Insurance fraud continues to increase in New York,1 and one area that is growing with particular vigor is no-fault insurance fraud. In response to the rise in no-fault fraud, the state Legislature is considering new legislation, and the New York State Department of Insurance is actively engaged in potentially substantial modifications to the regulations that govern no-fault. Both of these developments are worthy of careful attention. Indeed, the potential legislative and regulatory changes will likely have more impact on fraud in the no-fault arena in 2010 and beyond than any litigation issue.
At a public hearing on no-fault fraud before the State Senate Standing Committee on Insurance in early February, Steve Nachman, the Deputy Superintendent for Frauds and Consumer Services of the state Insurance Department, pointed out that over the past several years, there has been an “upward spike” of essentially 10 percent annually in no-fault fraud referral filings to the department—11,000 in 2007, over 12,000 in 2008, and well over 13,000 in 2009. According to Mr. Nachman, filings of suspicious no-fault claims to the department constitute 54 percent of all referrals the department receives.2
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