NU Online News Service, April 21, 3:22 p.m. EDT

EAST ELMHURST, N.Y.–The New York State insurance superintendent said, as part of an effort to address no-fault insurance fraud, he is supporting enactment of a measure requiring mandatory arbitration for no-fault claims under $5,000.

Superintendent James Wrynn, speaking today at the New York Insurance Association (NYIA), National Insurance Crime Bureau (NICB) New York Insurance Fraud Summit here, said there is not a proposed bill on mandatory arbitration yet, but that talks with legislators have been positive.

Regarding the "under $5,000″ provision of the plan, Superintendent Wrynn said, "We're not going to get mandatory arbitration for all claims right now, so my feeling is, let's get a single. Let's just get on base."

He said requiring mandatory arbitration will decrease the number of overall no-fault cases and send a message regarding the direction the state is going in combating fraud.

Aside from the fraud-fighting aspect of sending such cases to arbitration, Superintendent Wrynn said the plan would also free up court resources. "Why are we trying cases in a civil court for $600 with an expert witness, two lawyers, a judge, a law secretary and a court officer?" he said. "At a minimum, it's not the best use of judicial resources."

Mr. Wrynn said one provision of the plan would likely have to be no collateral estoppel effect of the arbitrator's decision. Essentially, he explained, the arbitrator's decision would not have an effect on any third-party claim brought by the victim.

His department is supporting a second legislative measure that would prevent medical providers who have been found guilty of fraud or abusive billing from submitting no-fault claims for up to three years. The bill is S3552/A7128 http://assembly.state.ny.us/leg/?default_fld=%0D%0A&bn=s3552&Summary=Y.

"Again, we have to start showing that we mean business here," Superintendent Wrynn said, adding that slaps on the wrist for those who engage in fraud encourages more fraud.

A third measure Superintendent Wrynn mentioned would address a judicial decision that precludes insurers from raising a defense of a claim if they do not either deny or request more information within 30 days of receipt of the claim.

The bills to that end are S6448/A4348 http://assembly.state.ny.us/leg/?default_fld=%0D%0A&bn=S06448&Summary=Y and S6449 http://assembly.state.ny.us/leg/?default_fld=%0D%0A&bn=s6449&Summary=Y.

Summing up insurer arguments against the 1997 decision in Presbyterian Hospital v. Maryland Casualty, NYIA argued in testimony before the State Senate in February that carriers are forced to pay claims that would otherwise not be covered. NYIA said the sheer number of no-fault claims received makes scrutinizing each one within the timeframe impossible.

As with the mandatory arbitration proposal, Superintendent Wrynn told insurers not to expect a "grand slam" on the 30-day deadline, but he said the goal is to allow for the denial of payments, particularly in cases where there are payments made to medical providers for services not rendered, or when charges are not in accordance with the fee schedule.

He said there is also interest in pursuing a bill to punish "runners," or persons involved in setting up fraudulent accidents and claims, but complications have arisen in figuring out how exactly to define what a runner is.

Speaking to the level of interest in the legislature to pass measures, Superintendent Wrynn said he has held talks with Assembly Speaker Sheldon Silver, D-N.Y., as well as the insurance committee chairs of both the Senate and Assembly, among others.

"I think they all get it," he said.

Aside from legislative changes, Superintendent Wrynn said the department is focusing on assisting with the aggressive investigation and prosecution of fraud perpetrators as well as changes to the state's no-fault regulation, Regulation 68 (http://www.property-casualty.com/News/2009/11/Pages/NY-Proposes-Rule-Changes-To-Combat-Auto-Injury-Fraud.aspx?k=regulation+68).

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N.Y. Insurance Regulator Outlines Anti-Fraud Legislative Concepts

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