NEW YORK—District attorneys from all over New York gathered on the steps of City Hall in Lower Manhattan on Wednesday to propose new legislation to reform “no fault” insurance fraud.
“No fault insurance fraud has grown by leaps and bounds in recent years,” said Queens County District Attorney Richard Brown. “It is estimated at over $23 billion nationwide each year—and that cost is ultimately passed on to the consumer by ever-increasing insurance premiums.”
New York is ranked fourth in the country for the highest premiums. District Attorney Charles Hynes from Kings County said this is largely due to the “no fault” insurance fraud, which translated into an additional $200 million in insurance fees paid by New Yorkers in 2010, mostly coming from downstate. In New York City, drivers pay 272 percent more than the state average.
The “no fault” insurance allows the insured to file claims without identifying someone to blame for the accident. According to the Insurance Research Council, one in every five “no fault” auto insurance claims closed in New York last year had elements of fraud. The New York State Insurance Department’s 2010 Annual Report on Health Insurance Fraud cited 12,807 reports of “no fault”-related fraud, 88 percent of all health care insurance fraud cases.
Nassau County District Attorney Kathleen Rice said this has been a problem in all 62 counties in New York.
“We’re tackling this problem in Nassau County by creating an auto theft and fraud unit. It has specially trained officers and investigators who are charged with tracking [insurance fraud],” Rice said. “But even with that unit, Nassau County residents still pay 130 percent over the state-wide average.”
The legislation proposed by the district attorneys would make staging an accident a Class C felony. Steering people toward “no fault” medical clinics and lawyers for a fee would become Class D and E felonies, and medical providers convicted of “no fault” fraud would be prohibited from receiving the payments and be subject to civil penalties.
Under the current New York law, insurance companies are required to pay claims within 30 days, and the district attorneys want to be able to extend this period if they feel there is reason for suspicion.
Hynes said there have been many cases of “medical mills” that they closed, only to find them opening up weeks later under a different name. The proposed legislation would give the district attorneys the jurisdiction they need to properly prosecute these entities.
Brown said that a few years ago a third party was killed in the course of a staged accident, but the district attorney’s office was unable to pursue the offenders due to the limitations in the current law.
New Jersey has had an anti-“runner” law in place for 12 years, but New York has no criminal statutes dealing with “runners,” or those who stage accidents.
“Without real reform in Albany, criminals will continue to milk the system to their advantage and gouge the people of New York,” said Councilman Peter Vallone Jr.
Hynes said that with the exception of those committing fraud, the proposed legislation would be beneficial to all. There should be no reason to prevent an honest claim from being paid, he added, and without the fraud driving up insurance premiums, tax payers and rate payers would not be absorbing the extra cost.
The bill is currently under review in the state Senate and Assembly. “I think it has a terrific chance,” Hynes said.
“No fault insurance fraud has grown by leaps and bounds in recent years,” said Queens County District Attorney Richard Brown. “It is estimated at over $23 billion nationwide each year—and that cost is ultimately passed on to the consumer by ever-increasing insurance premiums.”
New York is ranked fourth in the country for the highest premiums. District Attorney Charles Hynes from Kings County said this is largely due to the “no fault” insurance fraud, which translated into an additional $200 million in insurance fees paid by New Yorkers in 2010, mostly coming from downstate. In New York City, drivers pay 272 percent more than the state average.
The “no fault” insurance allows the insured to file claims without identifying someone to blame for the accident. According to the Insurance Research Council, one in every five “no fault” auto insurance claims closed in New York last year had elements of fraud. The New York State Insurance Department’s 2010 Annual Report on Health Insurance Fraud cited 12,807 reports of “no fault”-related fraud, 88 percent of all health care insurance fraud cases.
Nassau County District Attorney Kathleen Rice said this has been a problem in all 62 counties in New York.
“We’re tackling this problem in Nassau County by creating an auto theft and fraud unit. It has specially trained officers and investigators who are charged with tracking [insurance fraud],” Rice said. “But even with that unit, Nassau County residents still pay 130 percent over the state-wide average.”
The legislation proposed by the district attorneys would make staging an accident a Class C felony. Steering people toward “no fault” medical clinics and lawyers for a fee would become Class D and E felonies, and medical providers convicted of “no fault” fraud would be prohibited from receiving the payments and be subject to civil penalties.
Under the current New York law, insurance companies are required to pay claims within 30 days, and the district attorneys want to be able to extend this period if they feel there is reason for suspicion.
Hynes said there have been many cases of “medical mills” that they closed, only to find them opening up weeks later under a different name. The proposed legislation would give the district attorneys the jurisdiction they need to properly prosecute these entities.
Brown said that a few years ago a third party was killed in the course of a staged accident, but the district attorney’s office was unable to pursue the offenders due to the limitations in the current law.
New Jersey has had an anti-“runner” law in place for 12 years, but New York has no criminal statutes dealing with “runners,” or those who stage accidents.
“Without real reform in Albany, criminals will continue to milk the system to their advantage and gouge the people of New York,” said Councilman Peter Vallone Jr.
Hynes said that with the exception of those committing fraud, the proposed legislation would be beneficial to all. There should be no reason to prevent an honest claim from being paid, he added, and without the fraud driving up insurance premiums, tax payers and rate payers would not be absorbing the extra cost.
The bill is currently under review in the state Senate and Assembly. “I think it has a terrific chance,” Hynes said.
