The Independent Insurance Agents & Brokers of New York Inc. announced today that ending the $1 billion drain on New York motorists and freeing the state’s construction industry from a severe crisis created by obsolete provisions in labor law again lead its list of legislative priorities for 2004.
The Syracuse-based trade association, which represents more than 1,900 independent agencies and brokerages in New York, released its annual Legislation Position Paper for 2004 and cited for the third consecutive year the legislature’s failure to reach agreements on fighting auto insurance fraud and remedying the lack of affordable commercial general liability coverage for building contractors. IIABNY, which also represents 19,000 agents, brokers and their employees, believes that missed opportunities in 2003 for the state legislature in resolving fraud and liability issues are now major factors working against New York’s continued economic recovery.
No-fault fraud costs New York motorists $124 annually per vehicle. In 2003, aggressive enforcement and prosecution by insurance company investigators, local and state law enforcement officials and the New York Insurance Department led in one instance to 85 indictments in what is believed to be the largest no-fault auto insurance fraud ring in state history. Yet as 2004 begins, the relatively soft punishment for committing no-fault fraud serves as a green light for criminals. In addition to calling for tougher penalties for those recruiting participants in their scams, IIABNY’s Legislative Position Paper advocates additional time for insurance companies to investigate suspicious claims, a mechanism to decertify medical providers found guilty of no-fault fraud and the implementation of medical protocols for no-fault injuries.
Despite a recent court ruling, IIABNY will also re-intensify its efforts in 2004 to replace the “absolute liability” language in Sections 240 and 241 of New York Labor Law with a reasonable standard. The current standard, the only one of its kind in the nation, imposes an absolute liability on contractors or building owners for a worker’s fall from any height. In effect, employers in New York’s construction industry are deprived of their right of defense against such claims. As a result, insurance on construction projects for many contractors has become prohibitively expensive and the market for such coverage severely restricted. A Dec. 23 ruling by the New York Court of Appeals, the state’s highest court, reaffirmed the original intent of the legislature by narrowing the scope of the standard when absolute liability applies.
“While we made some progress during the past year, legislative action is long overdue on both issues, ” said Maura Clancy, IIABNY Chair of the Board. “The fact that fraud and the scarcity of affordable liability insurance are again at the top of our legislative agenda should send a strong message that we are not giving up on our efforts to reform New York’s insurance market for the benefit of all parties.”
IIABNY’s 2004 Legislative Position Paper advocates additional reforms to the state’s workers’ compensation system and reaffirms the association’s positions on the insurance industry’s use of credit scoring and permanent authorization of the New York Property Insurance Underwriting Association. It also summarizes the association’s position and efforts during the past year regarding proposals directed at regulating the use of unsolicited, commercial electronic mail and the possible impact on independent insurance agents and brokers, as well as their clients.
Copies of IIABNY’s Legislative Position Paper are available by contacting IIAANY’s Legislative Office at (518) 465-5340. The Position Paper can also be viewed and downloaded from IIAANY’s Web site (www.iiabny.org). Go to the “Government Affairs” section and click on the text link for current Legislative Position Paper.
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