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

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

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

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

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

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

Mr. Wrynn said one provision of the plan would likely have to beno collateral estoppel effect of the arbitrator's decision.Essentially, he explained, the arbitrator's decision would not havean effect on any third-party claim brought by the victim.

His department is supporting a second legislative measure thatwould prevent medical providers who have been found guilty of fraudor abusive billing from submitting no-fault claims for up to threeyears. 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 thosewho engage in fraud encourages more fraud.

A third measure Superintendent Wrynn mentioned would address ajudicial decision that precludes insurers from raising a defense ofa claim if they do not either deny or request more informationwithin 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=Yand S6449 http://assembly.state.ny.us/leg/?default_fld=%0D%0A&bn=s6449&Summary=Y.

Summing up insurer arguments against the 1997 decision inPresbyterian Hospital v. Maryland Casualty, NYIA argued intestimony before the State Senate in February that carriers areforced to pay claims that would otherwise not be covered. NYIA saidthe sheer number of no-fault claims received makes scrutinizingeach one within the timeframe impossible.

As with the mandatory arbitration proposal, Superintendent Wrynntold 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 medicalproviders for services not rendered, or when charges are not inaccordance with the fee schedule.

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

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

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

Aside from legislative changes, Superintendent Wrynn said thedepartment is focusing on assisting with the aggressiveinvestigation and prosecution of fraud perpetrators as well aschanges 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).