Insurers File Amicus to Support N.Y. Regulation 68 Changes on Appeal to the State’s Highest Court

June 27, 2003

The American Insurance Association (AIA) has joined with other trade associations to file an amicus brief with the New York Court of Appeals in support of the fraud-fighting changes in the no-fault auto insurance Regulation 68.

The regulation, which reportedly shortens the timeframes for reporting claims and submitting medical bills after an accident, is being challenged in the state’s highest court by trial lawyers and medical providers.

“The Insurance Department made these changes to fight the fraud and abuse that is driving up insurance costs for all New York drivers. Two lower courts have upheld these changes which help in the fight to bring down the costs of fraudulent and abusive claims,” said David Snyder, AIA vice president and assistant general counsel. “Injured parties are benefited by expediting the claims process and making sure that benefits go to people who are truly injured rather than those participating in scams.”

Insurance Superintendent Gregory Serio reportedly made the changes to Regulation 68 to deter fraud and abuse in the system that was occurring because of the lengthy timeframes allowed for reporting claims and submitting medical bills after an accident. Under the new rules, an insurer must be notified of a claim within 30 days rather than 90 days. Bills for medical treatment must be submitted within 45 days rather than 180 days.

The brief explains how fraud was perpetuated under the old regulation: “What enabled these forms of fraud and abuse to flourish was the 180-day free rein that unscrupulous persons were afforded to perpetrate them. The 180 days gave such persons the necessary time to obtain and falsify police accident reports and accumulate ‘losses,’ without being subject to any scrutiny or investigation. By the time the proofs of ‘losses’ and medical records were submitted at the end of the 180-day period, the injuries were reported as having been ‘cured,’ leaving the insurer with nothing to investigate and little or no basis to challenge a claim. The perpetrators reaped a windfall.”

Insurers have only 30 days to investigate and pay claims without the threat of a penalty.

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