AIA Joins in Filing Amicus Brief in Support of Reg 68 Changes

June 27, 2003

The American Insurance Association announced that it has joined with other trade associations to file an amicus brief with the New York Court of Appeals in support of the changes in the no-fault auto insurance Regulation 68.

The changes were adopted in an effort to fight fraudulent claims, and were contained in regulations issued by the New York State Insurance Department last August. They shorten the times required to report claims – from 90 to 30 days – and submit medical bills – from 180 days to 45 days, following an accident. Trial lawyers associations and medical providers have challenged their implementation. Lower courts have sided with the NYSID, and the opponents appealed to the State’s highest court.

“The Insurance Department made these changes to fight the fraud and abuse that is driving up insurance costs for all New York drivers. Two lower courts have upheld these changes which help in the fight to bring down the costs of fraudulent and abusive claims,” stated AIA VP and assistant general counsel David Snyder. “Injured parties are benefited by expediting the claims process and making sure that benefits go to people who are truly injured rather than those participating in scams.”

The brief explains how fraud was perpetuated under the old regulation, stating: “What enabled these forms of fraud and abuse to flourish was the 180-day free rein that unscrupulous persons were afforded to perpetrate them. The 180 days gave such persons the necessary time to obtain and falsify police accident reports and accumulate ‘losses,’ without being subject to any scrutiny or investigation. By the time the proofs of ‘losses’ and medical records were submitted at the end of the 180-day period, the injuries were reported as having been ‘cured,’ leaving the insurer with nothing to investigate and little or no basis to challenge a claim. The perpetrators reaped a windfall.”

It also noted that “Insurers have only 30 days to investigate and pay claims without the threat of a penalty.”

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