The Professional Insurance Agents of New York held its first legislative meeting of the year last Thursday, and addressed two major issues on which they want members of the Senate and Assembly to take action during the legislative year -“fight automobile insurance fraud and reform New York Labor Law (Sections 240, 241 and 241-a).”
“More than 60 independent insurance agents, brokers and legislators attended the event. Among the attendants were Sen. Neil Breslin, Assemblymen Canestrari, Casale, McEneny, Prentiss, Tedisco and Tonko,” said the announcement.
The PIANY pointed out that NY’s Insurance Department “estimates that fraud adds more than $1 billion in costs to New York’s auto insurance system annually.” While both the Assembly and the Senate have passed their own anti-fraud bills, they differ in detail. The organization urged legislators to “resolve political differences and ensure that premiums aren’t inflated because of dishonest actions perpetuated by fraud.”
The bulletin also pointed out that “the Labor Law Sections 240 and 241 have caused skyrocketing litigation over accidents at construction work sites and hold general contractors and site owners solely liable for a worker’s injury even in the event of negligence on the part of the employee.” The cost involved “has made it extremely difficult for certain businesses, especially contractors and property owners, to obtain liability insurance,” the PIANY told legislators. It urged them to adopt reforms that “establish a negligence-based standard.”
The meeting heard a plea from Richard Rosetti, president of Rosewood Home Builders, Latham, N.Y., who told the lawmakers and producers about how the insurance industry affects his business. He indicated that “With only two insurance companies willing to write general liability insurance for his company, his premiums continue to rise each year, which affects the quotes he gives consumers.” He warned that the cumulative effect of the rising costs was making NY too expensive to live in, and driving homebuilders out of the market.
The meeting also heard from attorney Robert Pastel, a partner of Pastel & Rosen LLP and a legislative representative for Progressive Insurance, who stressed the importance of enacting proactive measures to deal with no-fault auto fraud and abuse including legislative reforms, the establishment of a no-fault fraud prosecutor, the reinstating flex-rating and the two percent rule. “The characterization right now of the New York auto market is ‘unhealthy,'” Pastel stated. “The no-fault benefit of $50,000 per person is too strong of an attraction for organized crime, unscrupulous medical bills and abusive providers.”
According to Pastel, to effectively combat fraud there needs to be certification and decertification of medical personnel to decrease the number of medical mills; and legislation needs to be passed to make it illegal to be a “runner” in auto insurance fraud schemes. There also needs to be “care paths” so no-fault accident victims can be treated with established procedures to minimize the disputes of payments after the fact.
Robert Franzese, PIANY active past president, outlined the association’s dedication to enacting these legislative changes. Speaking to the legislators in attendance, he asked “How many individuals come into your office and say, ‘change this [legislation] because it will lower the price and we’ll make less money?'” He pointed out that insurance agents in this context are “consumer advocates,” and emphasized that “when we come after these issues many times it’s going to affect our pocket, and we’re doing this because it affects our customers and we see the impact—from the hardware store to the homebuilder — we are a consumer protector.”
“Most legislators in attendance took the opportunity to speak to PIANY members and consider the association’s issues. Many agreed that, given the current budget deficit, any legislation that would save the taxpayers money would be worth considering and that PIANY’s concerns fall within that classification,” the bulletin concluded.
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