New York Fraud Convictions Reach New High

January 22, 2001

New York Superintendent of Insurance Neil D. Levin announced that the department’s year-end fraud fighting statistics show that arrests and criminal convictions reached an all time high. In 2000, arrests increased almost 30 percent and there was a 64 percent increase in criminal convictions.

In 1996, Governor George E. Pataki championed a program bill that increased penalties for workers’ compensation fraud and required the creation of special fraud investigation units be set up by all insurers. That same year, the crime of Aggravated Insurance Fraud was made a felony if a person has been convicted within the preceding five years of any fraudulent insurance act.

In 1998, a Governor’s program bill amended the insurance law requiring HMO’s to create special fraud investigation units, and the Children’s Health Insurance Plan bill was passed adding a new section to the insurance law making it a crime to submit written or other physical evidence in support of a claim that is fraudulent. In 1998, the Department issued a directive requiring all insurers in the state to file a fraud prevention plan. In 1999, the Frauds Bureau approved plans for 420 insurers.

The New York State Insurance Department released their Annual Frauds Report to the Legislature this week. Highlights from the 2000 Annual Frauds Report include:

· Arrests increased to 503 from 390 arrests in 1999 and increased over 260 percent since 1995 when the Department had 140 arrests. Criminal convictions were up to 318 over 194 convictions in 1999, which represents an increase of over 300 percent from the 79 convictions in 1995.

· The Bureau met with prosecutors from each of New York State’s 62 counties and now prosecutors regularly seek out help from the Department in developing cases helping bring convictions to an all time high.

· The Bureau worked with the industry to launch four major public awareness advertising campaigns to educate the public to the prevalence and costs of insurance fraud.

· The efforts of the Frauds Bureau saved insurance companies over $2,850,000, an increase of over 40 percent over the savings from 1999.

The report also outlines the Department’s fraud fighting plans for 2001, which include a strong focus on eliminating no-fault fraud by working with the New York City Police Department and Department of Motor Vehicles to examine ways to permit timely access to authentic accident report information to insurers, training police officers around the state in ways to recognize staged accidents, and by working with insurers in support of their efforts in auditing medical facilities in order to identify those that are bogus.

A copy of the Insurance Frauds Bureau’s report is available on the Department’s Web site or by calling 800-342-3736 to request a copy.

Topics New York Fraud

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