N.Y. Legislature Passes Bill to Curb Fraud

June 23, 2005

The New York state legislature’s passage of “file and serve” legislation (A.7525-B/S.4854-A) will give insurers an important tool in fighting auto insurance fraud, according to the American Insurance Association (AIA).

“This bill will put an end to a legal practice that has increased fraudulent claims, especially in the New York City area,” said Gary Henning, AIA assistant vice president, Northeast Region. “Without this bill, unscrupulous trial lawyers have been able to bundle thousands of cases, many with little or no merit, and dump them on insurers. The purpose was to force settlements of cases with no merit simply because the huge volume of claims made them impossible to investigate properly.”

“This bill requires a filing for an index number, at a cost of $45, for each individual case before serving them,” added Henning. “This should curtail the current practice and help in the fight against auto insurance fraud.”

“AIA urges Gov. George Pataki (R) to sign this legislation and provide insurers with another weapon in their arsenal in the ongoing battle against auto insurance fraud,” concluded Henning.

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