Auto insurance reform must be a top priority in 2012 Time to Cut Fraud Tax N By ALAN MAISEL


o-fault auto insurance fraud has reached crisis level in New York State. As a result,


New Yorkers currently pay 53 per- cent more than the national average


STATE OF THE STATE


for auto insurance premiums, which makes our state the fourth most expensive for such costs, trailing only Louisiana, Washington, D.C., and New Jersey. The costs are particular- ly high in New York City, where drivers in Brooklyn and Manhattan pay 185 percent and 110 percent more than the nationwide average, respectively, largely due to rampant no-fault auto insurance fraud. These outrageous costs amount to


a “fraud tax.” But this tax is not like a sales tax that shows up on a store receipt — it’s much harder to see. It’s imposed on New York drivers and small-business owners by criminals who steal hundreds of millions of dollars every year. It comes in the form of higher auto insurance premi- ums that New York drivers must pay because of criminals. As attorney general, Andrew Cuomo worked tirelessly to arrest and prosecute criminals who are part of the booming “fraud industry,” but even he could only do so much with- out much-needed reforms. Now, with growing support among members of the State Legislature to toughen the no-fault laws and stop the fraud in our auto insurance system, Albany can finally take the next step and pass


meaningful legislation that will save New Yorkers hundreds of millions of dollars a year. No-fault auto insurance fraud, in the form of staged auto accidents, has escalated over the past several years. Last year, 53 percent of all fraud reports involved no-fault fraud. To make matters worse, unscrupulous medical providers are also gam- ing the system through a variety of devious methods, including: billing for services not rendered, performing unnecessary medical treatments and filing claims for nonexistent injuries. According to the New York State Insurance Department’s 2010 Annual Report on Health Insurance Fraud, there were 12,807 reports of suspected fraud involving no-fault insurance, or 88 percent of the total number of health care-related reports received.


A


s New Yorkers struggle to live within their financial means, the


State Legislature must act swiftly to reform this broken system and cut the ensuing out-of-control costs. We must preserve what works while adopting meaningful reforms that will dramatically reduce fraud.


New York created its current sys- tem in the 1970s to contain litigation costs, which were driving up auto insurance premiums, while making sure victims with minor injuries got quick compensation without regard to fault. To aid victims with “serious injuries,” such as death, dismember-


In order to combat the rampant fraud abuses in New York’s no- fault system, the Legislature must attack the crux of the problem with fundamental reforms.


ment, significant disfigurement or a fracture, the system protects their right to sue in court. No-fault auto insurance was, and still is, a good idea. But in practice, it has not worked as cost-effectively and efficiently as its originators intended. Instead, the suspected num- ber of fraudulent no-fault claims has increased more than 26 percent since 2007, raising the cost of no-fault claims by 50 percent in the process. The New York State Insurance Department continues to pursue reg- ulatory changes, working closely with insurers, the FBI and other law enforcement agencies to combat rampant no-fault fraud. In 2010,


investigations by the Department’s Frauds Bureau led to 159 arrests. But these mitigating efforts are not enough on their own. In order to truly combat the rampant fraud abuses in New York’s no-fault system, the Legislature must attack the crux of the problem with fundamental reforms. New Yorkers stand to


benefit from common- sense reforms, includ- ing providing insurers with adequate time to conduct fraud investiga- tions, making it easier to decertify health care providers who commit


no-fault insurance fraud; and making it a felony for so-called “runners” who stage accidents to enable fraud- ulent medical claims or steer accident victims toward unnecessary medical treatments.


While there are many important


issues facing Albany for the upcom- ing legislative session, the No. 1 priority must be to save working families and small-business owners their hard-earned money at a time when all New Yorkers are suffering. It’s time to cut the fraud tax, once and for all.


Alan Maisel represents District 59 in the New York State Assembly.


24 JEWISH TRIBUNE • JANUARY 20-26, 2012


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16