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Liverpool, NY--Superintendent of Insurance Howard Mills joined Assemblyman Jeff Brown (R-Manlius) today to call on the New York State Assembly to pass tougher no-fault auto insurance fraud legislation and build upon Governor Pataki’s success in fighting insurance fraud across the state.

"When the Assembly returns to Albany next January, it is imperative that they finally pass tougher anti-fraud legislation," said Superintendent Mills. "Despite our great strides on behalf of policyholders and our fraud-fighting accomplishments, even more can be done to combat auto insurance fraud."

The New York State Insurance Department has approved this year a record number of auto rate reductions, saving policyholders almost $400 million. More than 20 auto insurers have reduced their rates an average of 5 percent in 2005, which means premium payments dropped for millions of New York drivers. This extraordinarily positive trend is the direct result of Governor Pataki’s successful efforts to crack down on no-fault auto insurance fraud and streamline the way in which claims are processed.

Under New York's no-fault law, a driver who suffers injuries from a motor vehicle accident is provided coverage for medical expenses and lost wages through his or her own insurance company, regardless of whether or not that driver was at fault. Only for certain serious injuries (as defined by law) may an injured party in New York sue an at-fault party for damages.

"I urge my former colleagues in the state Assembly to pass two measures—one aimed at those who send individuals to unethical health care providers and attorneys, the other targeting individuals who stage automobile collisions—which would build on the dramatic auto rate premium reductions that are occurring statewide," Superintendent Mills said.

"I believe strongly that these measures deserve the full attention of and passage by the State Assembly," said Assemblyman Jeff Brown (R-121st A.D.). "Enactment of these measures into law would mean lower automobile insurance rates for New York's consumers, many of whom are already struggling to pay for gasoline this fall."

Ending the Use of Runners

In an effort to crack down on the use of runners, the New York State Senate has passed every year since 2000 legislation that would make it a class E felony to act as a runner or to procure one. The term ‘runner’ refers to individuals who obtain clients, patients or customers for health care providers and attorneys who subsequently file fraudulent insurance claims.

Alice’s Law

Alice’s Law is another piece of legislation that was introduced and passed by the state Senate and would make it a crime to stage a motor vehicle accident with intent to commit insurance fraud. If the measure became law, those convicted of staging a motor vehicle accident and causing serious personal injury or death to another person would face class B felony charges. The Senate bill is named after the late Alice Ross, a 71-year-old grandmother who was killed in 2003 as the result of a staged auto accident in Queens.

The state Assembly has not acted on either one of the aforementioned state Senate proposals.

In other efforts on behalf of consumers, the Insurance Department instituted regulatory reforms which reduced to 45 days from 180 days the time in which medical providers must submit claims to insurers for payment and to 30 days from 90 days the timeframe for injured parties to file an injury claim. Both measures closed loopholes in Regulation 68 that had been exploited for fraud and abuse.

In another initiative that has the potential to save insurers and consumers money, the Insurance Department acted late last year to link durable medical equipment (e.g., neck braces, walkers) reimbursement costs to the fees as listed in the New York State Medicaid Management Information Provider Manual. Governed under Regulation 83, the sellers of durable medical equipment had billed auto insurers previously under rules that were open to interpretation.

"We have made great progress in cutting down on insurance fraud in this great state," stated Superintendent Mills. "But much more needs to be done, and the Insurance Department cannot do it alone. That is why I stand alongside Assemblyman Jeff Brown today and call on the Assembly to enact these two proposals."

Department of Financial Services


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