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New York Needs to Protect Accident Victims from Insurance Company Abuse

As a Vice President of the New York State Academy of Trial Lawyers, a statewide bar association representing attorneys,members of the judiciary and law professors throughout New York State, it was my honor to represent the Academy and provide testimony to the New York State Senate Insurance Committee earlier this week that was examining issues of No Fault fraud and ways to "reform" New York's No Fault Insurance Laws.

The mission of the Academy is to protect, preserve and enhance the civil justice system.

During the course of Tuesday's hearings Iheard many examples of insurance fraud which needs to be condemned by all.  Further, those who commit fraud need to be properly punished and New York needs to devote resources to this goal and enact necessary legislation to enable prosecutor's to address this problem.

However, as I told the members of the Senate committee, the overwhelming majority of New York residents are not committing fraud and are legitimately seeking to obtain the medical care and medical benefits when they are injured in car accidents in this state.   That's not a crime nor should it be made into a crime.  In the process of insurance reform an examination must also be undertaken to look at fraudulent practices by no fault insurance carriers that unlawfully deny, delay and discourage those legitimately injured from pursuing their right to obtain necessary medical care. 

I have witnessed too many victims of brain injury wrongfully denied appropriate care in New York by insurance carriers that put their profits before their obligations to policyholders.  This must be addressed in any comprehensive approach to No Fault Insurance reform.

I am hopeful that the New York State Senate Insurance Committee will have a fair and balanced approach to any measures that they put forth.

Here is the text of the written testimony that I submitted to the committee:

Good day.  My name is Michael Kaplen and I am an attorney who represents victims of automobile accidents, most particularly those who suffer the tragic consequences of traumatic brain injury throughout the state.  I serve as a Vice President of the New York State Trial Academy of Trial Lawyers and I would like to thank you on their behalf for extending an invitation to address this committee.

The Academy is a statewide bar association consisting of approximately 2,000 plaintiff and defense attorneys, members of the judiciary, law professors, and law clerks. The mission of the Academy is to protect, preserve and enhance the civil justice system. The Academy is resolute in its commitment to preserve and protect the rights of all litigants within the civil justice system in the interest of the fair administration of justice.

It is with these goals in mind that I address you today regarding the proposals that unquestionably affect the rights of all New Yorkers when they are injured in an automobile accident and seek necessary medical treatment pursuant to the No-Fault Insurance laws and state regulations.

New York has a robust history of protecting its citizens from insurance company abuse and ensuring that insurance companies act for the benefit of their policyholders. In short, New York State insurance regulations are based upon the principle that insurance carriers must act in good faith and in fairness to their policy holders.

Unfortunately, these legislative aspirations and principles have been undermined by a long history of systemic abuse in the manner in which automobile insurance carriers have and continue to fulfill their legal obligation to policy holders who seek medical care necessitated by a car accident. 

Under the guise of “reform”, these attempts to curtail abuse by a small minority of claimants and unscrupulous providers will have the concurrently devastating effect of depriving the vast majority of innocent, law abiding claimants from accessing medical care in a timely and efficient manner.

No fault legislation was intended to provide New Yorkers with necessary medical care following a vehicle accident, not as a privilege, but as a right in exchange for limiting individual access to the civil justice system.  No fault laws and regulations were never intended to limit, restrict, ration or impede an injured individual’s ability to obtain necessary medical care. Unfortunately, this is precisely the impact that recent insurance carrier proposals would have on innocent victims of auto accidents

The Insurance Department has lost sight of and ignored the purpose of the No-Fault system -- to provide a just and efficient method for ordinary New Yorkers to obtain necessary medical care and treatment and to help pay for lost wages due to injuries sustained as a result of an automobile accident.

The proposed regulations effectively create a presumption against policy holders who are assumed not to have been injured and therefore in no need of treatment.  Rather than requiring insurance carriers to act in good faith and in an equitable manner for the benefit of policy holders, injured individuals and their health care providers are automatically regarded as if they are acting in concert to perpetrate a fraud on the system. 

The insurance carriers are resolved to create an adversarial system that harms every New York consumer, no matter the circumstance.  The insured’s claim is deemed to be presumptively fraudulent until he or she can prove otherwise to the sole satisfaction of the insurance carrier; in essence applying a guilty until proved innocent standard abhorrent to our system of government.

Repeatedly, insurance carriers have resorted to every trick in their book to delay, deny and discourage New Yorkers from legitimately pursuing their right to medical care under existing regulations.  These inequitable  tactics will only intensify with tragic consequences to those in desperate need of medical care.

Under proposed regulations, the good faith and fair dealing insurance claims practices will be transformed from well-founded “principles” to merely aspirational “goals.”   Citizens will no longer be able to access the civil justice system to enforce and protect their rights, and will be prohibited from persuing  a “private right of access” to seek redress in a court of law when  unfairly denied medical benefits.  Insurance carriers will be at liberty to act in their own corporate self-interest, without penalty, rather than in the interest of their policy holders.

Under some proposals being considered, the carrier’s ability to conduct an examination under oath will be converted   into an inherently coercive device with the intent to harass consumers.  This examination will no longer be a non-adversarial informational statement from an insured regarding the collision and injuries. The proposal would afford  insurance carriers the unfettered right to force both the insured and his/her physicians to submit to an oral examination under oath, at the sole discretion of the carrier. This right would be in the sole discretion of the carrier to seek “additional verification” of the claim, with neither oversight nor rules of conduct to govern either the conduct of the examination or its scope. 

These examinations could be scheduled by a carrier with little notice, and would not provide  the claimant the ability to adjourn the oral examination.  This untenable ability to intimidate policy holders by suspending all payments for care until after the examination takes place cannot be legislatively endorsed.   These examinations, if adopted, will have a chilling effect on the ability to obtain necessary medical care.

The purportedly inviolable relationship between patient and doctor will be challenged by other legislative proposals that would allow  insurance carriers the sole and exclusive ability to ration care, to independently determine what may be deemed reasonable care and to determine when that care should be terminated. The automobile insurance carriers must not be allowed to act as both judge and jury in determining issues pertaining to medical care.

Insurance carriers already require medical providers and claimants to endure a cumbersome process of establishing a claimant’s medical condition and the need for treatment, before claims are paid. Proposals to permit carriers additional time to verify and pay claims, acts to exacerbate the existing difficulties confronting victims seeking only to obtain care.

Time constraints do not permit a more comprehensive recitation of the horrors encountered by honest New Yorkers in accessing insurance benefits for which they have paid, by way of yearly insurance premiums, and to which they are duly entitled under existing law. As those of us in the Academy can attest, the level of consumer care, consideration and respect by insurance carriers is at an unpardonable and unparalleled low.  New Yorkers who are legitimately entitled to No-Fault benefits arising from contracts of insurance for which they have paid significant sums in insurance premiums, must be provided the contracted for rights without unfair regulatory barricades.

The policy of reducing insurance fraud is a laudable goal.  Operating under the assumption that all claims are fraudulent, in order to formulate rules and regulations, is misdirected at best, and will have the collateral effect of harming the innocent who require medical care and replacement of lost income.

The Academy welcomes changes to the No Fault regulatory scheme that will reduce fraud by imposing stringent penalties on those who engage in deception without simultaneously penalizing legitimate claimants and  medical providers.

On behalf of the almost 2,000 members of the Academy who represent honest but injured New Yorkers, I thank you for the opportunity to testify.  We look forward to forging a partnership that includes all interested parties in order to devise a fair and balanced plan that deters and punishes fraud while providing the opportunity for injured individuals to obtain necessary care and support without having to surmount inequitable and convoluted road blocks and obstacles.

Respectfully submitted on behalf of:

New York State Academy of Trial Lawyers

Michael V. Kaplen, Esq.

DeCaro & Kaplen, LLP

427 Bedford Road

Pleasantville, NY 10570

(914) 747 4410




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