PIANY Seeks Legislators’ Help on Fraud, Other Issues

January 9, 2004

At a recent meeting with New York legislators, representatives of the Professional Insurance Agents of New York State Inc. stressed the need fight to auto insurance fraud; to define the permanent status of the New York Property Insurance Underwriting Association (NYPIUA); to contain workers’ compensation costs while raising the benefits; and to give policyholders their own information in a timely manner.

The meeting, held at Albany’s Empire State Plaza, gave independent insurance producers an opportunity to address major issues on which they want members of the Senate and Assembly to take action during this legislative year. Nearly 70 independent insurance agents, brokers and legislators from Albany attended the event. Among them were Sen. Neil Breslin and Assemblymen Patrick Casale and James Tedisco.

Delegates viewed last year’s accomplishments as largely successful. Especially welcome was the decision by the Court of Appeals upholding Regulation 68-which shortens the timeframe to report an accident from 90 days to 30 days after an accident, and the time doctors may submit medical bills from 180 to 45 days following treatment-caused a hopeful atmosphere at the opening of the event.

“One of the most recent successes we just had is a legislative bill that is taking effect Feb. 12, that’s going to require that non-payment cancellation notices display premium-the amount due-and ensure that agents can see all notices that affect their client’s policy,” stated Robert Franzese, PIANY past president. “That’s a major issue that will help us help our customers.”

Sparked by past success, the attendees were looking to see the same legislative progress regarding labor law, workers’ compensation and other consumer issues. Tom Lutz, PIANY legislative representative, highlighted a new PIANY-initiated bill, designed to reduce the surcharges for auto accidents. The bill proposes that the amount of property damage that an accident would have to cause before an insurer can impose a surcharge be raised from $1,000 to $2,000. He indicated the bill would “help keep New York state off the number one spot for the highest price of auto insurance in the country,” he indicated. “(With the rising cost of auto repairs) we think the timing of this bill is right.”

To stress the importance of labor law reform, Bruce Baird, past president of the New York State Association for Affordable Housing, discussed how the lack of general liability insurance in New York has affected his members and the consumers who qualify for affordable housing. “We are a group living and breathing liability insurance like we never have before,” he stated. “My liability insurance in the past five years has increased from around $2 per thousand to $17 per thousand. The premiums we are paying, which before were a minor part of what would be considered the overhead to a builder or developer, now have become a major cost.”

Baird explained that since the government funds the NYSAAH, the rising cost of general liability insurance is passed on to the taxpayer. As the cost of housing increases per unit, the builders produce fewer homes per project. He highlighted a project he’s currently undertaking where he is building fewer units than he would if his insurance premiums were lower. “Now that doesn’t sound like a lot,” he continued, “but say that to the 73-year old lady who was going to move into that apartment we didn’t build.”

The good news regarding auto insurance, according to Lutz, is that the general public is starting to understand fraud and how much it costs-which according to the New York State Insurance Department is $174 per vehicle per year. “We’ve got to keep the focus and the pressure on,” he stressed. “This is a pocketbook issue and a quality of life issue.”

According to PIANY, the best way to combat fraud is to: criminalize “runners”; extend time for fraud challenges; set treatment standards; crack down on medical fraud; and mandate arbitration for providing disputes.”

It also feels strongly that “NYPIUA should not be allowed to ‘sunset,’ ” [authorization to continue the program must be renewed annually by the legislature], as it is “the state’s only ‘market of last resort’ for property owners who cannot get coverage elsewhere.” It provides a needed function and should be made a permanent legal entity when it comes up for renewal April 30, 2004.

PIANY also said that this year it will “push to make sure that an increase in workers’ compensation benefits are offset by cost-saving reforms. Otherwise a benefit increase will cause New York’s already-high insurance premiums to increase greatly. PIANY suggests that cost-reduction measures such as adopting the American Medical Association’s guidelines to provide a more objective system for determining permanent disability and managed care plans should be made available for use by all employers.”

The organization has also secured sponsorship for a bill that would strengthen policyholder protections, by “requiring insurance companies to send any notice of a terminated business insurance policy out along with key policy information. This will eliminate the waiting period and allow agents to seek replacement coverage for their clients as soon as possible.”

Each lawmaker in attendance was given the opportunity to speak. They supported the attendees’ optimism for the legislative year, noting that many of these changes were long overdue. Some commented on the need for PIANY to continue to educate its members and the public about these issues. PIANY will be holding similar meetings with legislators in their districts throughout the state during the coming months.

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