S5695-2011 Actions

• Jan 4, 2012: REFERRED TO INSURANCE
• Jan 4, 2012: returned to senate
• Jan 4, 2012: died in assembly
• Jun 17, 2011: referred to insurance
• Jun 17, 2011: DELIVERED TO ASSEMBLY
• Jun 17, 2011: PASSED SENATE
• Jun 16, 2011: ORDERED TO THIRD READING CAL.1350
• Jun 16, 2011: COMMITTEE DISCHARGED AND COMMITTED TO RULES
• Jun 10, 2011: REFERRED TO INSURANCE

S5695-2011 Meetings

S5695-2011 Calendars

S5695-2011 Votes

S5695-2011 Memo

BILL NUMBER:S5695

TITLE OF BILL:
An act
to amend the insurance law
and the vehicle and
traffic law, in relation to
insurance fraud

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: 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 3: 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 4: 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.

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 upstate 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 has revised and updated this report. The new Report
"Auto Insurance Rate Evasion" was released in February 2011. This
bill 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 bill 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.

LEGISLATIVE HISTORY: Similar to S. 4847 which passed
the Senate in 2011

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: The same date as the merger of the
Insurance and Banking Departments.

S5695-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         5695
 2011-2012 Regular Sessions
 I N  SENATE
 June 10, 2011
 
 Introduced by Sens. KLEIN, LARKIN -- read twice and ordered printed, and
 when printed to be committed to the Committee on Insurance
 AN  ACT  to  amend the insurance law and the vehicle and traffic law, in
 relation to insurance fraud
 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.
 

S  2.  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 3. 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:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD05004-05-1
 
       S. 5695                             2
 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
 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. 5695                             3
 

S  4.  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,
 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 5. This act shall take effect on the  same  date  and  in  the  same
 manner  as  part  A  of  chapter 62 of the laws of 2011 takes effect, as
 provided in subdivision (a) of section 114 of such part,  provided  that
 sections  two,  three and four of this act shall take effect on the same
 date and in the same manner as section 2 of part CC of chapter 58 of the
 laws of 2011 takes effect.

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