What's happening
This bill strengthens laws against motor vehicle insurance fraud and theft by expanding investigative authority, increasing penalties, and requiring more accurate residency documentation.
Why it matters
Expands investigative powers for insurance fraud. The bill gives the state insurance superintendent explicit authority to investigate people driving without insurance and those who misrepresent where their vehicles are mainly kept—targeting key fraud schemes that shift risks and costs unfairly.
Broadens and toughens criminal penalties. It raises the stakes for offenses like using false or forged insurance documents, making false statements on insurance or vehicle registration applications, and repeat motor vehicle theft-related crimes—potentially deterring both organized fraud and everyday violations.
Creates new tools for law enforcement. By granting police access to DMV street address records and requiring applicants to provide and attest to their true residential addresses, the bill aims to close common loopholes exploited by fraudsters, making enforcement and investigation more effective.
Addresses premium evasion and consumer cost impacts. By cracking down on “rate evasion” (where people claim a false address to get lower premiums), the bill seeks to protect honest policyholders from bearing higher costs due to others’ fraudulent behavior, promoting fairness in insurance pricing.
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Who cares
Headline styles
Stop Car Insurance Fraud
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to insurance
- Delivered to assembly
- Passed senateVote 60–0
- Ordered to third reading cal.2036
- Committee discharged and committed to rules
- Referred to insurance
- Returned to senate
- Died in assembly
- Referred to insurance
- Delivered to assembly
- Passed senateVote 60–0
- Ordered to third reading cal.1785
Show 2 earlier actions
- Committee discharged and committed to rules
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Fight Car Insurance Fraud
In Assembly Committee · Insurance · Sponsor David Weprin
Full text
5 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3665
2017-2018 Regular Sessions
IN SENATE
January 25, 2017
Introduced by Sens. KLEIN, AVELLA, CARLUCCI, SAVINO, SQUADRON, STAVISKY, VALESKY -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, the penal law, and the vehicle and traffic law, in relation to insurance fraud and combatting the theft of motor vehicles
The People of the State of New York, represented in Senate and Assembly, 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 authority pursuant to this chapter to investigate fraudulent activities with regard to individuals that operate motor vehicles with no insurance coverage, and motor vehicle insureds who misrepresent the principal place where insured motor vehicles are garaged and operated. Operating motor vehicles 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 liability risk and insurance premium costs.
§ 2. Subsection (a) of section 405 of the insurance law, as amended by section 7 of part A of chapter 62 of the laws of 2011, is amended to read as follows:
(a) Any person licensed or registered pursuant to the provisions of this chapter, and any person engaged in the business of insurance or life settlement in this state who is exempted from compliance with the licensing requirements of this chapter, including the state insurance fund of this state, who has reason to believe that an insurance trans-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09087-01-7
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action or life settlement act may be fraudulent, or has knowledge that a fraudulent insurance transaction or fraudulent life settlement act is about to take place, or has taken place shall, within thirty days after determination by such person that the transaction appears to be fraudulent, send to the superintendent on a form prescribed by the superintendent, the information requested by the form and such additional information relative to the factual circumstances of the transaction and the parties involved as the superintendent may require. The superintendent shall accept reports of suspected fraudulent insurance transactions or fraudulent life settlement acts from any self insurer, including but not limited to self insurers providing health insurance coverage, those providing motor vehicle liability insurance or those defined in section fifty of the workers' compensation law, and shall treat such reports as any other received pursuant to this section.
§ 3. Section 2133 of the insurance law, as amended by chapter 77 of the laws of 1994, is amended to read as follows:
§ 2133. [Forged] False insurance documents and forged insurance identification cards. Any insurance company, insurance agent, insurance broker or other person who or which, personally or by the action of an employee or agent, knowingly possesses, transfers or uses: (a) any document which purports to evince insurance coverage when such coverage is not in effect or is in effect at limits less than those stated in the document; or (b) a forged insurance identification card for a motor vehicle, having knowledge, personally or through such employee or agent, of the fact that such insurance identification card, when issued, did not actually represent an owner's policy of liability insurance or a financial security bond issued by an insurance company licensed to do business in this state covering the motor vehicle identified on such card, shall be liable for payment to the people of this state of a civil penalty in a sum not exceeding one thousand dollars for the first such violation and a sum not exceeding five thousand dollars for each subsequent violation. For the purposes of this section the term "forged insurance identification card" means a written insurance identification card which has been falsely made, completed or altered, and the term "falsely made, completed or altered" shall have the same meaning as set forth in section 170.00 of the penal law.
§ 4. Section 165.06 of the penal law, as amended by chapter 413 of the laws of 1982, is amended to read as follows: § 165.06 Unauthorized use of a vehicle in the second degree.
A person is guilty of unauthorized use of a vehicle in the second degree when:
He or she commits the crime of unauthorized use of a vehicle in the third degree as defined in subdivision one of section 165.05 of this article and has been previously convicted of the crime of unauthorized use of a vehicle [in the third degree] as defined in [subdivision one of section 165.05 or second degree] sections 165.05, 165.06, and 165.08, auto stripping as defined in sections 165.09, 165.10, and 165.11, grand larceny of a motor vehicle as defined in sections 155.30, 155.35, 155.40, and 155.42, criminal possession of stolen property as defined in sections 165.40, 165.45, 165.50, 165.52, and 165.54 and the stolen property consisted of a motor vehicle, or illegal possession of a vehicle identification number as defined in section 170.70 within the preceding ten years.
Unauthorized use of a vehicle in the second degree is a class E felony.
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§ 5. Subdivision 5 of section 170.10 of the penal law is amended and a new subdivision 6 is added to read as follows:
5. A prescription of a duly licensed physician or other person authorized to issue the same for any drug or any instrument or device used in the taking or administering of drugs for which a prescription is required by law[.]; or
6. A certificate of insurance or an insurance identification card, as defined in section three hundred eleven of the vehicle and traffic law.
§ 6. Section 170.15 of the penal law is amended to read as follows: § 170.15 Forgery in the first degree.
A person is guilty of forgery in the first degree when, with intent to defraud, deceive or injure another, he or she falsely makes, completes or alters [a]:
1. Ten or more written instruments; or
2. A written instrument which is or purports to be, or which is calculated to become or to represent if completed:
[1.] (a) Part of an issue of money, stamps, securities or other valuable instruments issued by a government or governmental instrumentality; or
[2.] (b) Part of an issue of stock, bonds or other instruments representing interests in or claims against a corporate or other organization or its property.
Forgery in the first degree is a class C felony.
§ 7. The penal law is amended by adding a new section 175.50 to read as follows: § 175.50 Offering a false application for motor vehicle insurance or
registration.
A person is guilty of offering a false application for motor vehicle insurance or registration when knowing that any document he or she files with the department of motor vehicles or an insurer providing liability insurance for a motor vehicle contains a false statement or false information with regard to where he or she resides or where his or her motor vehicle is garaged and operated.
Offering a false application for motor vehicle insurance or registration is a class E felony.
§ 8. Subdivision 1 of section 176.05 of the penal law, as amended by chapter 211 of the laws of 2011, is amended to read as follows:
1. any written statement as part of, or in support of, an application for the issuance of, or the rating of a commercial insurance policy, or certificate or evidence of self insurance for commercial or personal insurance or commercial or personal self insurance, or a claim for payment or other benefit pursuant to an insurance policy or self insurance program for commercial or personal insurance that he or she knows to:
(a) contain materially false information concerning any fact material thereto; or
(b) conceal, for the purpose of misleading, information concerning any fact material thereto; or
§ 9. Section 176.15 of the penal law, as amended by chapter 515 of the laws of 1986, is amended to read as follows: § 176.15 Insurance fraud in the fourth degree.
A person is guilty of insurance fraud in the fourth degree when he [commits] or she:
1. commits a fraudulent insurance act and thereby wrongfully takes, obtains or withholds, or attempts to wrongfully take, obtain or withhold property with a value in excess of one thousand dollars; or
S. 3665 4
2. operates a motor vehicle on a public highway, when being the owner of such motor vehicle, he or she knows the motor vehicle is insured by a policy issued under the laws of another state, when such person maintains his or her principal residence in this state or such motor vehicle is principally garaged in this state, and such insurance policy was issued upon any written or oral statement by such person that he or she principally resides in such other state or that such motor vehicle is principally garaged in such other state.
Insurance fraud in the fourth degree is a class E felony.
§ 10. The vehicle and traffic law is amended by adding a new section 201-a to read as follows:
§ 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-a of section five hundred two of this chapter.
§ 11. 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:
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 franchise express or implied in articles of incorporation upon certain streets designated in such franchise, those facts shall also be certified, and a certified copy of such franchise furnished to the commissioner; (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 additional 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 identification satisfactory to the commissioner and no number plate for a trailer issued under the provisions of subdivision three of section four hundred two of this [chapter] article shall be transferred to or used
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upon any other trailer than the one for which number plate is issued. The commissioner shall require proof, in the application for registration, 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. Applications 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.
§ 12. Section 502 of the vehicle and traffic law is amended by adding a new subdivision 1-a to read as follows:
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, the penal law, and the vehicle and traffic law, in relation to insurance fraud and combatting the theft of motor vehicles
Purpose
The purpose of this bill is reduce the incidence auto theft and 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. By reducing auto theft in New York, that will help to curtain future premium rate increases for auto insurance, especially in our urban areas.
Summary of provisions
Section 1: Adds a new Insurance Law section 401(d) to explicitly expand the authority of the Superintendent of Financial Services, 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.
Read the full memo (1,508 words)
Section 2: Amends Insurance Law section 405(a) to authorize the Insurance Frauds Bureau to accept reports of suspected fraudulent insurance transactions from any self-insurer with regard to motor vehicle liability coverage.
Section 3: Amends Insurance Law section 2133 to expand the scope of prohibition for any insurance company, insurance agent, broker, or other person who knowingly possesses, transfers or uses a forged insurance identification card to also include other false insurance documents which purports to evince insurance coverage when it is not in effect or is at limits less than those stated on the document.
Section 4: Section 1. Amends Section 165.06 of the Penal Law, to include unauthorized use of a motor vehicle in the first degree, grand larceny of a motor vehicle, criminal possession of a motor vehicle, auto stripping or illegal possession of a vehicle identification number as predicate convictions for the unauthorized use of a vehicle in the second degree.
Section 5: Amends Penal Law section 170.10 to add a new (6) to the list of documents that the forgery of is considered to be forgery in the Second Degree. The new document that, if forged, would be forgery in the Second Degree are certificates of insurance or an insurance identification card.
Section 6: Amends Penal Law section 170.15 (Forgery in the First Degree) to include as forgery in the first degree, the fraudulent making, completion, or alteration of 10 or more written instruments, such as certificates of insurance or insurance identification cards:
Section 7: Adds a new Penal Law section 175.50 to make it a class E felony to offer a false application for motor vehicle insurance or registration. Under this provision, anyone who submits to the Department of Motor vehicles or to an auto insurer (to obtain an auto insurance policy or insurance identification card) any document that contains a false statement or information with regard to where such applicant resides or where such applicant's motor vehicle is garaged
or operated and such document is used directly or indirectly to register an automobile shall be a class E felony.
Section 8: Amends Penal Law section 176.05 which defines the term "insurance fraud". Under this bill, the term "insurance fraud" is expanded to include any false document used to secure either insurance coverage, file an insurance policy claim, or obtain payment for personal lines insurance coverages (i.e. auto and homeowners insurance). Under current law, only false documents that are used to secure commercial lines policies or money for claims against a commercial lines policy (i.e. general liability or business property policies) are considered to be insurance fraud. This bill expands the types of insurance policies that persons cannot lie about to obtain coverage or claims payment to include personal lines coverages such as motor vehicle liability or homeowners insurance.
Section 9: Amends Penal Law section 176.15 to expand the scope of insurance fraud in the 4th degree to include the operation of a motor vehicle on a public highway when such operator is insured by a policy issued under the laws of another state, but such person in fact principally lives and garages their vehicle in New York.
Section 10: 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 11: 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 12: 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 theft and auto insurance fraud in this state. These two illegal activities are related to each other because by reducing the incidence of auto theft, that will reduce the cost of providing auto insurance 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 upstate 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 or 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 is revising end updating 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.
Section 4 of this bill addresses an inconsistency in the law as it related to auto theft crimes. Under current law, a person may be charged with the crime of unauthorized use of a vehicle in the second degree if he or she has a prior conviction for unauthorized use within a 10 year period of the new offense. However, this enhancement does not apply if a defendant's prior convictions include more serious offenses such as grand larceny, or other vehicle related crimes. This bill corrects this shortcoming by including the offenses of unauthorized use of a vehicle in the first degree, grand larceny, criminal possession, auto stripping, or illegal possession of a vehicle identification number among the predicate convictions for charge enhancement.
Legislative history
This bill is similar to S. 1146 of 2015/2016 which remained in the Insurance Committee; This bill (S. 2373) passed the Senate in 2013 and 2014, 2011-2012 - S. 4847 - Passed Senate in 2011, and reported to Sen. Calendar in 2012 Similar to S.988 of 2011 - Similar to S.7091 of 2010 - Referred to Insurance
Fiscal implications
None
Effective date
180 days after it shall have become law, provided however, that sections 4, 5, 6, 7, 8 and 9 shall go into effect on November 1, next succeeding the date on which it shall have become law.
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