Assembly Bill A10224

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10224
 
                           I N  A S S E M B L Y
 
                             February 12, 2026
                                ___________
 
 Introduced by M. of A. WEPRIN -- read once and referred to the Committee
   on Codes
 
 AN  ACT  to  amend  the  penal law and the insurance law, in relation to
   establishing enhanced  criminal  penalties  for  fraudulent  insurance
   claims on construction sites and in motor vehicle accidents
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short Title. This act shall be known and may  be  cited  as
 the  "fraudulent  claims reduction and unlawful deception act" or "FRAUD
 Act".
   § 2. Legislative findings and intent. The legislature finds that frau-
 dulent insurance claims, including staged  construction  site  accidents
 and   staged  motor  vehicle  collisions,  contribute  significantly  to
 increased insurance  premiums  in  New  York  state.  Fraudulent  claims
 inflate  costs  for  insurers  and  policyholders, burden taxpayers, and
 undermine the affordability of housing, infrastructure development,  and
 transportation  projects.  The  state's  current liability and insurance
 frameworks, including outdated doctrines that create perverse incentives
 for litigation rather than safety and  accountability,  have  led  to  a
 proliferation  of  staged  accident  claims  and opportunistic lawsuits,
 which in turn raise construction and auto insurance costs  for  all  New
 Yorkers.    This  mirrors  concerns  expressed about liability standards
 driving fraudulent suits and higher premiums. High insurance  costs  for
 construction  and  automobile coverage contribute to the overall cost of
 housing, public works, and  commuter  mobility,  making  New  York  less
 affordable compared to other states. The purpose of this act is to deter
 and  punish  the  intentional staging or fabrication of insurance claims
 related to construction site accidents and motor vehicle collisions,  by
 establishing  clear  criminal  penalties,  restitution requirements, and
 enforcement mechanisms. In doing so, this act seeks to reduce fraudulent
 activity that drives up insurance costs, thereby making insurance cover-
 age more affordable, promoting the efficient use of public  and  private
 funds,  and  restoring  fairness  in  liability  and insurance practices
 across the state.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD14752-01-6
 A. 10224                            2
 
   § 3. Subdivision 3 of section 176.00 of the penal  law,  as  added  by
 chapter 720 of the laws of 1981, is amended and four new subdivisions 6,
 7, 8 and 9 are added to read as follows:
   3.  "Person"  includes  any individual, firm, association [or], corpo-
 ration, A PURPORTED INJURED WORKER, ATTORNEY, PHYSICIAN, MEDICAL PROFES-
 SIONAL, OR ANY OTHER INDIVIDUAL WHO KNOWINGLY PARTICIPATES  IN,  FACILI-
 TATES, OR FURTHERS CONDUCT PROHIBITED BY THIS ARTICLE.
   6.  "FRAUDULENT INSURANCE CLAIM" MEANS A CLAIM SUBMITTED TO AN INSURER
 THAT IS INTENTIONALLY FALSE, MISLEADING, FABRICATED, OR  MADE  WITH  THE
 INTENT TO OBTAIN BENEFITS NOT LEGALLY DUE.
   7.  "CONSTRUCTION SITE" HAS THE SAME MEANING AS "WORKPLACE" AND "WORK-
 SITE" AS DEFINED IN SECTION TWO HUNDRED OF THE LABOR  LAW,  THE  MEANING
 APPLIES WHERE SUCH CONSTRUCTION WORK IS BEING DONE AS DEFINED IN SECTION
 TWO  HUNDRED  FORTY  OF  THE  LABOR  LAW AND INCLUDES ANY LOCATION WHERE
 BUILDING, REPAIR, DEMOLITION, OR RELATED CONSTRUCTION ACTIVITY IS OCCUR-
 RING.
   8."MOTOR VEHICLE ACCIDENT CLAIM" MEANS ANY CLAIM  SUBMITTED  UNDER  AN
 AUTOMOBILE  INSURANCE  POLICY ARISING OUT OF A COLLISION, CRASH, IMPACT,
 OR RELATED EVENT INVOLVING ONE OR MORE VEHICLES.
   9. "FRAUDULENT INSURANCE ACT" INCLUDES ANY ACT THAT  WOULD  CONSTITUTE
 INSURANCE FRAUD UNDER SECTION FOUR HUNDRED THREE OF THE INSURANCE LAW.
   §  4.  The penal law is amended by adding a new section 176.90 to read
 as follows:
 § 176.90 STAGING A CONSTRUCTION SITE ACCIDENT FOR INSURANCE FRAUD.
   A PERSON IS GUILTY OF STAGING A CONSTRUCTION SITE ACCIDENT FOR  INSUR-
 ANCE  FRAUD, REGARDLESS OF WHETHER SUCH PERSON PURPORTS TO BE AN INJURED
 WORKER, WHEN, WITH THE INTENT TO COMMIT OR FURTHER A  FRAUDULENT  INSUR-
 ANCE  ACT  AS DEFINED IN SUBDIVISION SIX OF SECTION 176.00 OF THIS ARTI-
 CLE, SUCH PERSON ENTERS A CONSTRUCTION SITE  AND  INTENTIONALLY  STAGES,
 CAUSES,  FABRICATES, OR SIMULATES AN ACCIDENT FOR THE PURPOSE OF FILING,
 OR ASSISTING IN THE FILING OF, AN INSURANCE CLAIM,  OR  DIRECTS,  HIRES,
 REQUESTS,  ENCOURAGES, ORCHESTRATES, OR INVITES ANOTHER INDIVIDUAL TO DO
 THE SAME.
   STAGING A CONSTRUCTION SITE ACCIDENT FOR INSURANCE FRAUD IS A CLASS  E
 FELONY.
   §  5.  The penal law is amended by adding a new section 176.95 to read
 as follows:
 § 176.95 AUTO INSURANCE FRAUD INVOLVING STAGED COLLISIONS AND FABRICATED
            CLAIMS.
   A PERSON IS GUILTY OF AUTO INSURANCE FRAUD WHEN, WITH  THE  INTENT  TO
 OBTAIN ECONOMIC BENEFIT, SUCH PERSON:
   1.  INTENTIONALLY  CAUSES,  STAGES,  FABRICATES,  OR SIMULATES A MOTOR
 VEHICLE COLLISION OR ACCIDENT; OR
   2. KNOWINGLY SUBMITS, ASSISTS WITH, OR CONSPIRES TO SUBMIT ANY  FALSE,
 FICTITIOUS,  OR  FRAUDULENT CLAIM FOR PAYMENT OF A LOSS UNDER AN AUTOMO-
 BILE INSURANCE POLICY, INCLUDING BUT NOT LIMITED TO  MEDICAL  TREATMENT,
 REPAIR COSTS, OR WAGE LOSS BENEFITS.
   AUTO INSURANCE FRAUD INVOLVING STAGED COLLISIONS AND FABRICATED CLAIMS
 IS  A  CLASS  E  FELONY,  AND,  WHERE  THE  VALUE  OF LOSSES OBTAINED OR
 ATTEMPTED EXCEEDS $1,500, INCREASED PENALTIES SHALL APPLY.
   § 6. The insurance law is amended by adding a new section 412 to  read
 as follow:
   §  412.  ENHANCED  PENALTIES AND ENFORCEMENT FOR CONSTRUCTION SITE AND
 AUTO CLAIMS FRAUD. (A) NOTWITHSTANDING ANY PROVISION OF LAW, ANY  PERSON
 CONVICTED UNDER SECTION 176.90 OR 176.95 OF THE PENAL LAW FOR FRAUDULENT
 INSURANCE ACTIVITY SHALL BE SUBJECT TO:
 A. 10224                            3
 
   (1)  RESTITUTION  TO  THE  INSURER FOR AMOUNTS PAID AS A RESULT OF THE
 FRAUDULENT CLAIM;
   (2) CIVIL PENALTIES UP TO FIVE THOUSAND DOLLARS PLUS THE AMOUNT OF THE
 FRAUDULENT CLAIM; AND
   (3) EXCLUSION FROM RECEIVING BENEFITS UNDER ANY STATE-REGULATED INSUR-
 ANCE POLICY FOR A PERIOD OF UP TO TWO YEARS AFTER CONVICTION.
   (B)  THE SUPERINTENDENT SHALL PROMULGATE RULES AND REGULATIONS REQUIR-
 ING INSURERS TO:
   (1) PROVIDE TIMELY NOTICE TO LAW ENFORCEMENT OF  SUSPECTED  FRAUDULENT
 CLAIMS;
   (2) COOPERATE IN FRAUD INVESTIGATIONS AND PROSECUTIONS; AND
   (3) REPORT AGGREGATE FRAUD DATA ANNUALLY TO THE LEGISLATURE.
   §  7.  Enforcement and implementation. 1. The superintendent of finan-
 cial services, in consultation with the  division  of  criminal  justice
 services,  shall promulgate regulations to implement this act within 180
 days of the effective date of this act.
   2. The division of insurance fraud units in this state  shall  receive
 additional  resources  to investigate and prosecute violations described
 herein.
   § 8. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.