NAMIC Calls on NY Legislators to Reform No-Fault Auto Laws

The National Association of Mutual Insurance Companies (NAMIC) added its weight to the growing demand for reform of New York’s Personal Injury Protection or “no-fault” auto insurance laws.

Roger Schmelzer, NAMIC’s vice president-regulatory affairs, specifically urged two state legislative leaders, Assembly Speaker Sheldon Silver and Insurance Committee Chair, Alexander B. “Pete” Grannis, to actively support passage of Senate Bill 6558, which has been approved by the State Senate is currently under consideration in the Assembly Insurance Committee.

“There is little doubt that by next year New York State will catapult to the ignominious ranking of the number one most expensive automobile insurance state in the nation,” wrote Schmelzer. “It is clear that various loopholes extant within New York’s no fault Personal Injury Protection (PIP) automobile insurance laws have enabled a veritable cottage industry centered on organized auto accident fraud.”

The NAMIC is the latest insurance association to urge that changes are needed in the no-fault rules, and that the measures currently being proposed should be adopted. New York’s Insurance Department Superintendent Gregory V. Serio, and Governor Pataki also back them. Many commentators have warned that the situation is bad and getting worse, and that NY may end up as the most expensive state in the nation when it comes to auto insurance, displacing neighboring New Jersey, which is also debating reform.

Schmelzer’s letter pointed out that industry representatives working together with elected officials had identified problem areas and come up with solutions. He wrote that, “We believe that many of these necessary provisions (classifying the use of runners as illegal, establishing de-certification provisions for medical providers who make false statements about no fault claims, tighter medical protocols and more time to review and challenge claims, and greater resources for fraud investigations and prosecutions) are addressed in the current language of Senate Bill 6558”