Skip to Content



Superintendent says reform is needed to keep auto insurance affordable

To help keep New Yorkers’ automobile insurance premiums from skyrocketing, the regulation governing no-fault auto insurance needs to be revised to more effectively combat abuse and fraud, Insurance Superintendent James J. Wrynn said today. After extensive consultation with all stakeholders, Wrynn issued a draft of revised rules covering no-fault automobile insurance that aim to help reduce fraud and abuse associated with no-fault claims, while making the no-fault system more user-friendly.

“Especially in these difficult economic times, we have to be vigilant in protecting the pocketbooks of consumers. New Yorkers should not have to pay a fraud and abuse tax in their auto insurance premiums,” Wrynn said. “The cost of each no-fault claim has gone up by more than half in the past five years, and all New Yorkers with auto insurance are paying that tab.

“Protecting consumers means stopping those who would exploit the system for personal gain and unnecessarily drive up costs for all New Yorkers. No-fault reform is desperately needed, and this proposed regulatory reform is a step toward that goal.”

No-fault automobile insurance allows an accident victim to collect directly from his or her insurance company for medical and hospital expenses and lost wages, regardless of who was at fault. Regulation 68, which implements New York’s no-fault law, was first promulgated in 1974. This will be the first significant revision to that regulation since 2002.

One of the most significant forces increasing automobile insurance claim costs has been the explosion of filings in the court system of disputed no-fault claims by providers of health services. This has overwhelmed the courts and led to long delays in the resolution of these disputes and to the payment of unnecessary claims, undermining the very purpose of the no-fault system.

The proposed revised regulation would modify prescribed forms to require more information, helping to ensure that claims paid are medically necessary. That also would reduce the need for additional verification by the insurer, thus hastening insurer claims processing and legitimate payments to consumers. Insurers would have greater latitude to deny health services that are not provided or are not billed in compliance with the applicable fee schedule. This would reduce payment of fraudulent claims and instances of overbilling.

Another provision addressing fraud would simplify procedures required for insurers to suspend all payments for claims submitted by the owner or owners of medical clinics suspected of fraud while an investigation of the clinics’ licensing status is underway.

Other provisions would directly benefit insureds. Insurers would have to schedule medical examinations they request so as not to overly burden the insured. For example, examinations may not be scheduled in geographically inconvenient locations, and multiple exams may not be scheduled on the same day.

The proposed regulation would also raise the maximum attorney fee to reflect inflation and to help ensure adequate representation for applicants and assignees, and eliminate the minimum attorney fee to encourage the consolidation of claims in arbitration and litigation.

“These regulatory changes are just one part of the no-fault reforms needed,” Wrynn said. “We also need legislative remedies.”

Areas that would require legislative action to address include:

  • Improper activities by health providers: Currently an insurer who does not deny a claim within 30 days must pay that claim, whether or not the claim turns out to be fraudulent or abusive. That encourages unscrupulous individuals and providers to flood the system with multiple claims, knowing any claims not denied within 30 days will have to be paid. Legislation to curtail such abuses would go a long way to keeping no-fault costs down.
  • Steering: Improper and illegal activity, including staged accidents, appears to be on the rise. Consideration should be given to legislation providing tools to better police improper activities by health providers and claimants.

“We stand ready to work with interested parties and with the Legislature to protect New York drivers from waste and fraud,” Wrynn said. “The Department has stepped up the fight against no-fault fraud, and we will continue to fight fraud with all the tools at our disposal.”

Combating fraud remains an important part of mitigating the increase in auto insurance costs. The Department’s Frauds Bureau has formed a specialized unit dealing exclusively with no-fault fraud. No-fault fraud is often perpetrated by highly organized criminal entities that can include corrupt medical clinics and corrupt attorneys. This activity has increased over the past few years. The Bureau has received more than 11,000 complaints alleging no-fault fraud this year to date, which is a seven percent increase over the total for all of 2008. The number of no-fault arrests in 2008 was 52% greater than in 2007.

The working document containing the proposed revisions to Regulation 68, the regulation that governs the no-fault automobile insurance claims process, is available at This document has been issued to various stakeholders in the no-fault system for review and comment. The release of the draft follows an intensive review of Regulation 68 by the Department’s Office of General Counsel and its Property Bureau, including meetings with representatives of insurers, health professionals, trial lawyers, health service providers and other stakeholders.

This is the first step of the regulatory process. Modifications to this draft may be made based on the feedback received before the proposed revisions enter the formal regulatory approval process, which will also include a statutorily-prescribed comment period.

Comments on the draft may be sent to the Department through its website,, or e-mailed to, on or before January 8, 2010.


Department of Financial Services


DFS Facebook page

Follow NYDFS on Twitter


Sign up online or download and mail in your application.