While Albany Bickers, N.Y.’s Fraud Reforms Go Nowhere … Again

Albany continues dawdling over urgently needed fraud reforms year after year. Lawmakers have failed to pass even a modest law that might reduce the huge toll of accident rings.
You have to wonder what Alice Ross’ final terrified thoughts were as her car crashed into a telephone pole in Queens last March.

The 71-year-old grandmother died in a staged accident that went terribly wrong in March 2003, police believe. No one can bring Alice back. But the New York legislature can stop dithering and start clamping down on violent staged-accident rings that are causing so much mayhem in the state.

Staged accidents are bilking drivers in New York out of hundreds of millions of dollars in higher auto premiums through phony injury claims a year. These crime rings also threaten the lives and safety of innocent motorists, like Alice Ross.

But Albany continues dawdling over urgently needed fraud reforms year after year. Lawmakers have failed to pass even a modest law that might reduce the huge toll of accident rings.

Turf wars, political grandstanding and personal mistrust among the Senate and Assembly leaders have ground even modest reforms to a halt.

And this year is more of the same. Once again Albany is considering bills making it a crime to be a runner. These are the recruiters, or street bosses, for staged accident rings. Runners hire the so-called car passengers who make the phony injury claims from the setup car accidents.

Leaders in both the Senate and Assembly agree an anti-runner law is highly desirable. It’s a modest start in clamping down on violent staged accident rings. This white-knight reform carries little controversy, and should be a no-brainer.

Their proposals aren’t even very far apart. The Senate version makes it a felony both to be a runner, and to hire one. The Assembly eases up a bit, making it a misdemeanor to be a runner.

Related anti-fraud reforms also would give insurers more time to investigate suspicious claims, and would forbid medical providers convicted of felonies from receiving insurance money for treating accident victims. Here, too, the bills have small and manageable differences.

None of the differences, however, are deal breakers. Reforms can be hammered out this spring—if Senate and Assembly leaders can muster the courage and will.

The Assembly, especially, is blocking any deal by demanding that fraud bills include a state-funded advocate to represent consumer interests before the insurance department. That’s the only true deal breaker.

Whatever you think of the consumer advocate, however, it’s not a fraud issue. Rather, it’s a polarizing and divisive consumer issue that inflames people across the political spectrum in New York. Clinging to the advocate will doom any fraud reforms for yet another year.

Assembly leaders should drop the consumer advocate from anti-fraud bills, deal with it separately, and let anti-runner reforms move through the pipeline without further delay.

Tough fraud laws are urgently needed. Other states, when confronted with spreading staged accidents, seem to get it.

Right across the river, New Jersey has passed several tough anti-fraud laws—including making it a crime to be a runner.

In fact New Jersey is getting so hostile that some staged accident rings there have bolted to New York, where they think it’s easier to operate, some law-enforcement officials quietly say.

Anti-runner laws also have been enacted, or are being enacted, in Massachusetts, the District of Columbia, California, Florida and even Utah.

So here’s the message: Honest citizens don’t want to see their auto premiums keep rising because of phony injury claims by greedy fraud rings. People also want safe streets, free of predatory staged accident that can injure and kill.

Albany’s endless feuding won’t get us there. It’s time to stop bickering, and start governing.

How many more Alice Rosses must die before Albany finally gets it?

A Brooklyn native, Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud. The coalition is a national alliance of insurers, consumer organizations and state agencies combating all forms of insurance fraud. Visit www.InsuranceFraud.org. Goldblatt can be reached at (202) 393-7332 or howard@InsuranceFraud.org.