NY Agent/Broker Associations Join to Fight Auto Fraud

March 27, 2002

Four leading New York agent and broker trade groups have joined forces to combat “rampant fraud” in the state’s no-fault automobile claims procedures. The Professional Insurance Agents of New York, Inc. (PIANY), Independent Insurance Agents Association of New York (IIAANY), The Council of Insurance Brokers of Greater New York (CIBGNY) and the New York Auto Agents Alliance (NYAAA) called on state lawmakers to protect New Yorkers from the “hidden tax” being imposed annually on each auto insurance policyholder.

The groups are hoping that their united front may inspire NY legislators to resolve their differences and take constructive action. “We hear from companies, economists and researchers alike that fraud will push this state into the unenviable position of having the nation’s most expensive auto insurance rates in the coming year,” stated John Bailey, CIC, PIANY president. “It’s in the interest of our customers—the legislators’ constituents—to address the mountain of fraud that threatens the state’s no fault auto insurance system.”

Arrests for auto claims fraud reached a record number last year. Insurance industry studies estimate that the incidence of fraud costs New Yorkers $2 million a day, and adds $321 to the average driver’s insurance policy.

All of the associations strongly support the immediate implementation of proposed Regulation 68, which would which would reduce both the time auto accidents can be reported from 90 days to 30 days, and the amount of time for medical claims to be filed, from 180 days to 45 days. It’s currently being held up in legal proceedings.

In addition to adopting Regulation 68 the agents and brokers also called on legislators to take additional steps. The want to see the following changes enacted:
— Criminalize runners – Runners organize phony accidents and coordinate the run-up of huge medical bills in collusion with crooked clinics.
— Extend timeframe for fraud challenges – Currently, insurers have only 30 days to challenge a suspicious claim.
— Set medical protocols – Approved protocols could eliminate many unnecessary or fictitious treatments, tests and procedures.
— Crack down on medical fraud – A certification system is needed that would bar any health-care provider or clinic engaging in fraud from treating no-fault cases.
— Mandate arbitration for provider claims – Currently, arbitration decisions on disputed medical claims are not binding, which clogs both the arbitration and court systems.

The organizations have pledged to work together to try and see these measures adopted.

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