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May 15th, 2013

Senate takes step to fight auto insurance fraud

ALBANY - The New York State Senate took a stand against auto insurance fraud today with the passage of three bills that would help stop a multi-million dollar illegal enterprise in the state.

"Auto insurance fraud is a serious public safety issue in New York that puts New York families at personal and financial risk," Ellen Melchionni, president of NYIA said. "Criminal fraud rings stage and cause accidents, making our roadways more dangerous, diminishing the quality of health care in our state, and adding financial burdens to hardworking New Yorkers. The measures passed by the Senate today would be helpful in combating fraud and protecting innocent victims."

This year marks the 10 year anniversary of the death of auto insurance fraud victim, Alice Ross. Alice was a 71-year-old grandmother driving to visit her daughter on March 22, 2003 when she was intentionally struck from behind, forcing her to swerve off the road and hit a tree, which resulted in her death. The individuals who deliberately hit her car caused the accident to create phony injuries to rack up bogus medical bills and submit fraudulent claims to auto insurers.

The Senate passed the following reforms:

• S1959A/A3774A would allow for retroactive cancellation of a new auto policy if fraudulent payment is used.

• S3547 would make it a felony to commit the crime of staging an auto accident for purposes of committing auto insurance fraud.

• S3033/A4597 criminalizes the offense of recruiting individuals to commit fraud by taking part in staged accidents or submitting fraudulent injury claims to collect auto insurance benefits.

S1959A would help prevent fraud from ever occurring. Criminal rings often rely on being able to pay for auto insurance policies fraudulently to carry out their no-fault fraud schemes. This law also allows victims of a caused accident to be able to receive benefits from their own auto insurer. New York statutes do not currently provide any benefits to a victim or a victim’s family if the accident is a result of an intentional act. S1685 and S2004 will provide law enforcement with necessary tools to investigate no-fault fraud crimes and prosecute the perpetrators.

"The Legislature needs to put an end to criminals blatantly exploiting the auto insurance system for their personal gain at the expense of the welfare and livelihood of our state’s citizens," Melchionni said. "We commend Senate Majority Coalition Co-Leader Skelos, Sen. Seward and Sen. Golden for their leadership on these reforms and the Senate for taking a stand on this important issue."

"Auto insurance fraud is an easy target for criminals," Melchionni said. "The issue can no longer be ignored. We urge the Assembly to act now and take a zero tolerance stance on fraud. New Yorkers deserve meaningful auto insurance fraud reform that puts the citizens of our state first."

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