NAII Members Map N.Y. Strategy for 2003

December 12, 2002

New York area members of the National Association of Independent Insurers (NAII) recently convened to devise their focus for the 2003 legislative session.

Major issues they planned to target include reducing no-fault insurance fraud, reinstating flex rating laws, and complying with a complicated law enacted last month.

“There are plenty of carryover concerns that we need to tackle in 2003,” said Gerald L. Zimmerman, senior counsel for the NAII, who moderated the meeting of NAII’s local counsels and New York insurers. “Coupled with the changes in the New York legislature, 2003 is shaping up to be a busy year.”

The New York legislature maintained the status quo during the 2002 elections: Governor Pataki was re-elected, the Assembly remains controlled by the Democrats, and the Senate remains in the hands of the Republicans. It is expected that all relevant chairs and leadership positions will remain in place. Budget and fiscal issues will dominate the 2003
session as New York state and New York City are projecting substantial budget deficits.

The 2 percent non-renewal and flex rating extenders expired in August 2001, and the insurance industry has been trying to get them reinstated ever since. “Legislators need to know that rates have gone up dramatically since the extenders sunset, so there is no truth, as some have argued, that extenders lead to higher rates – just the opposite is true,” Zimmerman said.

Rampant fraud is perhaps the biggest driver of increased auto insurance rates in New York. Insurers believe that medical protocols, mandatory arbitration, provider certification and decertification, and increased penalties for runners and application fraud could turn the tide. Some of these proposed fixes have been contained in bills proposed by the Governor, the Assembly or the Senate, but none of these embodies all these fixes, Zimmerman said. NAII members plan to meet again to develop alternative legislative language to address this important issue. There may also be some regulatory fixes available as Reg. 68 has demonstrated that the insurance department can be an ally in fighting fraud, Zimmerman noted.

Spousal liability. This bill (A-10456) passed in the 2002 session. Aside from the policy considerations – the law allows auto accident victims to sue their spouses under their own personal auto insurance policies — the offer and notice provisions set up very difficult compliance standards for insurers. NAII members agreed on the need for legislation in 2003 to clarify these concerns, and NAII plans to introduce a bill in the 2003 session which hopefully will see passage early in the session.

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