N.Y. Wins Again On Auto Crash Reg. 68

In April, an appeals court panel had lifted a stay of the department's Regulation 68, which reduces the time to give notice of an injury claim from 90-to-30 days, and cuts the time limit for submitting medical bills from 180-to-45 days.

The stay had been obtained by trial lawyers and some health provider groups while they contested the regulation before the Appellate division. Medical providers and the New York Trial Lawyers Association had contended the new rule is unfair and poorly researched.

The four-judge panel that decided the case said they would not "second guess measures the [insurance] commissioner deems appropriate to implement the policy of providing prompt compensation for economic loss, while facilitating the investigations necessary to overcome the uncontested substantial increase in fraudulent no-fault claims."

Suzanne Y. Mattei, an attorney for the trial lawyers, could not immediately be reached for comment. In past comments on the dispute, she had said: "We argue they [the filing times] are so short they are inconsistent with the intent of the no-fault insurance law, which is to provide benefits to the public. Honest people will miss this deadline."

The New York Insurance Department in the past has said that it believes Rule 68 will help stabilize auto insurance rates.

Insurers in briefs have argued that prior to Regulation 68, fraudulent medical facilities with 180 day to file claims would submit a stack of phony bills for thousands of dollars on behalf of conspirators whose injuries are "cured." Insurers were then required to pay the bills or deny the claims within 30 days.

The American Insurance Association was among the insurance groups filing briefs supporting Regulation 68. David Snyder, AIA's assistant general counsel in Washington, said the decision "will help in the fight to bring down the costs of fraudulent and abusive claims. It benefits injured parties by expediting the claims process and making sure that benefits go to people who are truly injured rather than scams."

However, Michael Murphy, AIA's assistant vice president for the Northeast region, said still more changes were needed to reduce New York auto insurance claim costs, and called on the legislature to provide insurers with more time to investigate fraudulent claims, make arbitration mandatory, establish "reasonable guidelines for medical treatment," and increase criminal penalties for fraud.

"The Senate has passed a real reform package. The Assembly has blocked real reform. And the Assembly has made the New York auto insurance market worse by refusing to renew the flex-rating and 2 percent non-renewal laws," Mr. Murphy complained.