Senate Bill S9135

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9135
 
                             I N  S E N A T E
 
                             February 5, 2026
                                ___________
 
 Introduced  by  Sen.  COONEY -- read twice and ordered printed, and when
   printed to be committed 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 frameworks, including outdated doctrines that create perverse incentives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
 S. 9135                             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:
 S. 9135                             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.