New York Alliance Applauds Gov. Cuomo's Anti-fraud Measures
ALBANY, NY (04/03/2012)(readMedia)-- The New York Alliance Against Insurance Fraud strongly applauds Governor Andrew Cuomo's effort to bring a stop to no-fault fraud. The promulgation of recent regulation is a complementary enforcement mechanism to the rights that already exist for insurers under current law, including the No-fault law and implementing regulations, as well as the common law (e.g., State Farm v. Mallela and its progeny).
"This aims at one of the key angles in the auto fraud system, and strikes at the head of the snake," says Jack Houston, chairman of the NYAAIF. "If you can stop crooked doctors or lawyers, you cut off the head of this scheme."
Decertification gets at the heart of no-fault fraud by targeting the providers who are ripping off the system. No-fault schemes often rely on shady doctors submitting bogus injury claims.
The ability of laypeople to fraudulently own incorporated professional corporations will by curtailed by decertifying those doctors that violate N.Y. law by illegally selling their names and licenses.
In the past two weeks alone, N.Y. authorities have arrested two big criminal enterprises that were allegedly operating elaborate no-fault schemes. The tactics vary, but the consequence is the same: consumers' pockets get picked in the form of sky-high premiums.
"Cleaning out crooked doctors will help to reduce auto fraud in the state," Houston said. "If a doctor is committing fraud, he or she shouldn't be able to bill for it, and he should certainly not be able to keep his license."
Originally, the no-fault insurance law was designed to lower insurance premiums by eliminating the burden of fault after an accident. It has become a target for fraudsters because of the lucrative potential of $50,000 allowed per claim.
Sham clinics and staged-crash rings are mass-producing bogus injury claims. Large and often complex rings have spread rapidly.
Suspicious claims from staged crashes spiked 10 percent from 2008 through 2010, according to NICB. Nearly 60 percent of questionable claims last year flowed from New York City. Buffalo ranked next highest.
Consumers should also become educated on the signs of fraud in order to report it to authorities.
"After all it's the crime you pay for...everyday," says Jack Houston. "You've got to know it to stop it."