Thursday, April 30, 2009

No-Fault Retro -- A Persistent Attempt to Roll Back the Clock

New York State Assemblyman Peter Rivera of the Bronx is nothing if not persistent.  Last week, he reintroduced a bill that would enlarge back to "six months"  (which could actually be 182 days long if February in a leap year falls within that six month period) the required time periods for both notice of accident (currently 30 days) and proof of claim (currently 45 days for health service expenses and 90 days for work loss benefits and for other necessary expenses) in New York no-fault claim matters.

Assembly Bill No. A07714, which does not appear to have a matching bill in the state senate this legislative session, was read once and immediately referred to the Assembly's Insurance Committee on April 22nd.  Again.  The prior legislative history for this bill dates back to 2000, with versions having been introduced and referred to the Assembly's Insurance Committee in each year and legislative session since, but apparently  never coming out for a vote.

If this proposed bill has any chance of seeing the legislature's floor for a vote, someone in Assemblyman Rivera's office should freshen it up with some accurate dates and re-write the "Justification" section of his sponsoring memorandum.  When the bill was first introduced in 2000, the February 1, 2000 effective date for Regulation 68's reduced time frames may have been correct, but the Medical Society of New York twice challenged the revised regulation -- once successfully and once not -- in separate Article 78 proceedings, the second of which eventually went all the way up to the New York Court of Appeals in 2003.  In upholding the Insurance Department's authority to revise Regulation 68 by, among other things, reducing the time limits for notice of accident and proof of claim, the Court of Appeals noted:
As represented at oral argument by counsel for respondents, in the year and a half that the regulations have been in effect, petitioners' predictions that thousands of innocent accident victims will fail to meet the new filing deadlines and be denied benefits, or that hospitals or other medical providers will prove unable to bill for services within 45 days, appear not to have materialized. In any event, the Superintendent has determined that the revised regulations are the most effective means of advancing the legislative intent of providing prompt payment of benefits as the loss is incurred, while reducing rampant abuse.  Matter of Medical Society of the State of N.Y. v. Serio, 100 N.Y.2d 854 (2003).
So what has changed?  A good but brief legal history of Regulation 68 can be found on the New York State Insurance Department's website.  The effective date of revised revised Regulation 68 is April 5, 2002, making the sponsoring memorandum's statement that "[t]he regulations were recently changed" inaccurate, unless we're speaking in geological or astronomical terms. Additionally, the current version of Regulation 68 does not, as Assembly Rivera's sponsoring memorandum erroneously states, require a claimant to justify a late notice of accident or proof of claim by "clear and convincing evidence".  What is required is "written proof providing clear and reasonable justification for the failure to comply", which some will recall is a relaxation of the previous requirement in "old" Regulation 68 that an eligible injured person or that person's representative submit written proof "that it was impossible to comply with such time limitation due to specific circumstances beyond such person's control."

I don't dispute that the New York State Legislature has the authority to enact insurance laws such as the one Assemblyman Rivera has proposed six times.  If Assemblyman Rivera believes (which I'm not suggesting he doesn't) and has empirical support for his belief (which I question whether he does) that policyholders, injured persons and medical providers have been negatively affected by the 2002 reductions in notice of accident (90 to 30) and proof of claim (180 to 90 & 45) time limits, he should continuing championing this bill.  If does not, however, the bill is an anachronism that should again be allowed to die in committee and not be reintroduced.

If you support or oppose the idea of this proposed bill, you can let Assemblyman Rivera know about it by contacting him here.  I have. 

Thanks to Claims Counsel Lisa Mahaffey of 21st Century Insurance Company for bringing this reintroduced bill to my attention yesterday.

1 comment:

Raymond Zuppa said...

As a general matter I believe that the vast majority of policyholders etc. have not been harmed by the shortened time periods. They are a good thing. However, I do not believe for one minute that the insurance companies have taken advantage of the shortened time periods to properly investigate fraud.

In any event I agree that Assemblyman Rivera probably has better uses for his time.