What's happening
This bill allows individuals who report insurance fraud to receive 40% of proceeds from successful legal actions based on their information.
Why it matters
Creates a strong financial incentive for private citizens to report insurance fraud. , potentially increasing the number of fraud cases identified and prosecuted, which may help reduce insurance costs and criminal activity over time.
Limits eligibility for rewards to individuals not already obligated to report fraud. (such as certain insurance professionals), focusing the incentive on new whistleblowers rather than those with a pre-existing duty.
Requires the court to consider the significance of the whistleblower’s contribution. to the case when determining the final award, aiming to reward only substantial, useful information rather than minor or irrelevant tips.
May lead to increased scrutiny of insurance transactions. and heightened legal activity, which could have compliance and privacy implications for both insurers and policyholders.
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Who cares
Headline styles
Reward Insurance Fraud Whistleblowers
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2551
2017-2018 Regular Sessions
IN ASSEMBLY
January 20, 2017
Introduced by M. of A. PRETLOW -- read once and referred to the Committee on Insurance
AN ACT to amend the insurance law, in relation to compensation for reports of insurance fraud to law enforcement authorities
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The insurance law is amended by adding a new section 405-a to read as follows:
§ 405-a. Compensation for report of insurance fraud to law enforcement authorities. (a) Any person, other than persons described in subsection (a) of section four hundred five of this article, who has reason to believe that a fraudulent insurance act prohibited pursuant to article one hundred seventy-six of the penal law has been committed or that an insurance transaction may be fraudulent, or has knowledge that a fraudulent insurance transaction is about to take place, or has taken place may report such act or transaction and any additional information relative to the factual circumstances of the transaction and the parties involved to the attorney general, district attorney or insurance frauds bureau.
(b) If the insurance frauds bureau recommends to the attorney general or district attorney to commence an action or if the attorney general or district attorney commences an action based on information provided by a person pursuant to subsection (a) of this section, then such person shall be entitled to receive an award of forty percent of the proceeds of the action. The attorney general or district attorney shall recommend to the court when a settlement is entered the amount of such award. The court shall base such award decision on the extent to which the person substantially contributed to the prosecution of the action.
§ 2. This act shall take effect immediately and shall apply to all reports of fraudulent insurance transactions made on and after such effective date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05278-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.