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A05803 Summary:

BILL NOA05803
 
SAME ASNo Same As
 
SPONSORBarclay (MS)
 
COSPNSRBlankenbush, Giglio, Kolb, Montesano, Manktelow, Byrnes, DeStefano
 
MLTSPNSRCrouch, DiPietro, Finch, Goodell, McDonough, Palmesano, Salka, Thiele
 
Add 5110 & 405-a, amd 5102, 5103, 5108, 5106, 5303, Ins L; amd 176.00, 176.05, 176.15, 176.20, 176.25, 176.30 & 176.35, add 176.36, 176.37 & 176.66, Pen L; amd 846-m, Exec L
 
Enacts the New York automobile insurance fraud and premium reduction act; provides that this act is aimed at reducing insurance fraud and thus lowering the cost of insurance premiums; provides a provision for compensation to a person that reports insurance fraud to the authorities; further provides that this act also increases the penalty for insurance fraud; appropriates $3,100,000 therefor.
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A05803 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5803
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 19, 2019
                                       ___________
 
        Introduced  by  M.  of A. BARCLAY, BLANKENBUSH, GIGLIO, KOLB, MONTESANO,
          MANKTELOW, BYRNES, DeSTEFANO -- Multi-Sponsored by -- M. of A. CROUCH,
          DiPIETRO, FINCH, GOODELL, McDONOUGH, PALMESANO, SALKA, THIELE --  read
          once and referred to the Committee on Insurance
 
        AN  ACT to amend the insurance law, the penal law and the executive law,
          in relation to establishing the New York  automobile  insurance  fraud
          and premium reduction act; and making an appropriation therefor
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. This act shall be known and may be cited as the  "New  York
     2  automobile insurance fraud and premium reduction act".
     3    § 2. The insurance law is amended by adding a new section 5110 to read
     4  as follows:
     5    §  5110. Certification of managed care organizations. (a)(1) Any indi-
     6  vidual or group authorized to  provide  medical  or  other  health  care
     7  services  in  this state may, directly or through an authorized insurer,
     8  make written application to the superintendent to  become  certified  to
     9  provide managed care to injured covered persons under this article.
    10    (2)  Certification shall be valid for such period and for such service
    11  areas as  the  superintendent  may  prescribe,  unless  sooner  revoked,
    12  suspended or amended.
    13    (3)  Each  application  for  certification  shall  be accompanied by a
    14  reasonable fee prescribed by the superintendent and a  proposed  managed
    15  care program detailing its significant features, methods and procedures.
    16    (b)  Application  for  certification  shall  be  made in such form and
    17  manner, and shall set forth such information regarding the proposed plan
    18  of managed care for providing medical and other health care services, as
    19  the superintendent may prescribe, including:
    20    (1) the names and credentials of all individuals or organizations that
    21  will provide services under the  managed  care  program,  together  with
    22  appropriate  evidence  of compliance with any licensing or certification
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02472-01-9

        A. 5803                             2
 
     1  requirements for such individuals or organizations to practice  in  this
     2  state;
     3    (2)  a  description  of  the  times,  places  and  manner of providing
     4  services under the managed care program;
     5    (3) a description of the times, places and manner of  providing  other
     6  related optional services the applicant may wish to provide; and
     7    (4)  a  description  and representative copies of all remuneration and
     8  related arrangements between the managed care organization and  individ-
     9  ual providers of services under the managed care program.
    10    (c)  The superintendent shall certify an applicant, if the superinten-
    11  dent finds that the managed care program:
    12    (1) provides medical and other health care services that meet quality,
    13  continuity and other treatment standards prescribed by  the  superinten-
    14  dent  or  the commissioner of health, in a manner that is timely, effec-
    15  tive and convenient for injured persons;
    16    (2) includes a sufficient number of each category of provider through-
    17  out the proposed service areas to give injured persons  adequate  flexi-
    18  bility  to  choose  an  authorized provider from among those health care
    19  providers who participate in the managed care program;
    20    (3) provides appropriate financial incentives or other  approaches  to
    21  reduce costs and minimize improper utilization without sacrificing qual-
    22  ity of service;
    23    (4)  provides adequate methods of peer review, utilization review, and
    24  dispute resolution, including where applicable, access to  the  external
    25  appeal  process  as  provided  in article forty-nine of this chapter, in
    26  order to: (A) prevent inappropriate or excessive  treatment;  (B)  avoid
    27  conflicts    of  interest; (C) exclude from participation in the program
    28  those providers who violate  reasonable  treatment  standards;  and  (D)
    29  provide for the resolution of medical disputes;
    30    (5)  provides  a timely and accurate method of reporting to the super-
    31  intendent or the commissioner of health as appropriate, necessary infor-
    32  mation regarding medical and health care service cost and utilization to
    33  monitor the effectiveness of the managed care program;
    34    (6) provides a mechanism for an injured  person  to  obtain  treatment
    35  outside of the managed care program if the services are not available or
    36  accessible within the program;
    37    (7) provides for a reasonable and appropriate coordination with anoth-
    38  er  health  care  provider  where  the injured person has been receiving
    39  treatment from another health care provider for  a  previously  existing
    40  condition or injury which has been aggravated by the motor vehicle acci-
    41  dent;
    42    (8)  provides  for  a  mechanism for notification about and transition
    43  from emergency care; and
    44    (9) complies with any other requirement the superintendent  determines
    45  is  necessary  to provide quality medical and other health care services
    46  to injured persons.
    47    (d) The superintendent may certify a health  maintenance  organization
    48  issued a certificate of authority under article forty-four of the public
    49  health  law or licensed under article forty-three of this chapter, if it
    50  meets the requirements of this  section.  The  superintendent  may  also
    51  certify  an  accident and health insurer, including a corporation organ-
    52  ized under article forty-three of this chapter, which has a  participat-
    53  ing or preferred network of providers if such insurer meets the require-
    54  ments  of  this  section.  To the extent a managed care organization has
    55  been reviewed, approved or certified  by  another  state  agency  as  to
    56  accessibility,  quality  or  continuity  of care or for any of the other

        A. 5803                             3
 
     1  matters within the superintendent's  review,  the  superintendent  shall
     2  consider  the  review, approval or certification of another state agency
     3  so as not to  duplicate  those  reviews,  approvals  or  certifications.
     4  However,  nothing in this subsection shall be deemed to limit the super-
     5  intendent's authority to impose and review  additional  requirements  or
     6  standards  above and beyond those imposed by another state agency to the
     7  extent those requirements or standards are necessary or appropriate  for
     8  implementation of this section.
     9    (e)  The  superintendent  shall  refuse  to certify, or may revoke, or
    10  suspend or amend the certification of, any managed care organization, if
    11  the superintendent finds that:
    12    (1) the managed care program for providing services fails to meet  the
    13  requirements of this section; or
    14    (2)  service  under  the managed care program is not being provided in
    15  accordance with its terms as described in the  application  for  certif-
    16  ication.
    17    (f)  For  purposes  of  this  section, the superintendent may consider
    18  whether providers utilized by a managed care organization  or  otherwise
    19  authorized  to  provide  services  under  the contract are authorized to
    20  render medical care in accordance with section thirteen-b of  the  work-
    21  ers' compensation law.
    22    (g)  Utilization  review, quality assurance and peer review activities
    23  pursuant to this section shall be subject to review by  the  superinten-
    24  dent  and  the  commissioner  of health. Findings by the commissioner of
    25  health of professional misconduct, or disciplinary actions  in  relation
    26  thereto,  shall  be reported to the appropriate licensing boards and the
    27  superintendent.
    28    (h) Data generated by or received in connection with these activities,
    29  including written reports, notes or records of any such activities or of
    30  the review thereof, shall be confidential and shall  not  be  disclosed,
    31  except to the extent determined to be necessary by the superintendent or
    32  the  commissioner  of  health.  No data generated by utilization review,
    33  quality assurance or peer review activities pursuant to this section, or
    34  the review thereof, shall be used in any  action,  suit  or  proceeding,
    35  except to the extent determined to be necessary by the superintendent or
    36  the commissioner.
    37    (i)  A  person participating in utilization review, quality assurance,
    38  or peer review activities pursuant to this section shall not be examined
    39  as to any communication made in the course of  such  activities  or  the
    40  findings thereof, nor shall any such person be subject to a civil action
    41  for actions taken or statements made in good faith.
    42    (j) Provided that there is compliance with standards governing managed
    43  care  established  by  the superintendent, no person who participates in
    44  forming any network, collectively negotiating fees, or otherwise  solic-
    45  its  or enters into contracts in a good faith effort, to provide medical
    46  or other health care services on a managed care basis in accordance with
    47  the provisions of this section, shall be subject to antitrust  liability
    48  regarding such participation.
    49    (k) The provisions of this section shall not affect the confidentiali-
    50  ty or admission in evidence of a claimant's medical treatment records.
    51    (l)  The  superintendent,  in  consultation  with  the commissioner of
    52  health, shall adopt such rules as may be  necessary  to  carry  out  the
    53  provisions of this section.
    54    §  3.  Paragraph  1 of subsection (a) of section 5102 of the insurance
    55  law, as amended by chapter 298 of the laws of 2006, is amended  to  read
    56  as follows:

        A. 5803                             4
 
     1    (1)  All  necessary  expenses  incurred  for:  (i)  medical,  hospital
     2  (including services rendered in compliance with article forty-one of the
     3  public health law, whether or not such services are rendered directly by
     4  a hospital), surgical, nursing, dental, ambulance,  x-ray,  prescription
     5  drug   and  prosthetic  services;  (ii)  psychiatric,  physical  therapy
     6  (provided that treatment is rendered pursuant to a referral) and occupa-
     7  tional therapy and rehabilitation; (iii) any non-medical  remedial  care
     8  and  treatment rendered in accordance with a religious method of healing
     9  recognized by the laws of this state; and (iv)  any  other  professional
    10  health services; all without limitation as to time, provided that within
    11  one  year after the date of the accident causing the injury it is ascer-
    12  tainable that further expenses may be incurred as a result of the  inju-
    13  ry.  For  the  purpose  of determining basic economic loss, the expenses
    14  incurred under this paragraph shall be in accordance  with  the  limita-
    15  tions  of  section  five  thousand  one  hundred  eight of this article.
    16  Medical treatments, diagnostic tests and services provided by the policy
    17  shall be rendered in accordance with  commonly  accepted  protocols  and
    18  professional  standards  and  practices  which  are commonly accepted as
    19  being beneficial for the treatment of the covered injury.  Protocols and
    20  professional standards and practices which are  deemed  to  be  commonly
    21  accepted  pursuant to this section shall be those recognized by national
    22  standard setting organizations, national or state professional organiza-
    23  tions of the same discipline as the treating provider  or  those  desig-
    24  nated  or  approved  by  the superintendent in consultation with profes-
    25  sional licensing boards in the department of health and  the  department
    26  of education. The superintendent, in consultation with the commissioners
    27  of  health and education, may reject the use of protocols, standards and
    28  practices or lists of diagnostic tests set by  any  organization  deemed
    29  not to have standing or general recognition by the provider community or
    30  applicable  licensing  boards.    Protocols shall be deemed to establish
    31  guidelines as to standard appropriate treatment and diagnostic tests for
    32  injuries sustained in automobile accidents,  but  the  establishment  of
    33  standard  treatment  protocols  or  protocols  for the administration of
    34  diagnostic tests shall not  be  interpreted  in  such  a  manner  as  to
    35  preclude  variance  when  warranted  by reason of medical necessity. The
    36  policy form may provide for  pre-certification  of  certain  procedures,
    37  treatments,  diagnostic  tests  or other services or for the purchase of
    38  durable medical goods or equipment,  except  that  no  pre-certification
    39  requirement  shall  apply within ten days of the accident giving rise to
    40  the injury.
    41    § 4. Subsection (d) of section 5103 of the insurance law is amended to
    42  read as follows:
    43    (d) Insurance policy forms for insurance to satisfy  the  requirements
    44  of  subsection (a) [hereof] of this section shall be subject to approval
    45  pursuant to article twenty-three of this chapter. Minimum benefit stand-
    46  ards for such policies and for self-insurers, and rights of subrogation,
    47  examination and other such matters, shall be established  by  regulation
    48  pursuant  to section three hundred one of this chapter, provided, howev-
    49  er, that effective  immediately  such  regulation  shall  be  deemed  to
    50  include  new  provisions  applicable to injuries which occur on or after
    51  the effective date of the chapter of the laws of two  thousand  nineteen
    52  that  amended  this  subsection  and established the New York automobile
    53  insurance fraud and  premium  reduction  act.    Such  regulation  shall
    54  provide  that the initial filing of a notice of the existence of a claim
    55  or claims for first party benefits by a covered  person  shall  be  made
    56  within  thirty  days  of  sustaining  an  injury for which such claim or

        A. 5803                             5
 
     1  claims may be made, but which permit the filing of such  initial  notice
     2  of  the existence of a claim or claims as soon as reasonably practicable
     3  after the expiration of such thirty day period where the nature  of  the
     4  injury  results  in a reasonably justifiable delay in filing the initial
     5  notice during such thirty day period.
     6    § 5. Section 5108 of the insurance law is  amended  by  adding  a  new
     7  subsection (d) to read as follows:
     8    (d)  Proof  of  the  fact  and  cost of a medical or health service or
     9  treatment which is needed for a covered person  to  receive  payment  or
    10  reimbursement for that portion of a claim or claims attributable to such
    11  service  or  treatment, whether such proof is submitted to a first party
    12  or additional first party benefits insurer  by  the  covered  person  or
    13  directly by a medical professional or health services provider on behalf
    14  of  such covered person, for a service rendered by the medical or health
    15  services provider to  the  covered  person  shall  be  submitted  within
    16  forty-five  days  from  the date the service was rendered to the covered
    17  person. At the option of the insurer, in  any  case  where  multiple  or
    18  continuing  medical  or health treatments or services are required, such
    19  time limit may be waived and the claims of one or more such  medical  or
    20  health service providers may be bundled.
    21    §  6.  Section 5106 of the insurance law, subsection (b) as amended by
    22  chapter 452 of the laws of 2005 and subsection (d) as amended by section
    23  8 of part AAA of chapter 59 of the laws of 2017, is amended to  read  as
    24  follows:
    25    §  5106.  Fair claims settlement. (a) Payments of first party benefits
    26  and additional first party  benefits  shall  be  made  as  the  loss  is
    27  incurred.  Such  benefits are overdue if not paid within [thirty] forty-
    28  five days after the claimant supplies proof of the fact  and  amount  of
    29  loss  sustained.  If  proof  is not supplied as to the entire claim, the
    30  amount which is supported by proof is overdue if not paid within  [thir-
    31  ty]  forty-five  days after such proof is supplied. All overdue payments
    32  shall bear interest at the rate of two percent per  month.  If  a  valid
    33  claim  or  portion  was  overdue, the claimant shall also be entitled to
    34  recover  his  attorney's  reasonable  fee,  for   services   necessarily
    35  performed  in  connection  with  securing  payment of the overdue claim,
    36  subject to limitations promulgated by the superintendent in regulations.
    37  The failure to issue a denial of a claim within the forty-five day peri-
    38  od provided for in this subsection shall not preclude the  insurer  from
    39  raising  a  defense  to the claim where the insurer has made a report to
    40  the insurance frauds bureau pursuant to section  four  hundred  five  of
    41  this  chapter.  An  insurer will also not be precluded from establishing
    42  that the claimant has failed to meet its prima facie burden of proof.
    43    (b) Every insurer shall [provide] notify a claimant [with  the  option
    44  of submitting] that any dispute involving the insurer's liability to pay
    45  first  party  benefits,  or  additional first party benefits, the amount
    46  thereof or any other matter which may arise pursuant to  subsection  (a)
    47  of  this section [to] must be settled by arbitration pursuant to simpli-
    48  fied procedures to be promulgated or  approved  by  the  superintendent.
    49  Such  simplified procedures shall include an expedited eligibility hear-
    50  ing option, when required, to designate  the  insurer  for  first  party
    51  benefits  pursuant  to  subsection  (d)  of  this section. The expedited
    52  eligibility hearing option shall be a  forum  for  eligibility  disputes
    53  only,  and  shall  not  include  the  submission of any particular bill,
    54  payment or claim for any specific benefit for adjudication, nor shall it
    55  consider any other defense to payment.

        A. 5803                             6
 
     1    (c) An award by an arbitrator shall be binding except where vacated or
     2  modified by a master arbitrator in accordance with simplified procedures
     3  to be promulgated or approved by the  superintendent.  The  grounds  for
     4  vacating or modifying an arbitrator's award by a master arbitrator shall
     5  not  be  limited to those grounds for review set forth in article seven-
     6  ty-five of the civil practice law and rules. The award of a master arbi-
     7  trator shall be binding except for the grounds for review set  forth  in
     8  article  seventy-five of the civil practice law and rules[, and provided
     9  further that where the amount of such master arbitrator's award is  five
    10  thousand  dollars or greater, exclusive of interest and attorney's fees,
    11  the insurer or the claimant may institute a court action  to  adjudicate
    12  the dispute de novo].
    13    (d)  (1) Except as provided in paragraph two of this subsection, where
    14  there is reasonable belief more than one insurer would be the source  of
    15  first  party benefits, the insurers may agree among themselves, if there
    16  is a valid basis therefor, that one of them  will  accept  and  pay  the
    17  claim  initially.  If there is no such agreement, then the first insurer
    18  to whom notice of claim is given shall be responsible for  payment.  Any
    19  such dispute shall be resolved in accordance with the arbitration proce-
    20  dures  established pursuant to section five thousand one hundred five of
    21  this article and regulations as promulgated by the  superintendent,  and
    22  any  insurer  paying  first-party  benefits shall be reimbursed by other
    23  insurers for their proportionate share of the costs of the claim and the
    24  allocated expenses of processing  the  claim,  in  accordance  with  the
    25  provisions  entitled  "other  coverage"  contained in regulation and the
    26  provisions entitled "other sources of first-party benefits" contained in
    27  regulation. If there is no such insurer and the motor  vehicle  accident
    28  occurs  in  this  state,  then an applicant who is a qualified person as
    29  defined in article fifty-two of this chapter shall institute  the  claim
    30  against the motor vehicle accident indemnification corporation.
    31    (2)  A  group  policy  issued  pursuant to section three thousand four
    32  hundred fifty-five of this chapter shall provide  first  party  benefits
    33  when  a  dispute  exists as to whether a driver was using or operating a
    34  motor vehicle in connection with a transportation network  company  when
    35  loss,  damage, injury, or death occurs. A transportation network company
    36  shall notify the insurer that issued the  owner's  policy  of  liability
    37  insurance of the dispute within ten business days of becoming aware that
    38  the  dispute  exists.  When there is a dispute, the group insurer liable
    39  for the payment of first party benefits under a group policy shall  have
    40  the  right  to  recover the amount paid from the driver's insurer to the
    41  extent that the driver would have been  liable  to  pay  damages  in  an
    42  action at law.
    43    §  7.   Subsection (c) of section 5303 of the insurance law is amended
    44  to read as follows:
    45    (c) Such plan shall provide  for  the  method  of  classifying  risks,
    46  establishing  territories  and  making  rates  applicable  thereto. Such
    47  rates[, except with respect to rates for the minimum limits of insurance
    48  required by article six or seven of the vehicle and traffic law,]  shall
    49  be  based upon loss and expense experience of the risks insured pursuant
    50  to the plan.
    51    § 8. The insurance law is amended by adding a  new  section  405-a  to
    52  read as follows:
    53    §  405-a.   Compensation for report of insurance fraud to law enforce-
    54  ment authorities. (a)  Any  person,  other  than  persons  described  in
    55  subsection  (a)  of  section  four hundred five of this article, who has
    56  reason to believe that a fraudulent insurance act prohibited pursuant to

        A. 5803                             7
 
     1  article one hundred seventy-six of the penal law has been  committed  or
     2  that an insurance transaction may be fraudulent, or has knowledge that a
     3  fraudulent  insurance  transaction  is about to take place, or has taken
     4  place  may report such act or transaction and any additional information
     5  relative to the factual circumstances of the transaction and the parties
     6  involved to the attorney general, district attorney or insurance  frauds
     7  bureau.
     8    (b)  If the insurance frauds bureau recommends to the attorney general
     9  or district attorney to commence an action or if the attorney general or
    10  district attorney commences an action based on information provided by a
    11  person pursuant to subsection (a) of  this  section,  then  such  person
    12  shall  be  entitled to receive an award of at least fifteen percent, but
    13  not more than twenty-five percent of  the  proceeds  of  the  action  or
    14  settlement of the claim up to a maximum of twenty-five thousand dollars.
    15  The  attorney  general or district attorney shall recommend to the court
    16  when a settlement is entered the amount of such award. The  court  shall
    17  base such award decision on the extent to which the person substantially
    18  contributed to the prosecution of the action.
    19    §  9.  Section  176.00 of the penal law is amended by adding three new
    20  subdivisions 6, 7 and 8 to read as follows:
    21    6. "Provider" means an attorney, a health care professional, an  owner
    22  or  operator  of  a  health  care  practice  or facility, any person who
    23  creates the impression that he or  she,  or  his  or  her  practice  can
    24  provide  legal or health care services, or any person employed or acting
    25  on behalf of any such person.
    26    7. "Public media" means telephone directories,  professional  directo-
    27  ries,  newspapers  and  other  periodicals,  radio and television, bill-
    28  boards, and mailed or electronically transmitted written  communications
    29  that  do  not  involve  in-person  contact  with  a specific prospective
    30  client, patient, or customer.
    31    8. "Runner" means a person who, for a pecuniary benefit,  procures  or
    32  attempts  to  procure a client, patient or customer at the direction of,
    33  request of or in cooperation with a provider when such person  knows  or
    34  has  reason  to  know  that  the  purpose of such provider is to seek to
    35  falsely or fraudulently: obtain benefits under a contract of  insurance;
    36  or assert a claim against an insured or an insurance carrier for provid-
    37  ing  services  to  the  client, patient or customer. Such term shall not
    38  include a person who procures or attempts to procure  clients,  patients
    39  or  customers for a provider through public media or a person who refers
    40  clients, patients or customers as authorized by law.   Nothing  in  this
    41  article  shall  be  deemed to prohibit an agent, broker or employee of a
    42  health maintenance organization from seeking to sell health  maintenance
    43  organization  coverage  or health insurance coverage to an individual or
    44  group.
    45    § 10. Subdivision 1 of section 176.05 of the penal law, as amended  by
    46  chapter 211 of the laws of 2011, is amended to read as follows:
    47    1.  any written statement as part of, or in support of, an application
    48  for the issuance of, or the rating of a policy insuring  against  losses
    49  or  liabilities  arising  out  of  the ownership, operation, or use of a
    50  motor vehicle, a commercial insurance policy, or certificate or evidence
    51  of self insurance for commercial insurance or commercial self insurance,
    52  or a claim for payment or other benefit pursuant to an insurance  policy
    53  or  self  insurance program for commercial or personal insurance that he
    54  or she knows to:
    55    (a) contain materially false information concerning any fact  material
    56  thereto; or

        A. 5803                             8
 
     1    (b) conceal, for the purpose of misleading, information concerning any
     2  fact material thereto; or
     3    §  11. The penal law is amended by adding a new section 176.66 to read
     4  as follows:
     5  § 176.66 Unlawful procurement of clients, patients or customers.
     6    A person is guilty of unlawful procurement  of  clients,  patients  or
     7  customers when, he or she knowingly:
     8    1. acts as a runner; or
     9    2.  uses, solicits, directs, hires or employs another person to act as
    10  a runner.
    11    Unlawful procurement of clients, patients or customers is  a  class  E
    12  felony.
    13    §  12.  Section  176.15 of the penal law, as amended by chapter 515 of
    14  the laws of 1986, is amended to read as follows:
    15  § 176.15 Insurance fraud in the fourth degree.
    16    A person is guilty of insurance fraud in the fourth degree when he  or
    17  she  commits  a  fraudulent  insurance act and thereby wrongfully takes,
    18  obtains or withholds, or attempts to wrongfully take, obtain or withhold
    19  property with a value in excess of [one thousand] five hundred dollars.
    20    Insurance fraud in the fourth degree is a class E felony.
    21    § 13. Section 176.20 of the penal law, as amended by  chapter  515  of
    22  the laws of 1986, is amended to read as follows:
    23  § 176.20 Insurance fraud in the third degree.
    24    A  person  is guilty of insurance fraud in the third degree when he or
    25  she commits a fraudulent insurance act  and  thereby  wrongfully  takes,
    26  obtains or withholds, or attempts to wrongfully take, obtain or withhold
    27  property  with  a  value  in excess of [three] one thousand five hundred
    28  dollars.
    29    Insurance fraud in the third degree is a class D felony.
    30    § 14. Section 176.25 of the penal law, as added by chapter 515 of  the
    31  laws of 1986, is amended to read as follows:
    32  § 176.25 Insurance fraud in the second degree.
    33    A  person is guilty of insurance fraud in the second degree when he or
    34  she commits a fraudulent insurance act  and  thereby  wrongfully  takes,
    35  obtains or withholds, or attempts to wrongfully take, obtain or withhold
    36  property with a value in excess of [fifty] twenty-five thousand dollars.
    37    Insurance fraud in the second degree is a class C felony.
    38    §  15. Section 176.30 of the penal law, as added by chapter 515 of the
    39  laws of 1986, is amended to read as follows:
    40  § 176.30 Insurance fraud in the first degree.
    41    A person is guilty of insurance fraud in the first degree when  he  or
    42  she  commits  a  fraudulent  insurance act and thereby wrongfully takes,
    43  obtains or withholds, or attempts to wrongfully take, obtain or withhold
    44  property with a value in excess of [one million] five  hundred  thousand
    45  dollars.
    46    Insurance fraud in the first degree is a class B felony.
    47    §  16. Section 176.35 of the penal law, as added by chapter 635 of the
    48  laws of 1996, is amended to read as follows:
    49  § 176.35 Aggravated insurance fraud in the third degree.
    50    A person is guilty of aggravated insurance fraud in the [fourth] third
    51  degree when he or she commits [a fraudulent insurance act]  the  offense
    52  of  insurance  fraud  in  the  fifth  degree,  and  has  been previously
    53  convicted within the preceding five years of any offense,  an  essential
    54  element of which is the commission of a fraudulent insurance act.
    55    Aggravated  insurance  fraud in the [fourth] third degree is a class D
    56  felony.

        A. 5803                             9
 
     1    § 17. The penal law is amended by adding two new sections  176.36  and
     2  176.37 to read as follows:
     3  § 176.36 Aggravated insurance fraud in the second degree.
     4    A  person is guilty of aggravated insurance fraud in the second degree
     5  when he or she commits the offense of  insurance  fraud  in  the  fourth
     6  degree,  and  has  been  previously  convicted within the preceding five
     7  years of any offense, an essential element of which is the commission of
     8  a fraudulent insurance act.
     9    Aggravated insurance fraud in the second degree is a class C felony.
    10  § 176.37 Aggravated insurance fraud in the first degree.
    11    A person is guilty of aggravated insurance fraud in the  first  degree
    12  when  he  or  she  commits  the  offense of insurance fraud in the third
    13  degree, and has been previously  convicted  within  the  preceding  five
    14  years of any offense, an essential element of which is the commission of
    15  a fraudulent insurance act.
    16    Aggravated insurance fraud in the first degree is a class B felony.
    17    § 18. Paragraph (a) of subdivision 2 of section 846-m of the executive
    18  law,  as  amended  by  section  6 of part T of chapter 57 of the laws of
    19  2000, is amended to read as follows:
    20    (a) The moneys received by the fund shall be expended in a manner that
    21  is consistent with the plan of  operation,  pursuant  to  appropriation,
    22  only  to reimburse costs incurred by provider agencies for pilot program
    23  activities relating to the detection, prevention or reduction  of  motor
    24  vehicle theft and motor vehicle insurance fraud, provided, however, that
    25  beginning January first, two thousand twenty, additional monies received
    26  by  the  fund pursuant to an appropriation made by a chapter of the laws
    27  of two thousand nineteen establishing the New York automobile  insurance
    28  fraud  and  premium  reduction  act shall be used exclusively to support
    29  efforts undertaken by district attorneys to detect, identify and  prose-
    30  cute fraud pertaining to article fifty-one of the insurance law.
    31    §  19.  No later than eighteen months after the effective date of this
    32  act, the superintendent of insurance shall study, evaluate and report to
    33  the governor and legislature on the impact and effect  of  this  act  on
    34  private  passenger  automobile  insurance costs, by rating territory, in
    35  New York state. The superintendent of insurance shall recommend for each
    36  insurer, by rating territory,  a  one-time  premium  reduction  for  the
    37  insurance  required  pursuant  to  article  51 of the insurance law that
    38  reflects the reduced cost of this type of coverage as a  result  of  the
    39  provisions  enacted pursuant to this act. Notwithstanding the provisions
    40  of article 23 of the insurance law, any such recommended reduction shall
    41  be binding unless demonstrated by an insurer, based on sound  underwrit-
    42  ing and actuarial principles reasonably related to actual or anticipated
    43  loss experience, that such reduction would result in underwriting losses
    44  for policies issued in such rating territory.
    45    §  20.    The  sum  of  three  million  one  hundred  thousand dollars
    46  ($3,100,000), or so much thereof as may be necessary, is  hereby  appro-
    47  priated  to  the  department  of transportation out of any moneys in the
    48  state treasury in the general fund to the credit of  the  motor  vehicle
    49  theft  and  insurance fraud prevention fund, not otherwise appropriated,
    50  and made immediately available, for the  purpose  of  carrying  out  the
    51  provisions  of  paragraph  (a)  of subdivision 2 of section 846-m of the
    52  executive law, as amended pursuant to  section  eighteen  of  this  act.
    53  Such moneys shall be payable on the audit and warrant of the comptroller
    54  on  vouchers certified or approved by the commissioner of transportation
    55  in the manner prescribed by law.

        A. 5803                            10
 
     1    § 21.  Severability clause. If any clause, sentence, paragraph, subdi-
     2  vision, section or part contained in any  part  of  this  act  shall  be
     3  adjudged  by  any  court  of  competent jurisdiction to be invalid, such
     4  judgment shall not affect, impair, or invalidate the remainder  thereof,
     5  but  shall  be  confined in its operation to the clause, sentence, para-
     6  graph, subdivision, section or part of this act contained  in  any  part
     7  thereof  directly  involved  in  the  controversy in which such judgment
     8  shall have been rendered. It is hereby declared to be the intent of  the
     9  legislature  that  this act would have been enacted even if such invalid
    10  provisions had not been included herein.
    11    § 22. This act shall take effect on the ninetieth day after  it  shall
    12  have become a law.
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