ISSUED: 1/18/2001
FOR IMMEDIATE RELEASE

2000 RECORD YEAR FIGHTING FRAUD, NUMBER OF ARRESTS AND CRIMINAL CONVICTIONS AT ALL TIME HIGH

Superintendent of Insurance Neil D. Levin today announced that the Departments year-end fraud fighting statistics show that arrests and criminal convictions reached an all time high. In 2000, arrests increased almost 30% and there was a 64% increase in criminal convictions.

"Staged accidents, bogus insurance claims, medical mills--its become big business to rip off insurance companies and New Yorks consumers are paying the price," said Levin. "The increases in arrests and criminal convictions during 2000 are evidence that Governor Patakis leadership in devoting new resources and the Departments aggressive work to weed out insurance fraud, are working across the State to protect New Yorks consumers from insurance fraud and higher rates."

In 1996, Governor George E. Pataki championed a program bill that increased penalties for workers compensation fraud and required the creation of special fraud investigation units be set up by all insurers. That same year, the crime of Aggravated Insurance Fraud was made a felony if a person has been convicted within the preceding five years of any fraudulent insurance act. In 1998, a Governors program bill amended the insurance law requiring HMOs to create special fraud investigation units, and the Children's Health Insurance Plan bill was passed adding a new section to the insurance law making it a crime to submit written or other physical evidence in support of a claim that is fraudulent. In 1998, the Department issued a directive requiring all insurers in the state to file a fraud prevention plan. In 1999, the Frauds Bureau approved plans for 420 insurers.

The New York State Insurance Department released their Annual Frauds Report to the Legislature this week. Highlights from the 2000 Annual Frauds Report include:

• Arrests increased to 503 from 390 arrests in 1999 and increased over 260% since 1995 when the Department had 140 arrests. Criminal convictions were up to 318 over 194 convictions in 1999, which represents an increase of over 300% from the 79 convictions in 1995.
• The Bureau met with prosecutors from each of New York States 62 counties and now prosecutors regularly seek out help from the Department in developing cases helping bring convictions to an all time high.
• The Bureau worked with the industry to launch four major public awareness advertising campaigns to educate the public to the prevalence and costs of insurance fraud.
• The efforts of the Frauds Bureau saved insurance companies over $2,850,000, an increase of over 40% over the savings from 1999.

"Our year-end results prove that our stepped up efforts with local police departments, prosecutors and insurance companies throughout the State are working to protect consumers from insurance fraud and higher rates. The Department will continue to focus on not just arrests, but criminal convictions. We have met with District Attorneys across the state and over 300 representatives from more than 100 insurance companies. We are committed to continuing this trend which sends out a strong, clear message, that insurance fraud will not be tolerated in New York State," added Levin.

A copy of the Insurance Frauds Bureaus report is available on the Departments Web site www.ins.state.ny.us or by calling 1-800-342-3736 to request a copy.