NY Trial Lawyers Block Scheduled Auto

September 3, 2001

New York’s trial lawyers registered a victory in the latest battle with the State’s auto insurance carriers, when they succeeded in obtaining a court order blocking the implementation of Regulation 68, which had been scheduled to take effect September 1st.

The new rules (see IJ web August 24) would have reduced the time for personal injury auto claimants to give insurers notice of any accident from 90 to 30 days, and would have required medical claims to be submitted within 45 days of an accident, instead of the current six months.

Both the American Insurance Association and the National Association of Independent Insurers have strongly backed the measures, which they claim are badly needed to combat widespread fraud in NY’s Personal Injury Plan, which provides for no-fault coverage.

“The only people who benefit from the present system are the dishonest medical providers and the attorneys who then capitalize on the higher medical costs to cross the no-fault verbal threshold and file lawsuits,” stated the NAII’s Counsel Joseph Termini. “All insurance policyholders pay higher premiums to cover these unjustified costs.”

The court order was the second reversal insurers suffered last month. Democrats in the State’s Assembly earlier refused to extend the provisions of existing laws which had given NY’s insurers the flexibility to raise or lower rates within a band of 7 percent annually, and to drop up to 2 percent of their customers in a given area.

Termini blamed the Assembly for the earlier action, and the trial lawyers for the second, stating that, “The trial bar once again has defied the best interest of consumers by blocking the implementation of this much needed reform.” He warned that the availability of auto coverage could be threatened, unless the needed reforms were made. Some analysts speculated that NY may be on the brink of an insurance crisis similar to that in neighboring New Jersey, unless some accommodation between the industry, the lawyers and the politicians can be reached.

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