Packing 70 tables and 8 color charts, this year's 248-page Annual Report of the Superintendent of Insurance to the New York State Legislature was released on May 15, 2008 and has already climbed to #33 on the New York Times' Paperback Nonfiction Best Sellers List.
18. Automobile Insurance
a. New York Automobile Insurance Plan
The number of vehicles insured in the Plan has continued to decline in the past few years and is now at an historic low. Approximately 1.2% of New York private passenger registered vehicles are insured in the Plan as compared to a range of 12% to 17% over 15 years ago. Furthermore, at year-end 2007, there were approximately 31% fewer vehicles in-force than year-end 2006 and approximately 51% fewer than year-end 2005. This continual decrease in the Plan population can be attributed, at least in part, to various Department initiatives such as those to combat fraud and incentives to voluntary market insurers that provide coverage to drivers who otherwise would have been placed in the Plan.
Chapter 268 of the Laws of 2007 extends until June 30, 2008 the provisions of Section 2328 regarding the prior approval of rates for Public Automobile insurance. It also extends until June 30, 2008 the provisions of Section 3425 regarding the cancellation and non-renewal of private passenger automobile policies.
c. No-Fault Motor Vehicle Insurance Law Activity – 2007
i. Impact of recent case law on the Automobile No-Fault systemTwo 1997 Court of Appeals decisions, Central General Hospital v. Chubb, 90 N.Y.2d 195 (1997), and Presbyterian Hospital v. Maryland Casualty, 90 N.Y.2d 274 (1997), had an enormous impact on No-Fault adjudication and the number of disputes generated by the No-Fault system. These cases generally established that a No-Fault insurer may not assert a defense when it does not timely deny a claim within 30 days of receipt. In Fair Price Medical Supply v. Travelers, 42 A.D. 3rd 277 (2nd Dept.) (2007), the Appellate Division, Second Department upheld the application of a preclusion sanction for a late denial where durable medical equipment supplies were billed for and never provided, so that any amount billed by a health provider for non-existent services must be paid by the insurer when there is a late denial. Essentially, the fundamental requirements established by the Legislature in 1973 that all reimbursable No-Fault health care expenses must be necessary and billed in accordance in the fee schedule limits have been frustrated by the Judiciary’s application of the Court of Appeals decisions mentioned above. Therefore, the Legislature should enact legislation similar to the bill proposed by the Senate last year in S2638 that would restore the fundamental requirements for No-Fault health care expenses to be reimbursable by permitting an insurer to assert a defense when it does not deny a claim within 30 days of receipt.
ii. Mandatory arbitration for all No-fault insurance disputesAccording to the authors of an article that appeared in the June 21, 2007 edition of the New York Law Journal, the Civil Court of the City of New York and District Courts in Nassau and Suffolk Counties have been inundated with lawsuits filed by medical providers seeking reimbursement of No-Fault benefits for services rendered to injured claimants. This strain on the judiciary’s resources led the Chief Administrative Judge's Local Courts Advisory Committee (Unified Court System) to propose a bill in 2006 that would amend NYIL §5102 to require mandatory arbitration for all No-fault insurance disputes. Since the improvements in the administration of the No-Fault Arbitration System in the past few years permit it to process substantially more requests for arbitration without compromising the goal of a speedy dispute resolution system, the Legislature should consider legislation that would reduce the strain on the judiciary’s resources by revising NYIL §5102 to require mandatory arbitration for all No-fault insurance disputes.
iii. Decertification of Health Care ProvidersChapter 424 of the Laws of 2005 added a new Section 5109 to the Insurance Law to require the Superintendent, in consultation with the Commissioners of Health and Education, to promulgate standards and procedures for investigating and suspending or removing a health care provider’s ability to be reimbursed under the No-Fault system. The Commissioners of Health and Education are required to maintain a list of providers who they deem, after a reasonable investigation, not authorized to submit claims for reimbursement under No-Fault. This list, which must be updated regularly, must be posted on each agency’s website and provide a toll free telephone number for the public to access the information. Under the law, health care providers can be decertified if the provider:
- was found guilty of professional or other misconduct or incompetency in connection with medical services rendered under No-Fault; or
- has exceeded the limits of his or her professional competence in rendering medical care under No-Fault or has knowingly made a false statement or representation as to a material fact in any medical report made in connection with any claim under No-Fault; or
- solicited, or has employed another to solicit for himself or herself or for another, professional treatment, examination or care of an injured person in connection with any claim under No-Fault; or
- has refused to appear before, or to answer upon request of, the Commissioner of Health, the Superintendent, or any duly authorized officer of the state, any legal question, or to produce any relevant information concerning his or her conduct in connection with rendering medical services under No-Fault; or
- has engaged in patterns of billing for services which were not provided.
The Insurance, Health and Education Departments have had discussions concerning the standards and procedures that should be implemented.
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Private passenger automobile rate filings reviewed and approved in 2007 can be found in Table 41 beginning on page 85 of the report.
A legislative and regulatory recap runs from pages 179 to 191.
Passing percentages for licensing examinations administered in 2007 (Table 62, page 221): public adjusters - 39%; independent adjusters (overall) - 51%; agents & brokers (overall) - 44%.