Auto Insurance Fraud Target Of Senate Bill

ALBANY-New legislation designed to combat auto insurance fraud which costs New Yorkers more than one billion dollars a year plus legislation that would impose criminal penalties for staging auto accidents has been passed by the New York State Senate and sent to the Assembly.

"Auto insurance fraud is more prevalent in New York State than anywhere in the nation and it's costing every driver in New York State more money," Senate Majority Leader Joseph L. Bruno said. "It's estimated that as many as one-third of all auto insurance claims contain some element of fraud, which is a major reason why auto rates in New York are among the highest in the country. This legislation will help to reduce premiums by making it tougher to commit fraud and increasing penalties for people who commit fraud."

To ease insurance fraud prosecutions and ensure punishment better fits the crimes, the Senate passed legislation that would cut in half the value of property obtained through a fraudulent insurance act in order to be convicted of insurance fraud.

In addition, the legislation would:

--Crack down on repeat offenders by establishing three levels of the crime of aggravated insurance fraud for people who commit fraud more than once in a five year period;

--Allow prosecutors to aggregate the value of separate incidents of fraud and base the charge on the total value of the incidents; and

--Allow district attorneys to prosecute organized auto fraud rings under the State Organized Crime Control Act, which carries tough criminal penalties.

The Senate also passed legislation that would make the use of "runners" illegal in New York.

A "runner" is a person who receives money for obtaining clients or patients to participate in insurance fraud. Runners are commonly used in the New York City metropolitan area to steer accident victims towards unnecessary medical treatments. Insurance companies have to pay the fraudulent claims and must make up the cost through higher auto insurance premiums.

The legislation makes it a class E felony to act as a runner or hire another person to act as a runner.

Medical mills submit fraudulent medical claims for unnecessary tests for phony accident victims. Under the state's no-fault insurance law, accident victims can build up $50,000 worth of medical bills that must be paid by insurance companies. Sometimes clinics steal identities and policy numbers to commit fraud, even using information of people who are deceased.

The Senate also passed a bill that would establish a new felony-level crime of staging a motor vehicle accident. The bill is called "Alice's Law," after Alice Ross, a 71 year old grandmother, who was killed as the result of a staged auto accident in Queens in 2003. 5-16-06