New York State Insurance Department Superintendent Gregory V. Serio revealed a series of changes in the New York Automobile Insurance Plan, the assigned risk insurer of last resort, raising rates by 19.5 percent, and challenging New York’s insurance community to reduce the Plan’s population to 200,000 policies or less.
Serio’s actions focused on reducing fraud in the State’s no-fault insurance program, which insurance agents have said costs drivers an average of $321 a year for auto insurance (See IJ Website March 27). A number of new regulations to fight fraud, including the speedy adoption of Regulation 68, which would greatly shorten the times to file accident reports and medical claims.
Serio’s push to reduce the number of drivers in the assigned risk plan from the current 350,000 down to 200,000, would bring the levels back to where they stood in 2000. NY’s insurers feel that inadequate rates and the inability to raise them to necessary levels have been at least partly responsible for pushing more drivers into the assigned risk plan.
The Plan’s administrators had sought an 80 percent increase to cover increasingly heavy losses, but the NYSID approved only the 19.5 percent hike. It stressed that fighting the epidemic of fraud in the state would reduce costs citing statistics which show that reports of no-fault fraud skyrocketed from approximately 5,000 reports in 1996 to over 15,000 in 2001.
To fight the fraud Serio announced that, The Plan will be directed to institute a full fraud-fighting unit within its offices in the next two months that will be consistent with the special investigations units currently operating in all of New York’s auto insurance companies. The Plan will also be instructed to add 12 new members including 5 company representatives, 6 new producers representatives, and a consumer representative to its Governing Committee. There are currently 15 members, composed of 8 insurers and 7 producers. Additionally, in order to better inform and educate the public at large, the Plan will be directed to hold two public meetings annually, one in Albany and one in New York City.”
Was this article valuable?
Here are more articles you may enjoy.