NU Online News Service, Feb. 2, 3:57 p.m. EST
Insurance industry representatives told a key legislator that higher penalties for auto accident fraud and greater use of claims arbitration is essential to stabilize New York’s no-fault system.
Their comments came during a roundtable discussion on the state’s no-fault system yesterday held by Assemblyman Joseph Morelle, D-Irondequoit.
The session held by Mr. Morelle, who is chairman of the Assembly Insurance Committee, in addition to insurance industry representatives consisted of other stakeholders including trial lawyers and medical providers.
Tim Dodge, spokesman for the Independent Insurance Agents and Brokers of New York (IIABNY), which had a representative at the discussion, said the industry managed to get one piece of no-fault reform passed several years ago–a bill that decertifies medical providers convicted of no-fault fraud. But he said there are still essential pieces missing.
Some initiatives IIABNY would like to see enacted, Mr. Dodge said, are a law making it a felony to act as a runner who solicits persons to participate in accident fraud.
IIABNY is also seeking a firm medical protocol or utilization review for no-fault claims, mandatory arbitration for disputed no-fault claims, and new burden-of-proof requirements for no-fault claims.
Ellen Melchionni, president of the New York Insurance Association (NYIA), attended the roundtable and called for the legislature to at least go after what she termed as “low-hanging fruit.”
She cited a runner’s law as an example of an initiative that won’t solve the state’s no-fault problems but would be a step in the right direction that should be able to pass through the legislature without much opposition.
Speaking to the no-fault issues in the state, IIABNY, citing Insurance Information Institute statistics, said the cost of no-fault claims in New York rose 56 percent from 2004 to the second quarter of 2009.
Ms. Melchionni pointed to a 2010-2011 budget request stating that New York City civil courts receive over 200,000 no-fault filings a year. She said the 2008-2009 budget request noted approximately 100,000 such filings, meaning no-fault filings have increased 100 percent during that time period.
Regarding the roundtable discussion, Ms. Melchionni said, “I thought it was a great start for some dialogue between the interested parties.”
Matthew Guilbault, director of government and industry affairs for the Professional Insurance Agents of New York, who also attended the roundtable, said the meeting featured “frank and honest” conversation, and that he was pleased to hear consensus in the room to not abandon the no-fault system.
In a statement, the Property Casualty Insurers Association of America said: “There was a good exchange of information regarding the scope of the problem which is estimated to cost New Yorkers $229 million last year. We are particularly pleased that this discussion is being held early in the year so that lawmakers can enact comprehensive, meaningful reforms this legislative session.”
Ms. Melchionni said the discussion was “spirited at times,” and IIABNY added that all parties did not reach a consensus on what reforms would be needed.
But Michael Barrett, legislative representative for IIABNY, said he believes the legislature is serious about looking into no-fault. “I think there’s a real interest on the part of both chairs” to do something this year, he said.
He noted that the State Senate will hold a hearing Thursday on the no-fault system. Ms. Melchionni also said the legislature recognizes the no-fault issue, as evidenced by the roundtable and upcoming hearing.
Mr. Guilbault said the hearing will make the no-fault issue a “two-house conversation,” and he added PIANY president Kevin Ryan will offer testimony.
NYIA will also be testifying at the Senate hearing, Ms. Melchionni said, because “we need to do something here in New York.”