BP MARKOWITZ STATEMENT ON NEW YORK COURT OF APPEALS DECISION DETERMINING THAT AUTO INSURANCE RATE INFORMATION IS SUBJECT TO FOIL REQUESTS

Brooklyn Borough President Marty Markowitz hailed a decision today from the New York Court of Appeals determining that certain data from auto insurance companies must be made available for public scrutiny in response to Freedom of Information Law (FOIL) requests.

“Today’s decision upholds the right of Brooklynites and all New Yorkers to know if they’re being taken advantage of by auto insurers,” said BP Markowitz. “Insurance companies need to be held accountable, and drivers rightfully expect government to investigate potential ‘redlining’ and other wrongdoing and to provide protection if needed.”

In December, 2004, BP Markowitz filed suit against the State Insurance Department after the Department denied his FOIL requests for specific records on the number of policies issued, renewed or canceled by insurers in each Brooklyn zip code. The Borough President was interested in finding out whether auto insurance companies were engaged in the practice of “redlining”—refusing to issue or renew a policy, or canceling coverage, based solely on the geographical location of the applicant or insured.

The auto insurance crisis has been a top priority of BP Markowitz, who along with Assemblymember James Brennan, convened a task force in 2002 to examine ways of reforming the industry, reducing fraud and lowering exorbitant premiums, particularly for residents of Brooklyn. In a 2004 report by this task force entitled Putting the Brakes on Out of Control Rates: An Examination of Brooklyn’s Record High Automobile Insurance Rates and How They Can Be Reduced, Brooklyn’s rates were blamed on fraudulent claims and the lack of resources allocated to fight fraud. The task force made several recommendations to offset the high cost of auto insurance, including the regulation of illegitimate health clinics that abuse the no-fault system; increasing funding and coordinating law enforcement efforts to combat abuses of the no-fault insurance system; establishing a State Office of Automobile Insurance Consumer Advocate & Counsel to protect the rights of customers; preventing insurers from unfairly discriminating against Brooklyn drivers by prohibiting a driver’s zip code to be a factor in determining the cost of insurance; and encouraging national insurance companies to offer more affordable coverage in areas with disproportionately high premiums.

Both New York City and New York State have since passed laws aimed at curbing auto insurance fraud, including the targeting of “medical mills” established specifically to file fraudulent no-fault claims. Medical clinics that handle a large volume of no-fault claims are now required to file information about their ownership, management and the percentage of medical bills that are no-fault claims. The hiring of “runners” to help solicit individuals to participate in no-fault fraud has also been outlawed.