AIA: Reg. 68 Ruling Can Survive Appeal

By Daniel Hays

NU Online News Service, Feb. 20, 11:29 a.m. EST?The American Insurance Association, labeled a New York judge's decision upholding the Insurance Department's Regulation 68 a "big victory" yesterday in the state's war on a $1 billion-a-year auto injury fraud problem.

The rule shortened the timeframes for reporting auto injury claims and for submitting medical bills.

Prior to the decision by Supreme Court Justice William Wetzel, a county level judge, the Washington-based AIA had submitted a 29-page friend of the court brief together with the New York Insurance Association.

The associations joined with New York Insurance Superintendent Gregory Serio in opposing a challenge to the regulation that was brought by the New York State Trial Lawyers Association, with a number of other plaintiffs including doctors and chiropractor groups and a surgical supply company.

AIA said it expects an appeal of the latest decision. Suzanne Y. Mattei, the trial lawyers' attorney did not immediately return a request for comment.

Under the new rules an insurer must be notified of a claim within 30 days rather than 90 days and bills for medical treatment must be submitted within 45 days rather than 180 days.

"This decision will help in the fight to bring down the costs of fraudulent and abusive claims," said Michael Murphy, AIA assistant vice president, northeast region. "Fighting fraud and abuse was the department's purpose for making these changes. The old timeframes create an easy opportunity for fraudulent and abusive claims."

AIA noted language by Judge Wetzel in his decision rejecting an argument against the regulation "which basically suggests that respondent [Superintendent Serio] is limited to treating the symptom but not the system. The no-fault system is diseased by fraud of a dimension which threatens the economic vitality of the program and carries enormous financial consequences for insurers and insureds throughout the state.

"It is well within the authority of respondent Superintendent to promulgate new regulations to remedy this universally acknowledged problem."

AIA said if there is an appeal it believes Judge Wetzel's decision describes a firm basis for the Superintendent's authority to make the regulatory changes.

"The amendments will benefit consumers in two ways. If they are injured in an auto accident, these changes should expedite the payment of compensation. As consumers, they will benefit from a reduction in costs because unnecessary treatment costs are discovered early and minimized, resulting in lower costs," added Mr. Murphy.

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AIA: Reg. 68 Ruling Can Survive Appeal

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