Anti-Fraud Bill Introduced In N.Y. Assembly; Sponsors Charge Insurance Industry Has Not Been Committed To Fight And Requires Legal Mandate.

• Position: [LOOKING BACK] INSURANCE ADVOCATE - 25 YEARS AGO

ALBANY, N.Y. -- Attorney Genera! G. Oliver Koppell, chairman of the Assembly Insurance Committee, Alexander "Pete" Grannis (D-Manhattan) and Assemblyman Ivan Lafayette (D.L.Queens), are calling for swift passage of the Insurance Frauds Prevention Act of 1994, which they said mandates insurance companies to "aggressively join the fight against costly fraud."

Grannis put part of the blame for the failure to mount an all-out fight against fraud on the insurers. He said that the "lack of commitment" from the insurance industry is "the glaring weakness" in the anti-fraud fight. On the other hand, he said that in the past year "the state Insurance Department and the Attorney General "have beefed up their fraud fighting efforts, using new powers and resources granted by the legislature."

The Insurance Committee chairman said that "far too many companies have been content to simply pass along the staggering cost of fraudulent claims to consumers through higher premiums. It's time for this industry to commit its resources to fighting fraud and return the savings that will follow to its customers."

(This statement about insurance anti-fraud efforts is refuted in a statement released by the Alliance of American Insurers in New York. The Alliance has taken a position in opposition to the bill proposed by Koppell, Grannis and Lafayette --See related story on this page -ed.)

The Attorney General, in support of the bill, A.8933-A, said it calls on companies to take "meaningful steps to crack down on insurance fraud, which costs New York policyholders billions of dollars annually." He charged that incidents of insurance fraud have risen dramatically in recent years. Specifically, he cited medical providers, auto body shop adjusters, consumers or the companies themselves.

The proponents of the anti-fraud legislation said that state regulators and industry analysts have estimated that between 10 and 15 percent of the nearly $31 billion in premiums written in 1992 for accident and health, workers' compensation, automobile and other property and casualty policies, was attributable to fraud. They said that these figures are conservative and that some estimates range as high as 30 percent.

The bill introduced by Grannis, is modeled after a similar program in New Jersey. The sponsors characterized the New Jersey endeavor as "successful."

Grannis' bill would require every company licensed to do business in New York to implement a plan approved by the Insurance...