle identification number (VIN). Also provided is the name and phone number of contacts of other insurers that have similar reports. This allows all insurers to share information and coordinate investigations.

"By synchronizing all open fraud reports and investigations, insurers, law enforcement, and the Department pool their resources and more rapidly identify and dismantle fraud rings that take $1 billion of hard earned money annually out of every auto insurance policyholder’s pocket," said Serio.

The Fraud’s Bureau received 26,028 reports of insurance fraud in 2001, 58% (15, 219) in the area of no-fault alone. In 1999, there were 19,196 reports with 49% (9, 191) stemming from no-fault insurance fraud. From 1999 to 2001 there was a 66% increase in no-fault reports of insurance fraud. No-fault insurance fraud and abuse has become the number one rate driver in New York State’s auto insurance marketplace. In May of this year, the Department proposed the most comprehensive overhaul of auto insurance in New York State in almost 30 years to combat fraud, reduce auto insurance premiums, and ensure the continued affordability, accessibility and overall stability of the auto insurance market for the consumers of New York State.

The Department’s 2001 Annual Report of the Frauds Bureau will be available shortly on the web at

Department of Financial Services


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