With New York no-fault auto insurance costs spiraling out of control and a system that is rife with fraud and abuse by collections attorneys and medical providers, the Property Casualty Insurers Association of America (PCI) and others in the industry made reform a top priority for lawmakers during the 2010 legislative session which concluded yesterday. However, it is likely that legislators will come back to session to finish certain budget items.
“This year we successfully raised the profile of no-fault reform and fraud fighting,” said Kristina Baldwin, assistant vice president for PCI. “This issue took on a sense of urgency for lawmakers as the insurance committee chairs held public hearings, working group meetings and countless hours of meetings and discussions to address problems in the system. While the bill that was ultimately introduced (S8414/A11596) fell far short of what we believe is necessary to stop the no-fault fraud crisis in New York, legislators did not pass the bill and have committed to continuing to work on the issue over the summer, for possible action if the legislature returns for a special session in the fall.”
PCI and others in the industry sought reforms that would combat excessive medical charges, encourage fast and fair settlements of claim disputes, provide adequate time for fraud investigations, and institute tough penalties for insurance fraud by making it possible to decertify health care providers who commit no-fault insurance fraud. PCI and the industry also want to protect public safety and control insurance costs by increasing penalties for so-called “runners” who stage accidents to enable fraudulent medical claims or steer accident victims towards unnecessary medical treatments.
The 2010 legislative session also saw the trial bar levy attacks on numerous fronts. However, none of the trial bar's insurance related initiatives passed this session. PCI defeated legislation advanced by the trial bar which would have greatly expanded the serious injury threshold for bringing a personal injury action (S7824). In addition, PCI defeated legislation which would have made it easier for medical bills to be presumed prima facie proof of damages in no-fault litigation (S5262-C).
PCI also successfully worked to prevent the advance of legislation which would have surcharged all liability policies to pay a deficit in a medical malpractice pool which provides coverage for doctors who are unable to secure malpractice insurance in the voluntary market (S8274/A11542).
On the homeowners insurance side, PCI defeated legislation which would have greatly limited the ability of insurers to underwrite based on the location of the insured property and the associated risks of the location (S8238). While the sponsor hoped that this legislation would make coverage more available and affordable in NY's coastal areas, PCI successfully explained that the market in NY's coastal areas is currently healthy and that passing legislation of this nature would likely throw the market into turmoil and create availability problems.