Brooklyn Borough President

BP CHAIRS FIRST MEETING OF BROOKLYN AUTO INSURANCE TASK FORCE

On September 18th, Borough President Marty Markowitz chaired the first meeting of his Brooklyn Auto Insurance Task Force. The goal of the task force is to try and reduce auto insurance rates in Brooklyn that are the highest in the state, if not the country. One way the task force is trying to help lower these soaring rates is bycracking down on insurance fraud, which is the second most costly white-collar crime in America.

“Because premiums are unaffordable for many Brooklynites, the number of uninsured drivers is skyrocketing, putting everyone in danger. Brooklyn's high premiums are completely unacceptable, and there is no legitimate reason why premiums just across the border in Queens, for example, are much less than in Brooklyn. This is a deadly serious economic and public safety issue that needs to be addressed immediately. We need to all work together to try and make rates far more equitable,” Borough President Markowitz said.

New York State Insurance Department Superintendent Gregory Serio was in attendance and discussed some of the reasons for Brooklyn's extraordinary premiums and the steps the Department is taking to keep premiums down. He called for changes in State law to fight fraud, the chief factor behind rising premiums. Serio stressed that Albany must enact anti-fraud legislation, even if it's just for pilot programs. Serio also said that the ultimate goal must be to get people into a long-term relationship with an insurance carrier.

Representatives of insurance companies said that the key to reducing premiums was controlling costs -- specifically, putting a lid on fraud -- and that Albany must also enact new laws to make this a reality. These should include a law to make "running" a felony, rather than just a misdemeanor. "Runners" are individuals who steer parties injured in an auto accident to dishonest medical providers and lawyers who inflate claims. One underwriter said that "runners" are so out of control that they're handing out their cards in hospital emergency rooms. Another underwriter said that many tow truck drivers are also acting as “runners.”

A number of approaches for reducing high premiums were discussed, including:

• Offering discounted insurance through affinity groups such as professional organizations and churches. One insurer suggested that a significant premium discount could be offered if a group agrees to include claims limits, such as limiting the numbers of visits to a medical provider, in their policies. Superintendent Serio said he'd like to discuss affinity group purchasing further.

• Establishing a Brooklyn Market Assistance Plan through which insurers could "bid" to write individual policies. The Plan would assist auto insurance consumers in Brooklyn in obtaining voluntary market coverage (non-standard or standard policies).

• Enacting a "padlock law" to allow the authorities to close down "medical mills" which generate inflated claims.

• The participants also discussed how the State Department of Health could take additional action against the professional licenses of doctors and others who participate in insurance fraud.

• Two storefront brokers who serve lower-income Brooklyn communities told the gathering that insurance companies do not want to do business with them, leaving them with only high-cost, assigned risk plan policies to offer drivers. One of the brokers, who has worked in Brooklyn since 1959, said that his customers "are being discriminated against" because he's unable to get any insurer other than the assigned risk plan to write policies: "The first thing they'll ask when I call is the zip code.... I was just quoted $4,500 for someone with a good driving record." Most recently, one broker reported, "drivers are being asked to pay the entire premium up front" rather than monthly.

Members of the Brooklyn Auto Insurance Task Force who attended the meeting included Jay Shapiro, the former Chief of Rackets for Brooklyn District Attorney Charles Hynes, who is the task force’s ‘pro bono’ counsel on auto insurance; Brooklyn native John Reiersen, an underwriter and a member of the State Motor Vehicle Theft & Insurance Fraud Prevention Board; Fidel Del Valle, a former City Taxi & Limousine Commissioner, who is assisting the task force on insurance issues that have particularly hit Brooklyn’s livery industry hard; Fred Cirlin and Handel Edwards, two Brooklyn insurance brokers; Mike Fella from the National Insurance Crime Bureau; Robert Kleinberg, a Brooklyn chiropractor who is helping in the fight against fraudulent billing practices; New York State Insurance Department First Deputy Superintendent Lou Pietroluongo

Among the many insurance companies who participated included AIG, Allstate, Country-wide, Geico, Liberty Mutual, Metlife, Nationwide, Progessive, Prudential, Travelers and Statewide.

The task force will be meeting again later this fall.