What's happening
This bill allows people who report insurance fraud to receive 40% of proceeds from successful legal actions based on their information.
Why it matters
Creates a significant financial incentive (40% of recovered proceeds) for private citizens to report insurance fraud. , which could greatly increase the number of fraud cases brought to authorities’ attention and prosecuted.
Limits eligibility for the reward to individuals not already obligated to report fraud. (such as insurance company employees covered by existing law), focusing the benefit on outside whistleblowers.
Requires courts to consider the whistleblower’s contribution to the case when deciding on the award amount. , which encourages detailed, actionable reporting rather than vague or insubstantial tips.
Could lead to increased detection and deterrence of insurance fraud. , potentially lowering overall insurance costs or reducing criminal activity, but may also raise concerns about frivolous or bad-faith reports motivated by financial gain.
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Who cares
Eligible insurance-fraud tipsters
The bill would entitle qualifying informants to 40% of an action’s proceeds when their information leads to a bureau recommendation to bring an action or an action by the attorney general or a district attorney.
Attorney general and district attorneys
They would receive fraud reports and recommend award amounts to the court when a settlement is entered.
Insurance frauds bureau
Its recommendation to prosecutors to commence an action based on a qualifying tip would trigger the informant’s entitlement to an award.
Courts handling insurance-fraud actions
They would base award decisions on how substantially the informant contributed to prosecuting the action.
Headline styles
Pay Whistleblowers for Insurance Fraud
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
3072
2019-2020 Regular Sessions
IN ASSEMBLY
January 28, 2019
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.
LBD05401-01-9
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.