By Hinman Straub, Special to NEAFA
As of the drafting of this article, the New York State Budget is twenty-four days late. It is currently anticipated that it could be several more weeks before there is a resolution.
The issues inhibiting progress are primarily related to policy issues, not financial ones. One of the most prominent issues of contention is the Governor’s proposals to reform New York’s auto insurance industry.
As a part of her broader “Affordability Agenda,” Governor Hochul is proposing a series of reforms targeted at combating fraud and bad actors, with the aim to lower insurance costs while still protecting legitimate victims. The proposals include the following provisions.
Proposals to amend New York’s No-Fault Insurance Law and the Civil Procedure Law and Rules to:
· Modify the definition of “serious injury” to eliminate often manipulated criteria;
· Limit the amount of non-economic damages from being awarded to uninsured motorists, individuals convicted of driving while impaired, and individuals committing a felony or fleeing one at the time of the accident;
· Adopt a common-sense rule that permits recovery of non-economic damages only if a plaintiff is not primarily at fault for causing an accident; and
· Ensure that defendants in multi-party personal injury auto cases are held responsible only for the damage they cause, not damages caused by other unrelated defendants.
· Impose Market-Based Interest Rate on Court Judgments.
In addition, there is also a proposal to require that interest on judgments and accrued claims be calculated using the one-year U.S. Treasury bill rate defined as “the weekly average one-year constant maturity treasury yield, as published in the Federal Reserve System, for the calendar week preceding the date of the entry of the judgment awarding damages.” The proposal would create an exemption when the tax law provides for an annual rate of interest to be paid on a judgment or an accrued claim.
Skyrocketing insurance cost have been a focus of the NEAFA legislative agenda for the past two years. Increased litigation, combined with skyrocketing settlements and jury awards are impacting all insured, regardless of their own claim history. Reforms that control cost and reduce fraud would benefit all insured individuals, including NEAFA members.
Strong opposition to these proposals has been offered, primarily by the trial lawyers. These and other policy issues are under ongoing negotiations among legislative leaders.