NY State Senate Bill 2011-S988

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 30, 2012	print number 988a
Jan 30, 2012	amend (t) and recommit to insurance
Jan 04, 2012	referred to insurance
Jan 05, 2011	referred to insurance

Bill Amendments

Original

A (Active)

co-Sponsors

2011-S988 - Details

See Assembly Version of this Bill:: A4100
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§401 & 405, add §405-a, Ins L; amd §405, FIN SERV Ldd §231, amd §846-m, Exec L; amd §97-mm, St Fin L; amd §§170.10, 170.15, 176.05 & 176.15, add §175.50, Pen L; amd §§1310, 1311 & 1349, CPLR; add §201-a, amd §§401 & 502, V & T L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S7091, A10877
2013-2014: S6318

2011-S988 - Summary

Grants the superintendent of financial services authority to investigate fraudulent activities, such as motor vehicle operators who drive with no insurance coverage, and those who misrepresent their principal place of residence or where their motor vehicle is principally garaged and operated; authorizes the superintendent of financial services to accept reports of suspected fraudulent insurance actions; requires insurance companies and self-insurers to report incidents of insurance fraud to the department of financial services; provides for compensation to law enforcement agencies for the prosecution of insurance fraud

2011-S988 - Sponsor Memo

                                BILL NUMBER:S988

TITLE OF BILL:
An act
to amend the insurance law, the executive law, the state finance law,
the penal law, the civil practice law and rules and the vehicle and
traffic law, in relation to
insurance fraud; to establish the temporary task force on motor vehicle
insurance fraud; and providing for the repeal of certain provisions upon
the expiration thereof

PURPOSE:
The purpose of this bill is reduce the incidence of auto insurance fraud
including fraud committed by those who misrepresent where they live,
operate their automobile, and garage such vehicle for insurance
coverage purposes. By misrepresenting where such automobile operators
truly live and operate their motor vehicle, these persons obtain
inappropriate reductions in their auto insurance premium rates and
such costs are shifted to other law abiding automobile owners.

SUMMARY OF PROVISIONS:
Section 1: Adds a new Insurance Law section 401(e) to explicitly expand
the authority of the superintendent of Insurance, under the Insurance
Fraud prevention Article, to investigate fraudulent activities with
regard to motor vehicle operators who have not secured automobile
insurance coverage or who misrepresent the principle place where such

automobiles are garaged and operated.

Section 2: Amends Insurance Law section 405(a) to authorize the
Insurance Frauds Bureau to accept reports of suspected fraudulent
insurance transactions from any self insurer with regard to health
insurance coverage, motor vehicle liability coverage, or workers
compensation coverage.

Section 3: Adds a new Insurance Law section 405-a to be included
within Insurance Fraud prevention Article of the Insurance Law. This
new section allows members of the general public, if they believe
that a fraudulent insurance act has been committed or is about to
take place to report such activity or transaction to the Attorney
General, local District Attorney or the Insurance Fraud Bureau of the
Insurance Department. If the Insurance Frauds Bureau recommends to
the Attorney General or local District Attorney to commence an
enforcement action or the Attorney General or District Attorney
commences an action based on the information provided by the member
of the general public, then such person is entitled to receive a cash
award. The award can be up to 15% of the proceeds of the action or
settlement not to exceed $ 25,000. The court shall base such award
decision on the extent such person substantially contributed to the
prosecution of the action.

Section 4: Amends Insurance Law section 406 to add the Attorney
General and District Attorney to the class of agencies that are
included within the purview of this section of the law.

Section 5: Amends Insurance Law section 2133 to expand the scope of
prohibition for any insurance company, insurance agent, broker, or


other person who knowingly possesses, transfers or uses a forged
insurance identification card to also include other false insurance
documents which purports to evince insurance coverage when it is not
in effect or is at limits less than those stated on the document.

Section 6: Adds a new Executive Law 231 to establish the Insurance
Fraud Reward program under the supervision of the State police. This
section establishes a state-wide Insurance Fraud Reward Program to
pay awards to persons who provide information that leads to the
arrest and conviction of persons guilty of fraudulent insurance acts.
The superintendent of police shall establish a toll-free hotline and
website to collect tips and information from the general public to
assist the State police in the investigation and prosecution of
insurance fraud crimes. Awards from $ 1,000 up to $ 5,000 can be paid
for information leading to the arrest and conviction of insurance
fraud crimes. The State police shall obtain money to finance this
award program from the State police Motor vehicle Law Enforcement
Account. Money from this account is received in part from surcharges
levied on all motor vehicle insurance policies issued in New York
pursuant to Insurance Law section 9110.

Section 7: Amends Executive Law section B46-m(2) (a) to provide that
at least 1/4 of the money received by the State police Motor Vehicle
Law Enforcement Account (collected from a surcharge placed on all
auto insurance policies sold in New York to combat auto insurance
fraud) after January 1, 2011 shall be used to support activities
undertaken by local District Attorney's to combat auto insurance fraud.

Section 8: Amends State Finance Law section 97-mm(3), the State police
Motor Vehicle Law Enforcement Account, to authorize funds to be used
for the Insurance Fraud Reward Program established pursuant to
Executive Law section 231.

Section 9: Amends State Finance Law section 97-mm(4) to require that
the State police Annual Auto Theft Prevention Report also include its
efforts to curb automobile insurance fraud.

Section 10: Amends Penal Law section 170.10 to add a new (6) to the
list of documents that the forgery of is considered to be forgery in
the Second Degree. The new document that, if forged, would be forgery
in the Second Degree are certificates of insurance or an insurance
identification card.

Section 11: Amends Penal Law section 170.15 (Forgery in the First
Degree) to include as forgery in the first degree, the fraudulent
making, completion, or alteration of 10 or more written instruments
such as certificates of insurance or insurance identification cards.

Section 12: Adds a new Penal Law section 175.50 to make it a class E
felony to offer a false application for motor vehicle insurance or
registration. Under this provision, anyone who submits to the
Department of Motor Vehicles or to an auto insurer (to obtain an auto
insurance policy or insurance identification card) any document that
contains a false statement or information with regard to where such
applicant resides or where such applicant's motor vehicle is garaged
or operated and such document is used directly or indirectly to
register an automobile shall be a class E felony.


Section 13: Amends Penal Law section 176.05 which defines the term
"insurance fraud". Under this bill, the term "insurance fraud" is
expanded to include any false document used to secure either
insurance coverage, file an insurance policy claim, or obtain payment
for personal lines insurance coverages (i.e. auto and homeowners
insurance). Under current law, only false documents that are used to
secure commercial lines policies or money for claims against a
commercial lines policy (i.e general liability or business property
policies) are considered to be insurance fraud. This bill expands the
types of insurance policies that persons cannot lie about to obtain
coverage or claims payment to include personal lines coverages such
as motor vehicle liability or homeowners insurance.

Section 14: Amends Penal Law section 176.15 to expand the scope of
insurance fraud in the 4th degree to include the operation of a motor
vehicle on a public highway when such operator is insured by a policy
issued under the laws of another state, but such person in fact
principally lives and garages their vehicle in New York.

Section 15: Amends CPLR section 1310(4-b) to include within the
definition of "specified felony offense" the conviction of a person
of crimes of Insurance Fraud pursuant to Article 176 of the Penal
Law. CPLR Article 13-A (of which section 1310 is the definitions
section of this Article) lays out the procedure to seize ill-gotten
profits from criminal activity. Hence, illegally secured profits
obtained by persons from fraudulent insurance acts can be seized and
used for other law enforcement purposes.

Section 16: Amends CPLR section 1311(3-a) to add the commission of
crimes of insurance fraud to the list of crimes in which forfeiture
actions may be taken to seize illegally secured assets or fruits of
the crime.

Section 17: Amends CPLR section 1311(11) to give the Insurance Frauds
Bureau notice of a forfeiture of assets proceeding and stipulation or
settlement agreement of such action which is based on a felony of
insurance fraud.

Section 18: Amends CPLR section 1349(4) which deals with the disposal
of property obtained from a criminal activity forfeiture action so
that the Insurance Frauds Bureau of the Insurance Department can
obtain those assets. Funds secured from this source can be used to
finance the operations of the Insurance Fraud Bureau or the Insurance
Fraud Prevention program established by Insurance Law section 40S-a.

Section 19: A new Vehicle & Traffic Law section 201-a is added to give
law enforcement personnel access to any individual's street address
provided to the Department of Motor Vehicles to register a motor
vehicle in this state or to obtain a driver's license in this State.
This information can be used to ensure that those who submit
information to the Department submit accurate information of their
residence and where they operate and garage their motor vehicle for
auto insurance premium rating purposes.

Section 20: Amends Vehicle & Traffic Law section 401(1) to require that
all those who file an application to register an automobile in New
York must provide their street address where they reside if such


person uses a Post Office box for their location of residence. The
purpose of this provision is to curtail those that submit fraudulent
information on where such applicants truly reside.

Section 21: Amends Vehicle & Traffic Law section 502(1) to require
that all those who file an application for a driver's license must
provide
their street address where they reside if such person uses a Post
Office box for their location of residence.

Section 22: Creates a Temporary Task Force on Motor Vehicle Insurance
Fraud. The Superintendent of Insurance and Commissioner of Motor
Vehicles shall establish a working group to examine the feasibility
and cost effectiveness of developing methodologies to identify owners
and operators of motor vehicles who misrepresent the principle place
of their residence and where they operate and garage their automobiles.

The Task Force shall have 13 members, with the Superintendent of
Insurance and Commissioner of Motor Vehicles to act as Co-Chairs. The
remaining members are to be appointed as follows: four by the
Governor, 2 by the Temporary President of the Senate, 2 by the
Speaker of the Assembly, one each respectively by each chambers
minority leaders. Task Force members should include representatives
of insurers actively writing motor vehicle insurance, insurance
agents and brokers that actively sell automobile insurance, 2
representatives of companies that collect, disperse and synthesize
data, and 2 representatives of the motor vehicle insurance buying
public. The Task Force should have its recommendations and report
completed within 15 months of the. effective date of this act.

JUSTIFICATION:
The purpose of this bill is to address the ever increasing incidence
of auto insurance fraud in this state. More particularly, this bill
seeks to address insurance fraud that is perpetrated against those
law abiding operators of motor vehicles that accurately and
truthfully disclose where they reside and operate and garage their
vehicles, regardless of where they live. Some who live in high auto
insurance rate areas, such as the New York City metropolitan area,
misrepresent where they live, garage and operate their automobiles
and fraudulently maintain that they live in low insurance premium
rate areas that are either Up-state or out of state.

There is a prevalence of in-state residents misrepresenting their true
place of residence so that they can obtain much lower auto insurance
rates. Instead of disclosing their true address in high insurance
premium places such as, for example, Bronx or Kings Counties, they
state that they live in lower insurance premium rated territories
such as North Carolina, Pennsylvania, or up-state counties that have
much lower incidents of motor vehicle theft, car accidents and
judgments relegated to motor vehicle accidents. This issue was a
topic of a report released in 2006 by the State Commission on
Investigations. since 2006, the commission has sunsetted, however,
senator Klein is revising end updating this report. The new Report
"Auto Insurance Rate Evasion" is scheduled to he released in June
2010. This hill implements many of the Suggested changes contained in
that Report.


This situation or rate evasion, while artificially lowering the
insurance rates of those who fraudulently do not disclose their true
residential address, substantially increases the insurance premiums
paid by those who truthfully disclose their actual place of residence
and where they operated and garaged their cars. This hill should
bring more equity to those who purchase auto insurance coverages in
this state and ensure that everyone pays their fair share for auto
insurance coverages that matches their actuarial risk of potential
physical damage or theft of their automobiles, risk of personal
injury or liability exposure due to judgments obtain in local courts.
The amendments to this bill deleted bill section , because it was
already incorporated in the law and includes a new hill section 14 to
expand the hill's scope related to those who live in New York, but
inappropriately obtain auto insurance coverage in another state under
false pretenses.

LEGISLATIVE HISTORY:
2010 - S.7091 - Referred to Insurance

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
The 60th day after becoming law with provisions.

2011-S988 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   988

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, the executive law, the state  finance
  law,  the  penal law, the civil practice law and rules and the vehicle
  and traffic law, in relation to  insurance  fraud;  to  establish  the
  temporary  task  force on motor vehicle insurance fraud; and providing
  for the repeal of certain provisions upon the expiration thereof

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 401 of the insurance law is amended by adding a new
subsection (e) to read as follows:
  (E)  THE  SUPERINTENDENT  SHALL  HAVE BROAD AUTHORITY PURSUANT TO THIS
CHAPTER TO INVESTIGATE FRAUDULENT ACTIVITIES WITH REGARD TO MOTOR  VEHI-
CLE  DRIVERS  THAT  OPERATE  AUTOMOBILES WITH NO INSURANCE COVERAGE, AND
MOTOR VEHICLE  INSUREDS  WHO  MISREPRESENT  THE  PRINCIPAL  PLACE  WHERE
INSURED  MOTOR  VEHICLES ARE GARAGED AND OPERATED. OPERATING MOTOR VEHI-
CLES WITHOUT PROPER INSURANCE IN VIOLATION OF ARTICLE SIX OF THE VEHICLE
AND TRAFFIC LAW IS A SIGNIFICANT DANGER TO THE  PUBLIC  BECAUSE  DRIVERS
ARE  UNABLE  TO  COMPENSATE INDIVIDUALS FOR PERSONAL INJURIES, DEATH AND
PROPERTY DAMAGE THEY INFLICT UPON OTHERS.   FURTHERMORE,  MOTOR  VEHICLE
INSUREDS  WHO  MISREPRESENT  THE PRINCIPAL PLACE WHERE SUCH VEHICLES ARE
GARAGED AND OPERATED IMPROPERLY  SHIFT  THEIR  HIGH  LIABILITY  EXPOSURE
COSTS TO OTHER MOTOR VEHICLE INSUREDS THAT DO NOT FACE SUCH HIGH LIABIL-
ITY RISK AND INSURANCE PREMIUM COSTS.
  S 2. Subsection (a) of section 405 of the insurance law, as amended by
chapter 499 of the laws of 2009, is amended to read as follows:
  (a)  Any  person  licensed or registered pursuant to the provisions of
this chapter, and any person engaged in the  business  of  insurance  or
life  settlement  in this state who is exempted from compliance with the
licensing requirements of this chapter, including  the  state  insurance

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD05004-01-1

S. 988                              2

fund  of  this state, who has reason to believe that an insurance trans-
action or life settlement act may be fraudulent, or has knowledge that a
fraudulent insurance transaction or fraudulent life  settlement  act  is
about  to take place, or has taken place shall, within thirty days after
determination by such person that the transaction appears to be  fraudu-
lent,  send  to  the insurance frauds bureau on a form prescribed by the
superintendent, the information requested by the  form  and  such  addi-
tional  information  relative to the factual circumstances of the trans-
action and the parties involved as the superintendent may  require.  The
insurance  frauds  bureau  shall  accept reports of suspected fraudulent
insurance transactions or fraudulent life settlement acts from any  self
insurer,  including  but  not  limited to self insurers providing health
insurance coverage or those defined in section  fifty  of  the  workers'
compensation  law,  and  shall  treat such reports as any other received
pursuant to this section.   THE INSURANCE  FRAUDS  BUREAU  SHALL  ACCEPT
REPORTS  OF  SUSPECTED  FRAUDULENT  INSURANCE TRANSACTIONS FROM ANY SELF
INSURER INCLUDING, BUT NOT LIMITED TO, SELF  INSURERS  PROVIDING  HEALTH
INSURANCE COVERAGE, THOSE PROVIDING MOTOR VEHICLE LIABILITY INSURANCE OR
THOSE  DEFINED  IN  SECTION  FIFTY OF THE WORKERS' COMPENSATION LAW, AND
SHALL TREAT SUCH REPORTS AS ANY OTHER RECEIVED PURSUANT TO THIS SECTION.
  S 3.  The insurance law is amended by adding a new  section  405-a  to
read as follows:
  S  405-A.   COMPENSATION FOR REPORT OF INSURANCE FRAUD TO LAW ENFORCE-
MENT AUTHORITIES. (A)  ANY  PERSON,  OTHER  THAN  PERSONS  DESCRIBED  IN
SUBSECTION  (A)  OF  SECTION FOUR HUNDRED FIVE OF THIS ARTICLE AND OTHER
THAN A PERSON WHO HAS RECEIVED AN AWARD PURSUANT TO SECTION TWO  HUNDRED
THIRTY-ONE  OF THE EXECUTIVE LAW, WHO HAS REASON TO BELIEVE THAT A FRAU-
DULENT INSURANCE ACT PROHIBITED PURSUANT TO ARTICLE ONE  HUNDRED  SEVEN-
TY-SIX  OF  THE PENAL LAW HAS BEEN COMMITTED OR THAT AN INSURANCE TRANS-
ACTION MAY BE FRAUDULENT, OR HAS KNOWLEDGE THAT A  FRAUDULENT  INSURANCE
TRANSACTION  IS  ABOUT TO TAKE PLACE, OR HAS TAKEN PLACE MAY REPORT SUCH
ACT OR TRANSACTION AND ANY ADDITIONAL INFORMATION RELATIVE TO THE FACTU-
AL CIRCUMSTANCES OF THE TRANSACTION AND  THE  PARTIES  INVOLVED  TO  THE
ATTORNEY GENERAL, DISTRICT ATTORNEY OR INSURANCE FRAUDS BUREAU.
  (B)  IF THE INSURANCE FRAUDS BUREAU RECOMMENDS TO THE ATTORNEY GENERAL
OR DISTRICT ATTORNEY TO COMMENCE AN ACTION, OR IF THE  ATTORNEY  GENERAL
OR  DISTRICT  ATTORNEY COMMENCES AN ACTION BASED ON INFORMATION PROVIDED
BY A PERSON PURSUANT TO SUBSECTION (A) OF THIS SECTION, THEN SUCH PERSON
SHALL BE ENTITLED TO RECEIVE AN AWARD OF NOT MORE THAN  FIFTEEN  PERCENT
OF  THE PROCEEDS OF THE ACTION OR A SETTLEMENT OF THE CLAIM IN AN AMOUNT
NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS.   THE  ATTORNEY  GENERAL  OR
DISTRICT  ATTORNEY  SHALL  RECOMMEND  TO  THE COURT WHEN A SETTLEMENT IS
ENTERED THE AMOUNT OF SUCH AWARD. THE COURT SHALL BASE SUCH AWARD  DECI-
SION  ON THE EXTENT TO WHICH THE PERSON SUBSTANTIALLY CONTRIBUTED TO THE
PROSECUTION OF THE ACTION.
  S 4. Section 406 of the insurance law, as amended by  chapter  499  of
the laws of 2009, is amended to read as follows:
  S 406. Immunity. In the absence of fraud or bad faith, no person shall
be  subject  to  civil  liability,  and  no civil cause of action of any
nature shall arise against such person for any: (i) information relating
to  suspected  fraudulent  insurance  transactions  or  fraudulent  life
settlement acts furnished to law enforcement officials, their agents and
employees;  (ii)  information relating to suspected fraudulent insurance
transactions or fraudulent  life  settlement  acts  furnished  to  other
persons  [subject  to  the  provisions  of this chapter]; and (iii) such
information furnished in reports to THE  ATTORNEY  GENERAL,  A  DISTRICT

S. 988                              3

ATTORNEY,  the  insurance  frauds bureau, its agents or employees or any
state agency investigating fraud  or  misconduct  relating  to  workers'
compensation  insurance,  its  agents or employees. Nor shall the super-
intendent or any employee of the insurance frauds bureau, in the absence
of  fraud or bad faith, be subject to civil liability and no civil cause
of action of any nature shall arise against them by virtue of the publi-
cation of any report or bulletin related to the official  activities  of
the  insurance  frauds  bureau.  Nothing  [herein]  IN  THIS  SECTION is
intended to abrogate or modify in any way any common  law  privilege  of
immunity heretofore enjoyed by any person.
  S  5.  Section  2133 of the insurance law, as amended by chapter 77 of
the laws of 1994, is amended to read as follows:
  S 2133. [Forged] FALSE INSURANCE DOCUMENTS AND FORGED insurance  iden-
tification  cards.  Any  insurance  company,  insurance agent, insurance
broker or other person who or which, personally or by the action  of  an
employee or agent, KNOWINGLY possesses, transfers or uses: (A) ANY DOCU-
MENT  WHICH  PURPORTS TO EVINCE INSURANCE COVERAGE WHEN SUCH COVERAGE IS
NOT IN EFFECT OR IS IN EFFECT AT LIMITS LESS THAN THOSE  STATED  IN  THE
DOCUMENT;  OR  (B)  a  forged  insurance identification card for a motor
vehicle, having knowledge, personally or through such employee or agent,
of the fact that such insurance identification card,  when  issued,  did
not  actually  represent  an  owner's policy of liability insurance or a
financial security bond issued by an insurance company  licensed  to  do
business  in  this  state  covering the motor vehicle identified on such
card, shall be liable for payment to the people of this state of a civil
penalty in a sum not exceeding one thousand dollars for the  first  such
violation  and a sum not exceeding five thousand dollars for each subse-
quent violation. For the purposes  of  this  section  the  term  "forged
insurance  identification card" means a written insurance identification
card which has been falsely made, completed or  altered,  and  the  term
"falsely  made, completed or altered" shall have the same meaning as set
forth in section 170.00 of the penal law.
  S 6. The executive law is amended by adding a new section 231 to  read
as follows:
  S  231.  INSURANCE  FRAUD REWARD PROGRAM; ESTABLISHMENT. 1. THE SUPER-
INTENDENT SHALL ESTABLISH A STATEWIDE INSURANCE FRAUD REWARD PROGRAM  TO
PAY  REWARDS  FOR  INFORMATION  LEADING  TO THE ARREST AND CONVICTION OF
PERSONS GUILTY OF A FRAUDULENT INSURANCE ACT AS DEFINED IN  ARTICLE  ONE
HUNDRED SEVENTY-SIX OF THE PENAL LAW.
  2. THE SUPERINTENDENT SHALL CAUSE TO BE ESTABLISHED A TOLL-FREE STATE-
WIDE  TELEPHONE NUMBER AND INTERNET WEBSITE FOR USE IN COLLECTING INFOR-
MATION TO ASSIST IN THE INVESTIGATION AND PROSECUTION OF INSURANCE FRAUD
CRIMES.
  3. THE SUPERINTENDENT IS AUTHORIZED TO PROVIDE REWARDS OF  UP  TO  ONE
THOUSAND DOLLARS FOR INFORMATION LEADING TO THE ARREST AND CONVICTION OF
INDIVIDUALS  GUILTY  OF A FRAUDULENT INSURANCE ACT AS DEFINED IN ARTICLE
ONE HUNDRED SEVENTY-SIX OF THE PENAL LAW.
  4. THE SUPERINTENDENT IS AUTHORIZED TO PROVIDE REWARDS OF UP  TO  FIVE
THOUSAND DOLLARS FOR INFORMATION LEADING TO THE ARREST AND CONVICTION OF
INDIVIDUALS  GUILTY OF A SPECIFIED OFFENSE IN ARTICLE ONE HUNDRED SEVEN-
TY-SIX OF THE PENAL LAW.
  5. NO PERSON  WHO  RECEIVES  COMPENSATION  PURSUANT  TO  SECTION  FOUR
HUNDRED  FIVE-A  OF  THE  INSURANCE  LAW  SHALL BE ELIGIBLE FOR A REWARD
PURSUANT TO THIS SECTION.
  6. THE SUPERINTENDENT SHALL DISBURSE THE REWARDS PROVIDED FOR IN  THIS
SECTION  FROM  THE  MONEYS  APPROPRIATED TO THE DIVISION OF STATE POLICE

S. 988                              4

FROM THE STATE POLICE MOTOR VEHICLE LAW ENFORCEMENT ACCOUNT  ESTABLISHED
BY SECTION NINETY-SEVEN-MM OF THE STATE FINANCE LAW, AS ADDED BY SECTION
THREE HUNDRED EIGHTY-SEVEN OF CHAPTER FIFTY-FIVE OF THE LAWS OF NINETEEN
HUNDRED NINETY-TWO.
  S  7. Paragraph (a) of subdivision 2 of section 846-m of the executive
law, as amended by section 6 of part T of chapter  57  of  the  laws  of
2000, is amended to read as follows:
  (a) The moneys received by the fund shall be expended in a manner that
is  consistent  with  the  plan of operation, pursuant to appropriation,
only to reimburse costs incurred by provider agencies for pilot  program
activities  relating  to the detection, prevention or reduction of motor
vehicle theft and motor vehicle insurance fraud; PROVIDED, HOWEVER, THAT
ON AND AFTER JANUARY FIRST, TWO THOUSAND ELEVEN, AT LEAST ONE-QUARTER OF
THE MONEYS RECEIVED BY  THE  FUND  SHALL  BE  DISBURSED  EXCLUSIVELY  TO
SUPPORT EFFORTS UNDERTAKEN BY DISTRICT ATTORNEYS TO DETECT, IDENTIFY AND
PROSECUTE FRAUD PERTAINING TO ARTICLE FIFTY-ONE OF THE INSURANCE LAW.
  S  8.  Subdivision  3  of  section  97-mm of the state finance law, as
amended by section 5 of part T of chapter 56 of the  laws  of  2009,  is
amended to read as follows:
  3.  Nine  million  one  hundred thousand dollars annually of the state
police motor vehicle law enforcement account, following appropriation by
the legislature and allocation by the director of the budget,  shall  be
made available for the state operation expenses of the division of state
police  including but not limited to the costs of activities relating to
the detection, prosecution or reduction of automobile theft and  related
purposes,  AND  THE  COSTS  OF THE INSURANCE FRAUD REWARD PROGRAM ESTAB-
LISHED PURSUANT TO SECTION TWO HUNDRED THIRTY-ONE OF THE EXECUTIVE  LAW.
All  other  funds  of  the  state  police  motor vehicle law enforcement
account, following appropriation by the legislature  and  allocation  by
the director of the budget, shall be made available for the state opera-
tion  expenses of the division of state police including but not limited
to the costs of activities relating to highway safety and public securi-
ty.
  S 9. Subdivision 4 of section 97-mm of the state finance law, as added
by section 8 of part T of chapter 57 of the laws of 2000, is amended  to
read as follows:
  4.  The  superintendent of state police, no later than March fifteenth
of each year, shall furnish to the governor, the speaker of the assembly
and the temporary president of  the  senate,  a  report  detailing  each
programmatic  component associated with the automobile theft AND AUTOMO-
BILE INSURANCE FRAUD prevention activities of the state police  for  the
previous year. The report shall include, but not be limited to, a break-
down  of the funds allocated to each programmatic component, including a
breakdown by personal and nonpersonal services and number of  employees,
and  the  number  of  arrests,  convictions, and vehicle recoveries. The
report shall also contain an analysis of  the  incidence  of  automobile
theft  AND AUTOMOBILE INSURANCE FRAUD for each of the state police troop
jurisdictions.
  S 10.  Subdivision 5 of section 170.10 of the penal law is amended and
a new subdivision 6 is added to read as follows:
  5. A prescription of a duly licensed physician or other person author-
ized to issue the same for any drug or any instrument or device used  in
the  taking  or  administering  of  drugs  for  which  a prescription is
required by law[.]; OR
  6. A CERTIFICATE OF INSURANCE OR AN INSURANCE IDENTIFICATION CARD,  AS
DEFINED IN SECTION THREE HUNDRED ELEVEN OF THE VEHICLE AND TRAFFIC LAW.

S. 988                              5

  S 11. Section 170.15 of the penal law is amended to read as follows:
S 170.15 Forgery in the first degree.
  A person is guilty of forgery in the first degree when, with intent to
defraud,  deceive  or injure another, he OR SHE falsely makes, completes
or alters [a]:
  1. TEN OR MORE WRITTEN INSTRUMENTS; OR
  2. A written instrument which is or purports to be, or which is calcu-
lated to become or to represent if completed:
  [1.] (A) Part of an issue of money, stamps, securities or other  valu-
able instruments issued by a government or governmental instrumentality;
or
  [2.] (B) Part of an issue of stock, bonds or other instruments repres-
enting  interests in or claims against a corporate or other organization
or its property.
  Forgery in the first degree is a class C felony.
  S 12. The penal law is amended by adding a new section 175.50 to  read
as follows:
S 175.50 OFFERING  A  FALSE  APPLICATION  FOR MOTOR VEHICLE INSURANCE OR
           REGISTRATION.
  A PERSON IS GUILTY OF OFFERING A FALSE APPLICATION FOR  MOTOR  VEHICLE
INSURANCE OR REGISTRATION WHEN KNOWING THAT ANY DOCUMENT HE OR SHE FILES
WITH  THE DEPARTMENT OF MOTOR VEHICLES OR AN INSURER PROVIDING LIABILITY
INSURANCE FOR A MOTOR VEHICLE CONTAINS A FALSE STATEMENT OR FALSE INFOR-
MATION WITH REGARD TO WHERE HE OR SHE RESIDES OR WHERE HIS OR HER  MOTOR
VEHICLE IS GARAGED AND OPERATED.
  OFFERING  A FALSE APPLICATION FOR MOTOR VEHICLE INSURANCE OR REGISTRA-
TION IS A CLASS E FELONY.
  S 13. Subdivision 1 of section 176.05 of the penal law, as amended  by
chapter  635  of  the laws of 1996 and as designated by chapter 2 of the
laws of 1998, is amended to read as follows:
  1. A fraudulent insurance act is committed by any person who, knowing-
ly and with intent to defraud  presents,  causes  to  be  presented,  or
prepares with knowledge  or belief that it will be presented to or by an
insurer,  self insurer, or purported insurer, or purported self insurer,
or any agent thereof, any written statement as part of,  or  in  support
of,  an  application  for the issuance of, or the rating of a commercial
insurance policy, or certificate  or  evidence  of  self  insurance  for
commercial  OR  PERSONAL insurance or commercial OR PERSONAL self insur-
ance, or a claim for payment or other benefit pursuant to  an  insurance
policy  or  self  insurance program for commercial or personal insurance
which he knows to: (i) contain materially false  information  concerning
any  fact material thereto; or (ii) conceal, for the purpose of mislead-
ing, information concerning any fact material thereto.
  S 14. Section 176.15 of the penal law, as amended by  chapter  515  of
the laws of 1986, is amended to read as follows:
S 176.15 Insurance fraud in the fourth degree.
  A  person  is  guilty  of insurance fraud in the fourth degree when he
[commits] OR SHE:
  1. COMMITS a fraudulent insurance act and  thereby  wrongfully  takes,
obtains or withholds, or attempts to wrongfully take, obtain or withhold
property with a value in excess of one thousand dollars; OR
  2. OPERATES A MOTOR VEHICLE ON A PUBLIC HIGHWAY, WHEN SUCH MOTOR VEHI-
CLE  IS INSURED BY A POLICY ISSUED UNDER THE LAWS OF ANOTHER STATE, WHEN
SUCH PERSON MAINTAINS HIS OR HER PRINCIPAL RESIDENCE IN  THIS  STATE  OR
SUCH MOTOR VEHICLE IS PRINCIPALLY GARAGED IN THIS STATE, AND SUCH INSUR-
ANCE POLICY WAS ISSUED UPON ANY WRITTEN OR ORAL STATEMENT BY SUCH PERSON

S. 988                              6

THAT  HE  OR  SHE  PRINCIPALLY  RESIDES IN SUCH OTHER STATE OR THAT SUCH
MOTOR VEHICLE IS PRINCIPALLY GARAGED IN SUCH OTHER STATE.
  Insurance fraud in the fourth degree is a class E felony.
  S  15.  Paragraph  (c) of subdivision 4-b of section 1310 of the civil
practice law and rules, as added by chapter 655 of the laws of 1990,  is
amended and a new paragraph (d) is added to read as follows:
  (c)  a  conviction  of  a  person  for  a violation of section 220.09,
220.16, 220.34 or 220.39 of the penal law, or a conviction of a criminal
defendant for a violation of section 221.30 of the penal law,  or  where
the  accusatory  instrument  charges  any such felony, conviction upon a
plea of guilty to a felony for which the plea is otherwise authorized by
law, together with evidence which: (i) provides substantial indicia that
the defendant used the real property to engage in a  continual,  ongoing
course  of  conduct involving the unlawful mixing, compounding, manufac-
turing, warehousing, or packaging of controlled substances or where  the
conviction  is for a violation of section 221.30 of the penal law, mari-
juana, as part of an illegal trade or business for gain; and (ii) estab-
lishes, where the conviction is for possession of a controlled substance
or where the conviction is for a violation  of  section  221.30  of  the
penal  law,  marijuana, that such possession was with the intent to sell
it[.]; OR
  (D) A CONVICTION OF A PERSON OF ANY  FELONY  DEFINED  IN  ARTICLE  ONE
HUNDRED  SEVENTY-SIX OF THE PENAL LAW, OR OF AN ATTEMPT OR CONSPIRACY TO
COMMIT ANY SUCH FELONY, PROVIDED THAT SUCH ATTEMPT OR CONSPIRACY CONSTI-
TUTES A FELONY.
  S 16. Subdivision 3-a of section 1311 of the civil  practice  law  and
rules,  as  added by chapter 655 of the laws of 1990, is amended to read
as follows:
  3-a. Conviction of a person in a criminal action  upon  an  accusatory
instrument  which  includes  one  or  more  of the felonies specified in
subdivision four-b of section thirteen hundred ten of this  article,  of
any  felony other than such felonies, shall not preclude a defendant, in
any subsequent proceeding under this article where that conviction is at
issue, from adducing evidence that the conduct underlying the conviction
would not establish the elements of any of  the  felonies  specified  in
such subdivision other than the one to which the criminal defendant pled
guilty.  If the defendant does adduce such evidence, the burden shall be
upon the claiming authority to prove, by clear and convincing  evidence,
that  the conduct underlying the criminal conviction would establish the
elements of the felony specified in such subdivision. Nothing  contained
in  this  subdivision  shall  affect the validity of a settlement of any
forfeiture action negotiated between the claiming authority and a crimi-
nal defendant contemporaneously with the taking of a plea of guilty in a
criminal action to any felony defined in article ONE HUNDRED SEVENTY-SIX
OR two hundred twenty, or section 221.30 or 221.55 of the penal law,  or
to a felony conspiracy to commit the same.
  S  17. Paragraphs (a) and (b) of subdivision 11 of section 1311 of the
civil practice law and rules, as amended by section 47 of  part  A-1  of
chapter 56 of the laws of 2010, are amended to read as follows:
  (a)  Any  stipulation or settlement agreement between the parties to a
forfeiture action shall be filed with the clerk of the  court  in  which
the forfeiture action is pending. No stipulation or settlement agreement
shall  be  accepted  for filing unless it is accompanied by an affidavit
from the claiming authority that written notice of  the  stipulation  or
settlement agreement, including the terms of such, has been given to the
office  of  victim  services,  the  [state] division of criminal justice

S. 988                              7

services, and in the case of a forfeiture based on a felony  defined  in
article two hundred twenty or section 221.30 or 221.55 of the penal law,
to  the  [state  division]  OFFICE  of  ALCOHOLISM  AND  substance abuse
services.  IN  THE THE CASE OF A FORFEITURE BASED ON A FELONY DEFINED IN
ARTICLE ONE HUNDRED SEVENTY-SIX OF THE PENAL LAW, SUCH NOTICE SHALL ALSO
BE GIVEN TO THE INSURANCE FRAUDS BUREAU OF THE INSURANCE DEPARTMENT.
  (b) No judgment or order of forfeiture shall be  accepted  for  filing
unless  it  is  accompanied  by an affidavit from the claiming authority
that written notice of judgment or order, including the terms  of  such,
has been given to the office of victim services, the [state] division of
criminal  justice  services,  and in the case of a forfeiture based on a
felony defined in article two hundred twenty or section 221.30 or 221.55
of the penal law, to the  [state  division]  OFFICE  of  ALCOHOLISM  AND
substance  abuse services. IN THE CASE OF A FORFEITURE BASED ON A FELONY
DEFINED IN ARTICLE ONE HUNDRED SEVENTY-SIX OF THE PENAL LAW, SUCH NOTICE
SHALL ALSO BE GIVEN TO THE INSURANCE  FRAUDS  BUREAU  OF  THE  INSURANCE
DEPARTMENT.
  S  18.  Subdivision  4  of  section 1349 of the civil practice law and
rules, as amended by section 48 of part A-1 of chapter 56 of the laws of
2010, is amended to read as follows:
  4. The claiming authority shall report the disposal  of  property  and
collection  of  assets  pursuant to this section to the office of victim
services, the [state] division of criminal justice services  [and],  the
[state  division]  OFFICE of ALCOHOLISM AND substance abuse services AND
THE INSURANCE FRAUDS BUREAU OF THE INSURANCE DEPARTMENT.
  S 19. The vehicle and traffic law is amended by adding a  new  section
201-a to read as follows:
  S  201-A.  ACCESS  TO  INFORMATION.  THE  DEPARTMENT  SHALL  ALLOW LAW
ENFORCEMENT PERSONNEL ACCESS TO ANY INDIVIDUAL'S STREET ADDRESS PROVIDED
PURSUANT TO PARAGRAPH B OF SUBDIVISION ONE OF SECTION FOUR  HUNDRED  ONE
AND SUBDIVISION ONE OF SECTION FIVE HUNDRED TWO OF THIS CHAPTER.
  S  20.  Paragraph b of subdivision 1 of section 401 of the vehicle and
traffic law, as amended by chapter 222 of the laws of 1996,  is  amended
to read as follows:
  b.  Every  owner  of a motor vehicle which shall be operated or driven
upon the public highways  of  this  state  shall,  except  as  otherwise
expressly  provided, cause to be presented, by mail or otherwise, to the
office or a branch office of the commissioner, or to any  agent  of  the
commissioner,  constituted  as  provided in this chapter, an application
for registration addressed to the commissioner, and on  a  blank  to  be
prepared  under  the  direction of and furnished by the commissioner for
that purpose, containing: (a) a brief description of the  motor  vehicle
to be registered, including the name and factory number of such vehicle,
and  such  other facts as the commissioner shall require; (b) the weight
of the vehicle upon which the registration fee is based if  the  fee  is
based  on  weight;  (c)  the name and residence, including county of the
owner of such motor vehicle, PROVIDED THAT IF THE APPLICANT USES A  POST
OFFICE BOX WHEN PROVIDING A RESIDENCE ADDRESS, SUCH APPLICANT SHALL ALSO
PROVIDE  THE  STREET  ADDRESS  AT  WHICH HE OR SHE RESIDES; (d) provided
that, if such motor vehicle is used or to be used  as  an  omnibus,  the
applicant  also  shall  so  certify,  and in the case of an omnibus also
certify as to the seating capacity, and if the omnibus is to be operated
wholly within a municipality pursuant to a franchise other than a  fran-
chise  express  or  implied  in  articles  of incorporation upon certain
streets designated in such franchise, those facts shall also  be  certi-
fied,  and  a  certified copy of such franchise furnished to the commis-

S. 988                              8

sioner; (e) provided, that, if such motor vehicle is an altered  livery,
the  applicant  shall  so  furnish a certified copy of the length of the
center panel of such vehicle, provided, however, that  the  commissioner
shall  require  such  proof, as he OR SHE may determine is necessary, in
the application for registration and provided  further,  if  the  center
panel of such vehicle exceeds one hundred inches, the commissioner shall
require  proof  that  such  vehicle is in compliance with all applicable
federal and state motor vehicle safety standards;  and  (f)  such  addi-
tional  facts  or evidence as the commissioner may require in connection
with the application for registration. Every owner of  a  trailer  shall
also  make application for the registration thereof in the manner herein
provided for an application to  register  a  motor  vehicle,  but  shall
contain a statement showing the manufacturer's number or other identifi-
cation satisfactory to the commissioner and no number plate for a trail-
er  issued  under  the  provisions  of subdivision three of section four
hundred two of this [chapter] ARTICLE shall be transferred  to  or  used
upon  any  other  trailer than the one for which number plate is issued.
The commissioner shall require proof, in the application  for  registra-
tion,  or  otherwise, as such commissioner may determine, that the motor
vehicle for which registration is applied for is  equipped  with  lights
conforming  in  all respects to the requirements of this chapter, and no
motor vehicle shall be registered unless it shall appear by such  proofs
that such motor vehicle is equipped with proper lights as aforesaid. The
said application shall contain or be accompanied by such evidence of the
ownership  of  the  motor vehicle described in the application as may be
required by the commissioner or his OR HER agent and which, with respect
to new vehicles, shall include, unless otherwise  specifically  provided
by  the  commissioner,  the manufacturer's statement of origin. Applica-
tions received by an agent of the commissioner shall be forwarded to the
commissioner as he OR SHE shall direct for filing.  No  application  for
registration  shall be accepted unless the applicant is at least sixteen
years of age AND HAS SIGNED SUCH APPLICATION ATTESTING TO THE TRUTH  AND
VERACITY OF THE FACTS STATED THEREIN.
  S  21. Subdivision 1 of section 502 of the vehicle and traffic law, as
amended by chapter 639 of the laws  of  2006,  is  amended  to  read  as
follows:
  1.  Application for license.  Application for a driver's license shall
be made to the commissioner.  The fee prescribed by law may be submitted
with such application. The applicant shall furnish such proof of identi-
ty, age, ADDRESS OF HIS OR HER RESIDENCE and fitness as may be  required
by the commissioner. WHEN PROVIDING HIS OR HER ADDRESS OF RESIDENCE, THE
APPLICANT  SHALL  PROVIDE THE STREET ADDRESS AT WHICH HE OR SHE RESIDES.
EACH APPLICANT SHALL SIGN HIS OR HER APPLICATION ATTESTING TO THE  TRUTH
AND  VERACITY  OF  THE  FACTS  STATED THEREIN. The commissioner may also
provide that the application procedure shall include  the  taking  of  a
photo  image  or  images  of  the applicant in accordance with rules and
regulations prescribed by the commissioner. In addition, the commission-
er also shall require that the applicant provide his or her social secu-
rity number and provide space on the application so that  the  applicant
may register in the New York state organ and tissue donor registry under
section  forty-three  hundred ten of the public health law. In addition,
an applicant for a  commercial  driver's  license  who  will  operate  a
commercial  motor vehicle in interstate commerce shall certify that such
applicant meets the requirements to operate a commercial motor  vehicle,
as  set  forth in public law 99-570, title XII, and title 49 of the code
of federal regulations, and all regulations promulgated  by  the  United

S. 988                              9

States  secretary of transportation under the hazardous materials trans-
portation act. Upon a determination that  the  holder  of  a  commercial
driver's  license  has  made  any  false  statement, with respect to the
application  for  such  license,  the  commissioner  shall  revoke  such
license.
  S 22. Temporary task force on motor vehicle insurance fraud.  (a)  The
superintendent of insurance and the commissioner of motor vehicles shall
convene a temporary task force on motor vehicle insurance fraud to exam-
ine  the  feasibility and cost-effectiveness of developing methodologies
to identify owners and operators of motor vehicles who misrepresent  the
principal  place  of  their  residence or where their motor vehicles are
garaged and operated. Such task force shall develop a plan on the feasi-
bility of implementing a statewide registry of the street  addresses  of
the  owners  and  operators  of motor vehicles in this state. The report
issued by this task force shall:
  (1) investigate the  feasibility  of  developing  and  implementing  a
statewide  registry  of the addresses of motor vehicle owners and opera-
tors;
  (2) detail the costs of establishing such a registry;
  (3) identify the parameters for entering and retrieving data from such
registry; and
  (4) evaluate the value of establishing such  registry  in  identifying
motor vehicle owners and operators who misrepresent their place of resi-
dence or where their vehicle is garaged and operated.
  (b)  The task force shall consist of 13 members. The superintendent of
insurance and the commissioner of motor vehicles,  or  their  designees,
shall  be  members  of  the task force and shall be the co-chairs of the
task force. A representative of the New York Automobile  Insurance  Plan
shall  be  a  member of the task force. The remaining ten members of the
task force shall be appointed as follows: four shall be appointed by the
governor, two shall be appointed  by  the  temporary  president  of  the
senate, two shall be appointed by the speaker of the assembly, one shall
be  appointed  by  the  minority  leader of the senate, and one shall be
appointed by the minority leader of the assembly. Of such  ten  members:
three  shall be representatives of insurers actively writing motor vehi-
cle insurance in this state,  three  shall  be  representatives  of  the
insurance  agent  and  broker  community  actively selling motor vehicle
insurance in this state, two shall be representatives of  companies  the
business of which involves collecting, dispersing and synthesizing data,
and  two  shall be representatives of the motor vehicle insurance buying
public.
  (c) The task force shall submit a  report  to  the  governor  and  the
legislature  of  its  findings,  conclusions  and recommendations within
fifteen months of the effective date of this section.
  S 23. This act shall take effect on the sixtieth day  after  it  shall
have  become  a  law, provided that section twenty-two of this act shall
expire and be deemed repealed eighteen months after the  effective  date
of this act.

co-Sponsors

2011-S988A (ACTIVE) - Details

See Assembly Version of this Bill:: A4100
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§401 & 405, add §405-a, Ins L; amd §405, FIN SERV Ldd §231, amd §846-m, Exec L; amd §97-mm, St Fin L; amd §§170.10, 170.15, 176.05 & 176.15, add §175.50, Pen L; amd §§1310, 1311 & 1349, CPLR; add §201-a, amd §§401 & 502, V & T L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S7091, A10877
2013-2014: S6318

2011-S988A (ACTIVE) - Summary

2011-S988A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S988A            REVISED 02/02/12

TITLE OF BILL:
An act
to amend the insurance law, the financial services law,
the executive law, the state finance law,
the penal law, the civil practice law and rules and the vehicle and
traffic law, in relation to
insurance fraud; to establish the temporary task force on motor vehicle
insurance fraud; and providing for the repeal of certain provisions upon
the expiration thereof

PURPOSE:
The purpose of this bill is reduce the incidence of auto insurance
fraud including fraud committed by those who misrepresent where they
live, operate their automobile, and garage such vehicle for insurance
coverage purposes. By misrepresenting where such automobile operators
truly live and operate their motor vehicle, these persons obtain
inappropriate reductions in their auto insurance premium rates and
such costs are shifted to other law abiding automobile owners.

SUMMARY OF PROVISIONS:
Section 1: Adds a new Insurance Law section 401{d) to explicitly
expand the authority of the superintendent of Insurance, under the
Insurance Fraud prevention Article, to investigate fraudulent
activities with regard to motor vehicle operators who have not

secured automobile insurance coverage or who misrepresent the
principle place where such automobiles are garaged and operated.

Section 2: Amends Insurance Law section 405{a) to authorize the
Insurance Frauds Bureau to accept reports of suspected fraudulent
insurance transactions from any self insurer with regard to health
insurance coverage, motor vehicle liability coverage, or workers
compensation coverage.

Section 3: Adds a new Insurance Law section 405-a to be included
within Insurance Fraud prevention Article of the Insurance Law. This
new section allows members of the general public, if they believe
that a fraudulent insurance act has been committed or is about to
take place to report such activity or transaction to the Attorney
General, local District Attorney or the Insurance Fraud Bureau of the
Insurance Department. If the Insurance Frauds Bureau recommends to
the Attorney General or local District Attorney to Commence an
enforcement action or the Attorney General or District Attorney
commences an action based on the information provided by the member
of the general public, then such person is entitled to receive a cash
award. The award can be up to 15% of the proceeds of the action or
settlement not to exceed $ 25,000. The court shall base such award
decision on the extent such person substantially
contributed to the prosecution of the action.

Section 4: Amends Insurance Law section 2133 to expand the scope of
prohibition for any insurance company, insurance agent, broker, or
other person who knowingly possesses, transfers or uses a forged
insurance identification card to also include other false insurance
documents which purports to evince insurance coverage when it is not
in effect or is at limits less than those stated on the document.

Section 5: Amends Financial Services Law section 405 to add the
Attorney General and District Attorney to the class of agencies that
are included within the purview of this section of the law.

Section 6: Adds a. new Executive Law 231 to establish the Insurance
Fraud Reward program under the supervision of the State police. This
section establishes a state-wide Insurance Fraud Reward Program to
pay awards to persons who provide information that leads to the
arrest and conviction of persons guilty of fraudulent insurance
acts. The superintendent of police shall establish a toll-free
hotline and website to collect tips and information from the general
public to assist the State police in the investigation and
prosecution of insurance fraud crimes.
Awards from $ 1,000 up to $ 5,000 can be paid for information leading
to the arrest and conviction of insurance fraud crimes. The State
police shall obtain money to finance this award program from the
State police Motor vehicle Law Enforcement Account. Money from this
account is received in part from surcharges levied on all motor
vehicle insurance policies issued in New York pursuant to Insurance
Law section 9110.

Section 7: Amends Executive Law section 846-m(2) (a) to provide that
at least 1/4 of the money received by the State police Motor Vehicle
Law Enforcement Account (collected from a surcharge placed on all
auto insurance policies sold in New York to combat auto insurance
fraud) after January 1, 2011 shall be used to support activities
undertaken by local District Attorney's to combat auto insurance fraud.

Section 8: Amends State Finance Law section 97-mm(3), the State police
Motor Vehicle Law Enforcement Account, to authorize funds to be used
for the Insurance Fraud Reward Program established pursuant to
Executive Law section 231.

Section 9: Amends State Finance Law section 97-mm(4) to"require that
the State police Annual Auto Theft Prevention Report also include its
efforts to curb automobile insurance fraud.

Section 10: Amends Penal Law section 170.10 to add a new (6) to the
list of documents that the forgery of is considered to be forgery in
the Second Degree. The new document that, if forged, would be forgery
in the Second Degree are certificates of insurance or an insurance
identification card.

Section 11: Amends Penal Law section 170.15 (Forgery in the First
Degree) to include as forgery in the first degree, the fraudulent

making, completion, or alteration of 10 or more written instruments
such as certificates of insurance or insurance identification cards.

Section 12: Adds a new Penal Law section 175.50 to make it a class E
felony to offer a false application for motor vehicle insurance or
registration. Under this provision, anyone who submits to the
Department of Motor Vehicles or to an auto insurer (to obtain an auto
insurance policy or insurance identification card) any document that
contains a false statement or information with regard to where such
applicant resides or where such applicant's motor vehicle is garaged
or operated and such document is used directly or indirectly to
register an automobile shall be a class E felony.

Section 13: Amends Penal Law section 176.05 which defines the term
"insurance fraud". Under this bill, the term "insurance fraud" is
expanded to include any false document used to secure either
insurance coverage, file an insurance policy claim, or obtain payment
for personal lines insurance coverages (Le. auto and homeowners
insurance). Under current law, only false documents that are used to
secure commercial lines policies or money for claims against a
commercial lines policy (i.e general liability or business property
policies) are considered to be insurance fraud. This bill expands the
types of insurance policies that persons cannot lie about to obtain
coverage or claims payment to include personal lines coverages such
as motor vehicle liability or homeowners insurance.

Section 14: Amends Penal Law section 176.15 to expand the scope of
insurance fraud in the 4th degree to include the operation of a motor
vehicle on a public highway when such operator is insured by a policy
issued under the laws of another state, but such person in fact
principally lives and garages their vehicle in New York.

Section 15: Amends CPLR section 1310(4-b) to include within the
definition of "specified felony offense" the conviction of a person
of crimes of Insurance Fraud pursuant to Article 176 of the Penal
Law. CPLR Article 13-A (of which section 1310 is the definitions
section of this Article) lays out the procedure to seize ill-gotten
profits from criminal activity. Hence, illegally secured profits
obtained by persons from fraudulent insurance acts can be seized and
used for other law enforcement purposes.

Section 16: Amends CPLR section 1311(3-a} to add the commission of
crimes of insurance fraud to the list of crimes in which forfeiture
actions may be taken to seize illegally secured assets or fruits of
the crime.

Section 17: Amends CPLR section 1311(11} to give the Insurance Frauds
Bureau notice of a forfeiture of assets proceeding and stipulation or
settlement agreement of such action which is based on a felony of
insurance fraud.

Section 18: Amends CPLR section 1349(4} which deals with the disposal
of property obtained from a criminal activity forfeiture action so
that the Insurance Frauds Bureau of the Insurance Department can
obtain those assets. Funds secured from this source can be used to
finance the operations of the Insurance Fraud Bureau or the Insurance
Fraud Prevention program established by Insurance Law section 40S-a.

Section 19: A new Vehicle & Traffic Law section 201-a is added to give
law enforcement personnel access to any individual's street address
provided to the Department of Motor Vehicles to register a motor
vehicle
in this state or to obtain a driver's license in this State. This
information can be used to ensure that those who submit information
to the Department submit accurate information of their residence and
where they operate and garage their motor vehicle for auto insurance
premium rating purposes.

Section 20: Amends Vehicle & Traffic Law section 401(1) to require
that all those who file an application to register an automobile in
New York must provide their street address where they reside if such
person uses a Post Office box for their location of residence. The
purpose of this provision is to curtail those that submit
fraudulent information on where such applicants truly reside.

Section 21: Amends Vehicle & Traffic Law section 502(1) to require
that all those who file an application for a driver's license must
provide
their street address where they reside if such person uses a Post
Office box for their location of residence.

Section 22: Creates a Temporary Task Force on Motor Vehicle Insurance
Fraud. The Superintendent of Insurance and Commissioner of Motor
Vehicles shall establish a working group to examine the feasibility
and cost effectiveness of developing methodologies to identify owners
and operators of motor vehicles who misrepresent the principle place
of their residence and where they operate and garage their automobiles.

The Task Force shall have 13 members, with the Superintendent of
Insurance and commissioner of Motor Vehicles to act as Co-Chairs. The
remaining members a.re to be appointed as follows: four by the
Governor, 2 by the Temporary President of the Senate, 2 by the
Speaker of the Assembly, one each respectively by each chambers
minority leaders. Task Force members should include representatives
of insurers actively writing motor vehicle insurance, insurance
agents and brokers that actively sell automobile insurance, 2
representatives of companies that collect, disperse and synthesize
data, and 2 representatives of the motor vehicle insurance buying
public. The Task Force should have its recommendations and report
completed within 15 months of the. effective date of this act.

JUSTIFICATION:

The purpose of this bill is to address the ever increasing incidence
of auto insurance fraud in this state. More particularly, this bill
seeks to address insurance fraud that is perpetrated against those
law abiding operators of motor vehicles that accurately and
truthfully disclose where they reside and operate and garage their
vehicles, regardless of where they live. Some who live in high auto
insurance rate areas, such as the New York City metropolitan area,
misrepresent where they live, garage and operate their automobiles
and fraudulently maintain that they live in low insurance premium
rate areas that are either up-state or out of state.

There is a prevalence of in-state residents misrepresenting their true
place of residence so that they can obtain much lower auto insurance
rates. Instead of disclosing their true address in high insurance
premium places such as, for example, Bronx or Kings Counties, they
state that they live in lower insurance premium rated territories
such as North
Carolina, Pennsylvania, or up-state counties that have much lower
incidents of motor vehicle theft, car accidents and judgments
relegated to motor vehicle accidents. This issue was a topic of a
report released in 2006 by the State Commission on Investigations.
since 2006, the commission has sunsetted, however, senator Klein is
revising end updating this report. The new Report "Auto Insurance
Rate Evasion" is scheduled to he released in June 2010. This hill
implements many of the Suggested changes contained in that Report.

This situation or rate evasion, while artificially lowering the
insurance rates of those who fraudulently do not disclose their true
residential address, substantially increases the insurance premiums
paid by those who truthfully disclose their actual place of residence
and where they operated and garaged their cars. This hill should
bring more equity to those who purchase auto insurance coverages in
this state and ensure that everyone pays their fair share for auto
insurance coverages that matches their actuarial risk of potential
physical damage or theft of their automobiles, risk of personal
injury or liability exposure due to judgments obtain in local courts.
The amendments to this bill deleted bill section , because it was
already incorporated in the law and includes a new hill section 14 to
expand the hill's scope related to those who live in New York, but
inappropriately obtain auto insurance coverage in another state
under false pretenses.

LEGISLATIVE HISTORY:
2010 - S.7091 - Referred to Insurance

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
The 60th day after becoming law with provisions.

2011-S988A (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 988--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sens. KLEIN, CARLUCCI, SAVINO, VALESKY -- read twice and
  ordered printed, and when printed to be committed to the Committee  on
  Insurance  --  recommitted to the Committee on Insurance in accordance
  with Senate Rule 6, sec. 8  --  committee  discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

AN ACT to amend the insurance law, the financial services law, the exec-
  utive  law,  the  state finance law, the penal law, the civil practice
  law and rules and the vehicle and traffic law, in relation  to  insur-
  ance  fraud;  to  establish  the temporary task force on motor vehicle
  insurance fraud; and providing for the repeal  of  certain  provisions
  upon the expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 401 of the insurance law is amended by adding a new
subsection (d) to read as follows:
  (D) THE SUPERINTENDENT SHALL HAVE BROAD  AUTHORITY  PURSUANT  TO  THIS
CHAPTER  TO INVESTIGATE FRAUDULENT ACTIVITIES WITH REGARD TO MOTOR VEHI-
CLE DRIVERS THAT OPERATE AUTOMOBILES WITH  NO  INSURANCE  COVERAGE,  AND
MOTOR  VEHICLE  INSUREDS  WHO  MISREPRESENT  THE  PRINCIPAL  PLACE WHERE
INSURED MOTOR VEHICLES ARE GARAGED AND OPERATED. OPERATING  MOTOR  VEHI-
CLES WITHOUT PROPER INSURANCE IN VIOLATION OF ARTICLE SIX OF THE VEHICLE
AND  TRAFFIC  LAW  IS A SIGNIFICANT DANGER TO THE PUBLIC BECAUSE DRIVERS
ARE UNABLE TO COMPENSATE INDIVIDUALS FOR PERSONAL  INJURIES,  DEATH  AND
PROPERTY  DAMAGE  THEY  INFLICT UPON OTHERS.  FURTHERMORE, MOTOR VEHICLE
INSUREDS WHO MISREPRESENT THE PRINCIPAL PLACE WHERE  SUCH  VEHICLES  ARE
GARAGED  AND  OPERATED  IMPROPERLY  SHIFT  THEIR HIGH LIABILITY EXPOSURE
COSTS TO OTHER MOTOR VEHICLE INSUREDS THAT DO NOT FACE SUCH HIGH LIABIL-
ITY RISK AND INSURANCE PREMIUM COSTS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05004-06-2

S. 988--A                           2

  S 2. Subsection (a) of section 405 of the insurance law, as amended by
section 7 of part A of chapter 62 of the laws of  2011,  is  amended  to
read as follows:
  (a)  Any  person  licensed or registered pursuant to the provisions of
this chapter, and any person engaged in the  business  of  insurance  or
life  settlement  in this state who is exempted from compliance with the
licensing requirements of this chapter, including  the  state  insurance
fund  of  this state, who has reason to believe that an insurance trans-
action or life settlement act may be fraudulent, or has knowledge that a
fraudulent insurance transaction or fraudulent life  settlement  act  is
about  to take place, or has taken place shall, within thirty days after
determination by such person that the transaction appears to be  fraudu-
lent, send to the superintendent on a form prescribed by the superinten-
dent, the information requested by the form and such additional informa-
tion  relative  to  the factual circumstances of the transaction and the
parties involved as the superintendent may require.  The  superintendent
shall  accept  reports of suspected fraudulent insurance transactions or
fraudulent life settlement acts from any self insurer, including but not
limited to self insurers providing health insurance  coverage  or  those
defined  in  section  fifty  of the workers' compensation law, and shall
treat such reports as any other received pursuant to this section.   THE
SUPERINTENDENT  SHALL  ACCEPT  REPORTS OF SUSPECTED FRAUDULENT INSURANCE
TRANSACTIONS FROM ANY SELF INSURER INCLUDING, BUT NOT LIMITED  TO,  SELF
INSURERS  PROVIDING  HEALTH  INSURANCE  COVERAGE,  THOSE PROVIDING MOTOR
VEHICLE LIABILITY INSURANCE OR THOSE DEFINED IN  SECTION  FIFTY  OF  THE
WORKERS'  COMPENSATION  LAW,  AND  SHALL TREAT SUCH REPORTS AS ANY OTHER
RECEIVED PURSUANT TO THIS SECTION.
  S 3. The insurance law is amended by adding a  new  section  405-a  to
read as follows:
  S  405-A.   COMPENSATION FOR REPORT OF INSURANCE FRAUD TO LAW ENFORCE-
MENT AUTHORITIES. (A)  ANY  PERSON,  OTHER  THAN  PERSONS  DESCRIBED  IN
SUBSECTION  (A)  OF  SECTION FOUR HUNDRED FIVE OF THIS ARTICLE AND OTHER
THAN A PERSON WHO HAS RECEIVED AN AWARD PURSUANT TO SECTION TWO  HUNDRED
THIRTY-ONE  OF THE EXECUTIVE LAW, WHO HAS REASON TO BELIEVE THAT A FRAU-
DULENT INSURANCE ACT PROHIBITED PURSUANT TO ARTICLE ONE  HUNDRED  SEVEN-
TY-SIX  OF  THE PENAL LAW HAS BEEN COMMITTED OR THAT AN INSURANCE TRANS-
ACTION MAY BE FRAUDULENT, OR HAS KNOWLEDGE THAT A  FRAUDULENT  INSURANCE
TRANSACTION  IS  ABOUT TO TAKE PLACE, OR HAS TAKEN PLACE MAY REPORT SUCH
ACT OR TRANSACTION AND ANY ADDITIONAL INFORMATION RELATIVE TO THE FACTU-
AL CIRCUMSTANCES OF THE TRANSACTION AND  THE  PARTIES  INVOLVED  TO  THE
ATTORNEY GENERAL, DISTRICT ATTORNEY OR SUPERINTENDENT.
  (B)  IF  THE  SUPERINTENDENT  RECOMMENDS  TO  THE  ATTORNEY GENERAL OR
DISTRICT ATTORNEY TO COMMENCE AN ACTION, OR IF THE ATTORNEY  GENERAL  OR
DISTRICT ATTORNEY COMMENCES AN ACTION BASED ON INFORMATION PROVIDED BY A
PERSON  PURSUANT  TO  SUBSECTION  (A)  OF THIS SECTION, THEN SUCH PERSON
SHALL BE ENTITLED TO RECEIVE AN AWARD OF NOT MORE THAN  FIFTEEN  PERCENT
OF  THE PROCEEDS OF THE ACTION OR A SETTLEMENT OF THE CLAIM IN AN AMOUNT
NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS.   THE  ATTORNEY  GENERAL  OR
DISTRICT  ATTORNEY  SHALL  RECOMMEND  TO  THE COURT WHEN A SETTLEMENT IS
ENTERED THE AMOUNT OF SUCH AWARD. THE COURT SHALL BASE SUCH AWARD  DECI-
SION  ON THE EXTENT TO WHICH THE PERSON SUBSTANTIALLY CONTRIBUTED TO THE
PROSECUTION OF THE ACTION.
  S 4. Section 2133 of the insurance law, as amended by  chapter  77  of
the laws of 1994, is amended to read as follows:
  S  2133. [Forged] FALSE INSURANCE DOCUMENTS AND FORGED insurance iden-
tification cards. Any  insurance  company,  insurance  agent,  insurance

S. 988--A                           3

broker  or  other person who or which, personally or by the action of an
employee or agent, KNOWINGLY possesses, transfers or uses: (A) ANY DOCU-
MENT WHICH PURPORTS TO EVINCE INSURANCE COVERAGE WHEN SUCH  COVERAGE  IS
NOT  IN  EFFECT  OR IS IN EFFECT AT LIMITS LESS THAN THOSE STATED IN THE
DOCUMENT; OR (B) a forged insurance  identification  card  for  a  motor
vehicle, having knowledge, personally or through such employee or agent,
of  the  fact  that such insurance identification card, when issued, did
not actually represent an owner's policy of  liability  insurance  or  a
financial  security  bond  issued by an insurance company licensed to do
business in this state covering the motor  vehicle  identified  on  such
card, shall be liable for payment to the people of this state of a civil
penalty  in  a sum not exceeding one thousand dollars for the first such
violation and a sum not exceeding five thousand dollars for each  subse-
quent  violation.  For  the  purposes  of  this section the term "forged
insurance identification card" means a written insurance  identification
card  which  has  been  falsely made, completed or altered, and the term
"falsely made, completed or altered" shall have the same meaning as  set
forth in section 170.00 of the penal law.
  S 5.  Section 405 of the financial services law, as added by section 1
of  part  A  of  chapter  62  of the laws of 2011, is amended to read as
follows:
  S 405. Immunity. In the absence of  fraud  or  bad  faith,  no  person
subject to the provisions of this chapter, the banking law or the insur-
ance  law  shall  be  subject  to civil liability, and no civil cause of
action of any nature shall arise against such person for any: (a) infor-
mation relating to suspected violations of the banking law or the insur-
ance law furnished  to  law  enforcement  officials,  their  agents  and
employees; (b) information relating to suspected violations of the bank-
ing  law or the insurance law furnished to other persons [subject to the
provisions of this chapter]; and (c) information furnished in reports to
THE ATTORNEY GENERAL, A DISTRICT  ATTORNEY,  the  financial  frauds  and
consumer  protection  unit,  its agents or employees or any state agency
investigating fraud or  misconduct  relating  to  financial  fraud,  its
agents or employees. The superintendent or any employee of the financial
frauds  and  consumer  protection  unit,  in the absence of fraud or bad
faith, shall not be subject to civil liability and  no  civil  cause  of
action  of any nature shall arise against the superintendent or any such
employee by virtue of the publication of any report or bulletin  related
to  the  official  activities  of  the  financial  frauds  and  consumer
protection unit. Nothing [herein] IN THIS SECTION is intended  to  abro-
gate  or  modify in any way any common law privilege or immunity hereto-
fore enjoyed by any person.
  S 6. The executive law is amended by adding a new section 231 to  read
as follows:
  S  231.  INSURANCE  FRAUD REWARD PROGRAM; ESTABLISHMENT. 1. THE SUPER-
INTENDENT SHALL ESTABLISH A STATEWIDE INSURANCE FRAUD REWARD PROGRAM  TO
PAY  REWARDS  FOR  INFORMATION  LEADING  TO THE ARREST AND CONVICTION OF
PERSONS GUILTY OF A FRAUDULENT INSURANCE ACT AS DEFINED IN  ARTICLE  ONE
HUNDRED SEVENTY-SIX OF THE PENAL LAW.
  2. THE SUPERINTENDENT SHALL CAUSE TO BE ESTABLISHED A TOLL-FREE STATE-
WIDE  TELEPHONE NUMBER AND INTERNET WEBSITE FOR USE IN COLLECTING INFOR-
MATION TO ASSIST IN THE INVESTIGATION AND PROSECUTION OF INSURANCE FRAUD
CRIMES.
  3. THE SUPERINTENDENT IS AUTHORIZED TO PROVIDE REWARDS OF  UP  TO  ONE
THOUSAND DOLLARS FOR INFORMATION LEADING TO THE ARREST AND CONVICTION OF

S. 988--A                           4

INDIVIDUALS  GUILTY  OF A FRAUDULENT INSURANCE ACT AS DEFINED IN ARTICLE
ONE HUNDRED SEVENTY-SIX OF THE PENAL LAW.
  4.  THE  SUPERINTENDENT IS AUTHORIZED TO PROVIDE REWARDS OF UP TO FIVE
THOUSAND DOLLARS FOR INFORMATION LEADING TO THE ARREST AND CONVICTION OF
INDIVIDUALS GUILTY OF A SPECIFIED OFFENSE IN ARTICLE ONE HUNDRED  SEVEN-
TY-SIX OF THE PENAL LAW.
  5.  NO  PERSON  WHO  RECEIVES  COMPENSATION  PURSUANT  TO SECTION FOUR
HUNDRED FIVE-A OF THE INSURANCE LAW  SHALL  BE  ELIGIBLE  FOR  A  REWARD
PURSUANT TO THIS SECTION.
  6.  THE SUPERINTENDENT SHALL DISBURSE THE REWARDS PROVIDED FOR IN THIS
SECTION FROM THE MONEYS APPROPRIATED TO THE  DIVISION  OF  STATE  POLICE
FROM  THE STATE POLICE MOTOR VEHICLE LAW ENFORCEMENT ACCOUNT ESTABLISHED
BY SECTION NINETY-SEVEN-MM OF THE STATE FINANCE LAW, AS ADDED BY SECTION
THREE HUNDRED EIGHTY-SEVEN OF CHAPTER FIFTY-FIVE OF THE LAWS OF NINETEEN
HUNDRED NINETY-TWO.
  S 7. Paragraph (a) of subdivision 2 of section 846-m of the  executive
law,  as  amended  by  section  6 of part T of chapter 57 of the laws of
2000, is amended to read as follows:
  (a) The moneys received by the fund shall be expended in a manner that
is consistent with the plan of  operation,  pursuant  to  appropriation,
only  to reimburse costs incurred by provider agencies for pilot program
activities relating to the detection, prevention or reduction  of  motor
vehicle theft and motor vehicle insurance fraud; PROVIDED, HOWEVER, THAT
ON AND AFTER JANUARY FIRST, TWO THOUSAND TWELVE, AT LEAST ONE-QUARTER OF
THE  MONEYS  RECEIVED  BY  THE  FUND  SHALL  BE DISBURSED EXCLUSIVELY TO
SUPPORT EFFORTS UNDERTAKEN BY DISTRICT ATTORNEYS TO DETECT, IDENTIFY AND
PROSECUTE FRAUD PERTAINING TO ARTICLE FIFTY-ONE OF THE INSURANCE LAW.
  S 8. Subdivision 3 of section 97-mm  of  the  state  finance  law,  as
amended  by  section  5  of part T of chapter 56 of the laws of 2009, is
amended to read as follows:
  3. Nine million one hundred thousand dollars  annually  of  the  state
police motor vehicle law enforcement account, following appropriation by
the  legislature  and allocation by the director of the budget, shall be
made available for the state operation expenses of the division of state
police including but not limited to the costs of activities relating  to
the  detection, prosecution or reduction of automobile theft and related
purposes, AND THE COSTS OF THE INSURANCE  FRAUD  REWARD  PROGRAM  ESTAB-
LISHED  PURSUANT TO SECTION TWO HUNDRED THIRTY-ONE OF THE EXECUTIVE LAW.
All other funds of  the  state  police  motor  vehicle  law  enforcement
account,  following  appropriation  by the legislature and allocation by
the director of the budget, shall be made available for the state opera-
tion expenses of the division of state police including but not  limited
to the costs of activities relating to highway safety and public securi-
ty.
  S 9. Subdivision 4 of section 97-mm of the state finance law, as added
by  section 8 of part T of chapter 57 of the laws of 2000, is amended to
read as follows:
  4. The superintendent of state police, no later than  March  fifteenth
of each year, shall furnish to the governor, the speaker of the assembly
and  the  temporary  president  of  the  senate, a report detailing each
programmatic component associated with the automobile theft AND  AUTOMO-
BILE  INSURANCE  FRAUD prevention activities of the state police for the
previous year. The report shall include, but not be limited to, a break-
down of the funds allocated to each programmatic component, including  a
breakdown  by personal and nonpersonal services and number of employees,
and the number of arrests,  convictions,  and  vehicle  recoveries.  The

S. 988--A                           5

report  shall  also  contain  an analysis of the incidence of automobile
theft AND AUTOMOBILE INSURANCE FRAUD for each of the state police  troop
jurisdictions.
  S 10.  Subdivision 5 of section 170.10 of the penal law is amended and
a new subdivision 6 is added to read as follows:
  5. A prescription of a duly licensed physician or other person author-
ized  to issue the same for any drug or any instrument or device used in
the taking or  administering  of  drugs  for  which  a  prescription  is
required by law[.]; OR
  6.  A CERTIFICATE OF INSURANCE OR AN INSURANCE IDENTIFICATION CARD, AS
DEFINED IN SECTION THREE HUNDRED ELEVEN OF THE VEHICLE AND TRAFFIC LAW.
  S 11. Section 170.15 of the penal law is amended to read as follows:
S 170.15 Forgery in the first degree.
  A person is guilty of forgery in the first degree when, with intent to
defraud, deceive or injure another, he OR SHE falsely  makes,  completes
or alters [a]:
  1. TEN OR MORE WRITTEN INSTRUMENTS; OR
  2. A written instrument which is or purports to be, or which is calcu-
lated to become or to represent if completed:
  [1.]  (A) Part of an issue of money, stamps, securities or other valu-
able instruments issued by a government or governmental instrumentality;
or
  [2.] (B) Part of an issue of stock, bonds or other instruments repres-
enting interests in or claims against a corporate or other  organization
or its property.
  Forgery in the first degree is a class C felony.
  S  12. The penal law is amended by adding a new section 175.50 to read
as follows:
S 175.50 OFFERING A FALSE APPLICATION FOR  MOTOR  VEHICLE  INSURANCE  OR
           REGISTRATION.
  A  PERSON  IS GUILTY OF OFFERING A FALSE APPLICATION FOR MOTOR VEHICLE
INSURANCE OR REGISTRATION WHEN KNOWING THAT ANY DOCUMENT HE OR SHE FILES
WITH THE DEPARTMENT OF MOTOR VEHICLES OR AN INSURER PROVIDING  LIABILITY
INSURANCE FOR A MOTOR VEHICLE CONTAINS A FALSE STATEMENT OR FALSE INFOR-
MATION  WITH REGARD TO WHERE HE OR SHE RESIDES OR WHERE HIS OR HER MOTOR
VEHICLE IS GARAGED AND OPERATED.
  OFFERING A FALSE APPLICATION FOR MOTOR VEHICLE INSURANCE OR  REGISTRA-
TION IS A CLASS E FELONY.
  S  13. The opening paragraph of subdivision 1 of section 176.05 of the
penal law, as amended by chapter 211 of the laws of 2011, is amended  to
read as follows:
  any written statement as part of, or in support of, an application for
the  issuance  of,  or  the rating of a commercial OR PERSONAL insurance
policy, or certificate or evidence  of  self  insurance  for  commercial
insurance  or  commercial  OR  PERSONAL  self  insurance, or a claim for
payment or other benefit pursuant to an insurance policy or self  insur-
ance  program  for commercial or personal insurance that he or she knows
to:
  S 14. Section 176.15 of the penal law, as amended by  chapter  515  of
the laws of 1986, is amended to read as follows:
S 176.15 Insurance fraud in the fourth degree.
  A  person  is  guilty  of insurance fraud in the fourth degree when he
[commits] OR SHE:
  1. COMMITS a fraudulent insurance act and  thereby  wrongfully  takes,
obtains or withholds, or attempts to wrongfully take, obtain or withhold
property with a value in excess of one thousand dollars; OR

S. 988--A                           6

  2. OPERATES A MOTOR VEHICLE ON A PUBLIC HIGHWAY, WHEN SUCH MOTOR VEHI-
CLE  IS INSURED BY A POLICY ISSUED UNDER THE LAWS OF ANOTHER STATE, WHEN
SUCH PERSON MAINTAINS HIS OR HER PRINCIPAL RESIDENCE IN  THIS  STATE  OR
SUCH MOTOR VEHICLE IS PRINCIPALLY GARAGED IN THIS STATE, AND SUCH INSUR-
ANCE POLICY WAS ISSUED UPON ANY WRITTEN OR ORAL STATEMENT BY SUCH PERSON
THAT  HE  OR  SHE  PRINCIPALLY  RESIDES IN SUCH OTHER STATE OR THAT SUCH
MOTOR VEHICLE IS PRINCIPALLY GARAGED IN SUCH OTHER STATE.
  Insurance fraud in the fourth degree is a class E felony.
  S 15. Paragraph (c) of subdivision 4-b of section 1310  of  the  civil
practice  law and rules, as added by chapter 655 of the laws of 1990, is
amended and a new paragraph (d) is added to read as follows:
  (c) a conviction of a  person  for  a  violation  of  section  220.09,
220.16, 220.34 or 220.39 of the penal law, or a conviction of a criminal
defendant  for  a violation of section 221.30 of the penal law, or where
the accusatory instrument charges any such  felony,  conviction  upon  a
plea of guilty to a felony for which the plea is otherwise authorized by
law, together with evidence which: (i) provides substantial indicia that
the  defendant  used the real property to engage in a continual, ongoing
course of conduct involving the unlawful mixing,  compounding,  manufac-
turing,  warehousing, or packaging of controlled substances or where the
conviction is for a violation of section 221.30 of the penal law,  mari-
juana, as part of an illegal trade or business for gain; and (ii) estab-
lishes, where the conviction is for possession of a controlled substance
or  where  the  conviction  is  for a violation of section 221.30 of the
penal law, marijuana, that such possession was with the intent  to  sell
it[.]; OR
  (D)  A  CONVICTION  OF  A  PERSON OF ANY FELONY DEFINED IN ARTICLE ONE
HUNDRED SEVENTY-SIX OF THE PENAL LAW, OR OF AN ATTEMPT OR CONSPIRACY  TO
COMMIT ANY SUCH FELONY, PROVIDED THAT SUCH ATTEMPT OR CONSPIRACY CONSTI-
TUTES A FELONY.
  S  16.  Subdivision  3-a of section 1311 of the civil practice law and
rules, as added by chapter 655 of the laws of 1990, is amended  to  read
as follows:
  3-a.  Conviction  of  a person in a criminal action upon an accusatory
instrument which includes one or  more  of  the  felonies  specified  in
subdivision  four-b  of section thirteen hundred ten of this article, of
any felony other than such felonies, shall not preclude a defendant,  in
any subsequent proceeding under this article where that conviction is at
issue, from adducing evidence that the conduct underlying the conviction
would  not  establish  the  elements of any of the felonies specified in
such subdivision other than the one to which the criminal defendant pled
guilty. If the defendant does adduce such evidence, the burden shall  be
upon  the claiming authority to prove, by clear and convincing evidence,
that the conduct underlying the criminal conviction would establish  the
elements  of the felony specified in such subdivision. Nothing contained
in this subdivision shall affect the validity of  a  settlement  of  any
forfeiture action negotiated between the claiming authority and a crimi-
nal defendant contemporaneously with the taking of a plea of guilty in a
criminal action to any felony defined in article ONE HUNDRED SEVENTY-SIX
OR  two hundred twenty, or section 221.30 or 221.55 of the penal law, or
to a felony conspiracy to commit the same.
  S 17. Paragraphs (a) and (b) of subdivision 11 of section 1311 of  the
civil  practice  law  and rules, as amended by section 47 of part A-1 of
chapter 56 of the laws of 2010, are amended to read as follows:
  (a) Any stipulation or settlement agreement between the parties  to  a
forfeiture  action  shall  be filed with the clerk of the court in which

S. 988--A                           7

the forfeiture action is pending. No stipulation or settlement agreement
shall be accepted for filing unless it is accompanied  by  an  affidavit
from  the  claiming  authority that written notice of the stipulation or
settlement agreement, including the terms of such, has been given to the
office  of  victim  services,  the  [state] division of criminal justice
services, and in the case of a forfeiture based on a felony  defined  in
article two hundred twenty or section 221.30 or 221.55 of the penal law,
to  the  [state  division]  OFFICE  of  ALCOHOLISM  AND  substance abuse
services. IN THE THE CASE OF A FORFEITURE BASED ON A FELONY  DEFINED  IN
ARTICLE ONE HUNDRED SEVENTY-SIX OF THE PENAL LAW, SUCH NOTICE SHALL ALSO
BE GIVEN TO THE INSURANCE FRAUDS BUREAU OF THE INSURANCE DEPARTMENT.
  (b)  No  judgment  or order of forfeiture shall be accepted for filing
unless it is accompanied by an affidavit  from  the  claiming  authority
that  written  notice of judgment or order, including the terms of such,
has been given to the office of victim services, the [state] division of
criminal justice services, and in the case of a forfeiture  based  on  a
felony defined in article two hundred twenty or section 221.30 or 221.55
of  the  penal  law,  to  the  [state division] OFFICE of ALCOHOLISM AND
substance abuse services. IN THE CASE OF A FORFEITURE BASED ON A  FELONY
DEFINED IN ARTICLE ONE HUNDRED SEVENTY-SIX OF THE PENAL LAW, SUCH NOTICE
SHALL  ALSO  BE  GIVEN  TO  THE INSURANCE FRAUDS BUREAU OF THE INSURANCE
DEPARTMENT.
  S 18. Subdivision 4 of section 1349 of  the  civil  practice  law  and
rules, as amended by section 48 of part A-1 of chapter 56 of the laws of
2010, is amended to read as follows:
  4.  The  claiming  authority shall report the disposal of property and
collection of assets pursuant to this section to the  office  of  victim
services,  the  [state] division of criminal justice services [and], the
[state division] OFFICE of ALCOHOLISM AND substance abuse  services  AND
THE SUPERINTENDENT OF FINANCIAL SERVICES.
  S  19.  The vehicle and traffic law is amended by adding a new section
201-a to read as follows:
  S 201-A.  ACCESS  TO  INFORMATION.  THE  DEPARTMENT  SHALL  ALLOW  LAW
ENFORCEMENT PERSONNEL ACCESS TO ANY INDIVIDUAL'S STREET ADDRESS PROVIDED
PURSUANT  TO  PARAGRAPH B OF SUBDIVISION ONE OF SECTION FOUR HUNDRED ONE
AND SUBDIVISION ONE OF SECTION FIVE HUNDRED TWO OF THIS CHAPTER.
  S 20. Paragraph b of subdivision 1 of section 401 of the  vehicle  and
traffic  law,  as amended by chapter 222 of the laws of 1996, is amended
to read as follows:
  b. Every owner of a motor vehicle which shall be  operated  or  driven
upon  the  public  highways  of  this  state  shall, except as otherwise
expressly provided, cause to be presented, by mail or otherwise, to  the
office  or  a  branch office of the commissioner, or to any agent of the
commissioner, constituted as provided in this  chapter,  an  application
for  registration  addressed  to  the commissioner, and on a blank to be
prepared under the direction of and furnished by  the  commissioner  for
that  purpose,  containing: (a) a brief description of the motor vehicle
to be registered, including the name and factory number of such vehicle,
and such other facts as the commissioner shall require; (b)  the  weight
of  the  vehicle  upon which the registration fee is based if the fee is
based on weight; (c) the name and residence,  including  county  of  the
owner  of such motor vehicle, PROVIDED THAT IF THE APPLICANT USES A POST
OFFICE BOX WHEN PROVIDING A RESIDENCE ADDRESS, SUCH APPLICANT SHALL ALSO
PROVIDE THE STREET ADDRESS AT WHICH HE  OR  SHE  RESIDES;  (d)  provided
that,  if  such  motor  vehicle is used or to be used as an omnibus, the
applicant also shall so certify, and in the  case  of  an  omnibus  also

S. 988--A                           8

certify as to the seating capacity, and if the omnibus is to be operated
wholly  within a municipality pursuant to a franchise other than a fran-
chise express or implied  in  articles  of  incorporation  upon  certain
streets  designated  in such franchise, those facts shall also be certi-
fied, and a certified copy of such franchise furnished  to  the  commis-
sioner;  (e) provided, that, if such motor vehicle is an altered livery,
the applicant shall so furnish a certified copy of  the  length  of  the
center  panel  of such vehicle, provided, however, that the commissioner
shall require such proof, as he OR SHE may determine  is  necessary,  in
the  application  for  registration  and provided further, if the center
panel of such vehicle exceeds one hundred inches, the commissioner shall
require proof that such vehicle is in  compliance  with  all  applicable
federal  and  state  motor  vehicle safety standards; and (f) such addi-
tional facts or evidence as the commissioner may require  in  connection
with  the  application  for registration. Every owner of a trailer shall
also make application for the registration thereof in the manner  herein
provided  for  an  application  to  register  a motor vehicle, but shall
contain a statement showing the manufacturer's number or other identifi-
cation satisfactory to the commissioner and no number plate for a trail-
er issued under the provisions of  subdivision  three  of  section  four
hundred  two  of  this [chapter] ARTICLE shall be transferred to or used
upon any other trailer than the one for which number  plate  is  issued.
The  commissioner  shall require proof, in the application for registra-
tion, or otherwise, as such commissioner may determine, that  the  motor
vehicle  for  which  registration is applied for is equipped with lights
conforming in all respects to the requirements of this chapter,  and  no
motor  vehicle shall be registered unless it shall appear by such proofs
that such motor vehicle is equipped with proper lights as aforesaid. The
said application shall contain or be accompanied by such evidence of the
ownership of the motor vehicle described in the application  as  may  be
required by the commissioner or his OR HER agent and which, with respect
to  new  vehicles, shall include, unless otherwise specifically provided
by the commissioner, the manufacturer's statement  of  origin.  Applica-
tions received by an agent of the commissioner shall be forwarded to the
commissioner  as  he  OR SHE shall direct for filing. No application for
registration shall be accepted unless the applicant is at least  sixteen
years  of age AND HAS SIGNED SUCH APPLICATION ATTESTING TO THE TRUTH AND
VERACITY OF THE FACTS STATED THEREIN.
  S 21. Subdivision 1 of section 502 of the vehicle and traffic law,  as
amended  by  section  2 of part CC of chapter 58 of the laws of 2011, is
amended to read as follows:
  1. Application for license. Application for a driver's  license  shall
be  made to the commissioner. The fee prescribed by law may be submitted
with such application. The applicant shall furnish such proof of identi-
ty, age, ADDRESS OF HIS OR HER RESIDENCE and fitness as may be  required
by  the  commissioner.   WHEN PROVIDING HIS OR HER ADDRESS OF RESIDENCE,
THE APPLICANT SHALL PROVIDE THE  STREET  ADDRESS  AT  WHICH  HE  OR  SHE
RESIDES.  EACH  APPLICANT SHALL SIGN HIS OR HER APPLICATION ATTESTING TO
THE TRUTH AND VERACITY OF THE FACTS STATED THEREIN. The commissioner may
also provide that the application procedure shall include the taking  of
a  photo  image  or images of the applicant in accordance with rules and
regulations prescribed by the commissioner. In addition, the commission-
er also shall require that the applicant provide his or her social secu-
rity number and provide space on the application so that  the  applicant
may register in the New York state organ and tissue donor registry under
section  forty-three  hundred ten of the public health law. In addition,

S. 988--A                           9

an applicant for a  commercial  driver's  license  who  will  operate  a
commercial  motor vehicle in interstate commerce shall certify that such
applicant meets the requirements to operate a commercial motor  vehicle,
as  set  forth in public law 99-570, title XII, and title 49 of the code
of federal regulations, and all regulations promulgated  by  the  United
States  secretary of transportation under the hazardous materials trans-
portation act. In addition,  an  applicant  for  a  commercial  driver's
license shall submit a medical certificate at such intervals as required
by  the  federal  motor  carrier safety improvement act of 1999 and Part
383.71(h) of title 49 of the code of  federal  regulations  relating  to
medical  certification  and  in a manner prescribed by the commissioner.
For purposes of this section and sections five hundred  three  and  five
hundred ten-a of this title, the term "medical certificate" shall mean a
form  substantially  in  compliance  with  the  form  set  forth in Part
391.43(h) of title 49 of the code of federal regulations. Upon a  deter-
mination  that  the holder of a commercial driver's license has made any
false statement, with respect to the application for such  license,  the
commissioner shall revoke such license.
  S  22.  Temporary task force on motor vehicle insurance fraud. (a) The
superintendent of financial services and the commissioner of motor vehi-
cles shall convene a temporary task force  on  motor  vehicle  insurance
fraud  to  examine  the feasibility and cost-effectiveness of developing
methodologies to identify owners and operators  of  motor  vehicles  who
misrepresent the principal place of their residence or where their motor
vehicles  are garaged and operated. Such task force shall develop a plan
on the feasibility of implementing a statewide registry  of  the  street
addresses  of  the owners and operators of motor vehicles in this state.
The report issued by this task force shall:
  (1) investigate the  feasibility  of  developing  and  implementing  a
statewide  registry  of the addresses of motor vehicle owners and opera-
tors;
  (2) detail the costs of establishing such a registry;
  (3) identify the parameters for entering and retrieving data from such
registry; and
  (4) evaluate the value of establishing such  registry  in  identifying
motor vehicle owners and operators who misrepresent their place of resi-
dence or where their vehicle is garaged and operated.
  (b)  The task force shall consist of 13 members. The superintendent of
financial services and the commissioner  of  motor  vehicles,  or  their
designees, shall be members of the task force and shall be the co-chairs
of the task force. A representative of the New York Automobile Insurance
Plan  shall  be a member of the task force. The remaining ten members of
the task force shall be appointed as follows: four shall be appointed by
the governor, two shall be appointed by the temporary president  of  the
senate, two shall be appointed by the speaker of the assembly, one shall
be  appointed  by  the  minority  leader of the senate, and one shall be
appointed by the minority leader of the assembly. Of such  ten  members:
three  shall be representatives of insurers actively writing motor vehi-
cle insurance in this state,  three  shall  be  representatives  of  the
insurance  agent  and  broker  community  actively selling motor vehicle
insurance in this state, two shall be representatives of  companies  the
business of which involves collecting, dispersing and synthesizing data,
and  two  shall be representatives of the motor vehicle insurance buying
public.

S. 988--A                          10

  (c) The task force shall submit a  report  to  the  governor  and  the
legislature  of  its  findings,  conclusions  and recommendations within
fifteen months of the effective date of this section.
  S  23.  This  act shall take effect on the sixtieth day after it shall
have become a law, provided that section twenty-two of  this  act  shall
expire  and  be deemed repealed eighteen months after the effective date
of this act.

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Senate Bill S988

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

Bill Amendments

co-Sponsors

2011-S988 - Details

2011-S988 - Summary

2011-S988 - Sponsor Memo

2011-S988 - Bill Text download pdf

co-Sponsors

2011-S988A (ACTIVE) - Details

2011-S988A (ACTIVE) - Summary

2011-S988A (ACTIVE) - Sponsor Memo

2011-S988A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S988

Share this bill

Sponsored By

Jeffrey D. Klein

Archive: Last Bill Status - In Senate Committee Insurance Committee

Bill Amendments

co-Sponsors

David Carlucci

Diane J. Savino

David J. Valesky

2011-S988 - Details

2011-S988 - Summary

2011-S988 - Sponsor Memo

2011-S988 - Bill Text download pdf

co-Sponsors

David Carlucci

Diane J. Savino

David J. Valesky

2011-S988A (ACTIVE) - Details

2011-S988A (ACTIVE) - Summary

2011-S988A (ACTIVE) - Sponsor Memo

2011-S988A (ACTIVE) - Bill Text download pdf

Comments