Anti-Fraud Provisions in New York Budget Agreement a Win for Consumers, Affordability

Litigation reforms contained in the budget agreement reached by Gov. Kathy Hochul and the New York State Legislature will help reduce fraud and bring down costs across the state, the National Association of Mutual Insurance Companies said today.

“Fighting fraud and reducing excessive litigation will help bring down insurance costs and ease the financial burden facing New Yorkers, and Gov. Hochul deserves a lot of credit for addressing these important issues,” said Sean McLaughlin, regional vice president for the Northeast for NAMIC. “New Yorkers have been stuck with the bill as fraud claims rose by 80 percent between 2020 and 2025, imposing litigation and claims costs 67 percent higher than the national average.”

The governor’s plan tackles these issues head on, strengthening anti-fraud programs, and expanding penalties for fraud.

“We know these reforms will be effective, because we’ve seen them in action in Florida,” McLaughlin said. A recent study by the Perryman Group estimated that litigation reform lowered property/casualty insurance costs in Florida by 14.5 percent, contributing more than $4.2 billion to the state’s GDP and supporting thousands of jobs. “Florida was among the worst insurance markets in the country, but after enacting litigation reform competition has returned and rates have come down.”

The budget agreement also includes provisions to increase the authority of the New York State Department of Financial Services, which oversees the insurance industry. McLaughlin cautioned that increasing the state’s ability to intervene in insurance company operations creates an obligation for regulators as well.

“Increasing the state’s oversight of insurance rate filings creates a responsibly for the state to review and approve filings more quickly and efficiently, red tape and bureaucracy should not be allowed to undermine the benefits of the governor’s anti-fraud efforts,” McLaughlin said. “Insurers need the ability to adapt to changing market conditions and to better compete for consumers as costs come down.”