Insurance Groups Discuss No-Fault With N.Y. Legislators

NU Online News Service, April 30, 3:00 p.m. EDT

No-fault auto insurance reform took center stage in a meeting between more than 100 insurance industry professionals and key New York state legislators, a joint statement of industry associations said.

Members of the American Insurance Association (AIA), National Association of Mutual Insurance Companies (NAMIC), New York Insurance Association (NYIA) and Property Casualty Insurers Association of America (PCI) met with a panel of legislators. They included Senate Insurance Committee Chair Neil Breslin, D-Albany; Assembly Insurance Committee Chair Joseph Morelle, D-Irondequoit; Senate Insurance Committee Ranking Member James Seward, R-Oneonta; and Assembly Insurance Committee Ranking Member William Barclay, R-Oswego.

The insurance groups said those at the meeting paid particular attention to the no-fault issue in the state, which Ellen Melchionni, president of NYIA said cost New Yorkers about $229 million last year.

The industry associations said they are supporting legislation that would allow insurers more time beyond the current 30-day deadline to investigate suspicious claims, and legislation that would call for mandatory arbitration of no-fault claims.

In addition, they are supporting a bill that would make the fraud practice of "running" a felony, and legislation that would de-certify from the no-fault system providers found guilty of fraud.

Sen. Seward said, "The Insurance Department has done what it can do administratively. Now we need to act legislatively to toughen the laws."

Insurers at the meeting also opposed coastal homeowners legislation that would reduce the threshold for companies filing for homeowner reduction plans. The bill would add a lower threshold for those insurers that are non-renewing policies in the state's coastal areas, as opposed to statewide.

Insurers said the legislation is unneeded as the coastal homeowners market in the state has stabilized.

The trade groups also called for tort reform in New York. Paul Tetrault, state affairs manager for NAMIC, said, "Liability defense costs, adjusted for inflation, have risen 485 percent since 1977 and New York jury awards generally are 600 percent above the U.S. norm."

He added, "Sensible tort reform would strengthen our state's economy, create new job opportunities and reduce New York's crushing income tax, business tax and property tax burdens."