New York Insurance Superintendent Howard Mills is campaigning to toughen up the state's light insurance fraud penalties, sending a flurry of letters to legislators urging them to break their gridlock and tackle the problem.

Speaking at Orange County Chamber of Commerce in Newburgh, N.Y., yesterday, Mr. Mills railed against puny fraud penalties in the state. "The problem is that we really need to toughen the penalties for insurance fraud in New York State. The penalties for fraud on insurance are a joke," Mr. Mills said, a spokesman for the New York Insurance Department reported.

Spokesman Michael Barry said also that on June 15, Mr. Mills sent a letter to New York State legislators on this topic. In the letter, Mr. Mills said that as the scheduled end to the legislative session rapidly approaches, "I urge both houses to reach a compromise on several auto insurance fraud measures that will get tough on those who seek to exploit New York's no-fault law and further reduce automobile insurance rates for all New Yorkers."

Over the past several years attempts to toughen fraud penalties that have been proposed by the Republican-controlled Senate have generally been blocked by the Democratic-controlled Legislature.

Democrats have said they will pass fraud measures only if they are linked to a comprehensive package of insurance law revisions that includes controls on rates.

Current Senate-Assembly tussles over insurance issues also include a conflict over giving permanency to the state's FAIR plan, the insurance market of last resort for homes and businesses known as the New York Property Insurance Underwriting Association. NYPIUA is due to expire in eight days.

Mr. Mills has kept out of that conflict. He said in his letter that the legislature needs to give prosecutors necessary tools to attack fraud, including increasing penalties on those who orchestrate staged accidents as well as on "runners"–those who commit insurance fraud by linking accident victims to attorneys or doctors for fraudulent purposes.

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NYs Mills Campaigns For Tough Fraud Penalties

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