N.Y. Gov. Signs Bill to Combat Auto Insurance Fraud

New York Gov. George Pataki (R) has signed legislation (A.7525-B/S.4854-A) which will give insurers an important tool in fighting no-fault auto insurance fraud, according to the American Insurance Association (AIA).

“This law will provide insurers with the ability to better defend against lawsuits and fight frivolous or dubious cases,” said Gary Henning, AIA assistant vice president, Northeast Region.

The law requires that an index number be purchased for $45, prior to the service process in lower courts of New York. This “file and serve” practice was already required in state Supreme Court. It will prevent thousands of cases, many with little or no merit, from being “bundled,” which makes it difficult for insurers to defend all of them simply because of the volume.

The law takes effect 30 days from the signing date of Aug. 9, 2005.