S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3911
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 30, 2017
                                ___________
 
 Introduced  by  M.  of  A. BARCLAY, BLANKENBUSH, GIGLIO, KOLB, McKEVITT,
   MONTESANO, MURRAY, OAKS, WALTER -- Multi-Sponsored  by  --  M.  of  A.
   BUTLER,  CROUCH, CURRAN, DiPIETRO, FINCH, GOODELL, McDONOUGH, McLAUGH-
   LIN, PALMESANO, THIELE -- read once and referred to the  Committee  on
   Insurance

 AN  ACT to amend the insurance law, the penal law and the executive law,
   in relation to establishing the New York  automobile  insurance  fraud
   and premium reduction act; and making an appropriation therefor
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act shall be known and may be cited as the  "New  York
 automobile insurance fraud and premium reduction act".
   § 2. The insurance law is amended by adding a new section 5110 to read
 as follows:
   §  5110. CERTIFICATION OF MANAGED CARE ORGANIZATIONS. (A)(1) ANY INDI-
 VIDUAL OR GROUP AUTHORIZED TO  PROVIDE  MEDICAL  OR  OTHER  HEALTH  CARE
 SERVICES  IN  THIS STATE MAY, DIRECTLY OR THROUGH AN AUTHORIZED INSURER,
 MAKE WRITTEN APPLICATION TO THE SUPERINTENDENT TO  BECOME  CERTIFIED  TO
 PROVIDE MANAGED CARE TO INJURED COVERED PERSONS UNDER THIS ARTICLE.
   (2)  CERTIFICATION SHALL BE VALID FOR SUCH PERIOD AND FOR SUCH SERVICE
 AREAS AS  THE  SUPERINTENDENT  MAY  PRESCRIBE,  UNLESS  SOONER  REVOKED,
 SUSPENDED OR AMENDED.
   (3)  EACH  APPLICATION  FOR  CERTIFICATION  SHALL  BE ACCOMPANIED BY A
 REASONABLE FEE PRESCRIBED BY THE SUPERINTENDENT AND A  PROPOSED  MANAGED
 CARE PROGRAM DETAILING ITS SIGNIFICANT FEATURES, METHODS AND PROCEDURES.
   (B)  APPLICATION  FOR  CERTIFICATION  SHALL  BE  MADE IN SUCH FORM AND
 MANNER, AND SHALL SET FORTH SUCH INFORMATION REGARDING THE PROPOSED PLAN
 OF MANAGED CARE FOR PROVIDING MEDICAL AND OTHER HEALTH CARE SERVICES, AS
 THE SUPERINTENDENT MAY PRESCRIBE, INCLUDING:
   (1) THE NAMES AND CREDENTIALS OF ALL INDIVIDUALS OR ORGANIZATIONS THAT
 WILL PROVIDE SERVICES UNDER THE  MANAGED  CARE  PROGRAM,  TOGETHER  WITH
 APPROPRIATE  EVIDENCE  OF COMPLIANCE WITH ANY LICENSING OR CERTIFICATION
 REQUIREMENTS FOR SUCH INDIVIDUALS OR ORGANIZATIONS TO PRACTICE  IN  THIS
 STATE;
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05382-01-7

 A. 3911                             2
 
   (2)  A  DESCRIPTION  OF  THE  TIMES,  PLACES  AND  MANNER OF PROVIDING
 SERVICES UNDER THE MANAGED CARE PROGRAM;
   (3)  A  DESCRIPTION OF THE TIMES, PLACES AND MANNER OF PROVIDING OTHER
 RELATED OPTIONAL SERVICES THE APPLICANT MAY WISH TO PROVIDE; AND
   (4) A DESCRIPTION AND REPRESENTATIVE COPIES OF  ALL  REMUNERATION  AND
 RELATED  ARRANGEMENTS BETWEEN THE MANAGED CARE ORGANIZATION AND INDIVID-
 UAL PROVIDERS OF SERVICES UNDER THE MANAGED CARE PROGRAM.
   (C) THE SUPERINTENDENT SHALL CERTIFY AN APPLICANT, IF THE  SUPERINTEN-
 DENT FINDS THAT THE MANAGED CARE PROGRAM:
   (1) PROVIDES MEDICAL AND OTHER HEALTH CARE SERVICES THAT MEET QUALITY,
 CONTINUITY  AND  OTHER TREATMENT STANDARDS PRESCRIBED BY THE SUPERINTEN-
 DENT OR THE COMMISSIONER OF HEALTH, IN A MANNER THAT IS  TIMELY,  EFFEC-
 TIVE AND CONVENIENT FOR INJURED PERSONS;
   (2) INCLUDES A SUFFICIENT NUMBER OF EACH CATEGORY OF PROVIDER THROUGH-
 OUT  THE  PROPOSED SERVICE AREAS TO GIVE INJURED PERSONS ADEQUATE FLEXI-
 BILITY TO CHOOSE AN AUTHORIZED PROVIDER FROM  AMONG  THOSE  HEALTH  CARE
 PROVIDERS WHO PARTICIPATE IN THE MANAGED CARE PROGRAM;
   (3)  PROVIDES  APPROPRIATE FINANCIAL INCENTIVES OR OTHER APPROACHES TO
 REDUCE COSTS AND MINIMIZE IMPROPER UTILIZATION WITHOUT SACRIFICING QUAL-
 ITY OF SERVICE;
   (4) PROVIDES ADEQUATE METHODS OF PEER REVIEW, UTILIZATION REVIEW,  AND
 DISPUTE  RESOLUTION,  INCLUDING WHERE APPLICABLE, ACCESS TO THE EXTERNAL
 APPEAL PROCESS AS PROVIDED IN ARTICLE FORTY-NINE  OF  THIS  CHAPTER,  IN
 ORDER  TO:  (A)  PREVENT INAPPROPRIATE OR EXCESSIVE TREATMENT; (B) AVOID
 CONFLICTS  OF INTEREST; (C) EXCLUDE FROM PARTICIPATION  IN  THE  PROGRAM
 THOSE  PROVIDERS  WHO  VIOLATE  REASONABLE  TREATMENT STANDARDS; AND (D)
 PROVIDE FOR THE RESOLUTION OF MEDICAL DISPUTES;
   (5) PROVIDES A TIMELY AND ACCURATE METHOD OF REPORTING TO  THE  SUPER-
 INTENDENT OR THE COMMISSIONER OF HEALTH AS APPROPRIATE, NECESSARY INFOR-
 MATION REGARDING MEDICAL AND HEALTH CARE SERVICE COST AND UTILIZATION TO
 MONITOR THE EFFECTIVENESS OF THE MANAGED CARE PROGRAM;
   (6)  PROVIDES  A  MECHANISM  FOR AN INJURED PERSON TO OBTAIN TREATMENT
 OUTSIDE OF THE MANAGED CARE PROGRAM IF THE SERVICES ARE NOT AVAILABLE OR
 ACCESSIBLE WITHIN THE PROGRAM;
   (7) PROVIDES FOR A REASONABLE AND APPROPRIATE COORDINATION WITH ANOTH-
 ER HEALTH CARE PROVIDER WHERE THE  INJURED  PERSON  HAS  BEEN  RECEIVING
 TREATMENT  FROM  ANOTHER  HEALTH CARE PROVIDER FOR A PREVIOUSLY EXISTING
 CONDITION OR INJURY WHICH HAS BEEN AGGRAVATED BY THE MOTOR VEHICLE ACCI-
 DENT;
   (8) PROVIDES FOR A MECHANISM FOR  NOTIFICATION  ABOUT  AND  TRANSITION
 FROM EMERGENCY CARE; AND
   (9)  COMPLIES WITH ANY OTHER REQUIREMENT THE SUPERINTENDENT DETERMINES
 IS NECESSARY TO PROVIDE QUALITY MEDICAL AND OTHER HEALTH  CARE  SERVICES
 TO INJURED PERSONS.
   (D)  THE  SUPERINTENDENT MAY CERTIFY A HEALTH MAINTENANCE ORGANIZATION
 ISSUED A CERTIFICATE OF AUTHORITY UNDER ARTICLE FORTY-FOUR OF THE PUBLIC
 HEALTH LAW OR LICENSED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER, IF  IT
 MEETS  THE  REQUIREMENTS  OF  THIS  SECTION. THE SUPERINTENDENT MAY ALSO
 CERTIFY AN ACCIDENT AND HEALTH INSURER, INCLUDING A  CORPORATION  ORGAN-
 IZED  UNDER ARTICLE FORTY-THREE OF THIS CHAPTER, WHICH HAS A PARTICIPAT-
 ING OR PREFERRED NETWORK OF PROVIDERS IF SUCH INSURER MEETS THE REQUIRE-
 MENTS OF THIS SECTION. TO THE EXTENT A  MANAGED  CARE  ORGANIZATION  HAS
 BEEN  REVIEWED,  APPROVED  OR  CERTIFIED  BY  ANOTHER STATE AGENCY AS TO
 ACCESSIBILITY, QUALITY OR CONTINUITY OF CARE OR FOR  ANY  OF  THE  OTHER
 MATTERS  WITHIN  THE  SUPERINTENDENT'S  REVIEW, THE SUPERINTENDENT SHALL
 CONSIDER THE REVIEW, APPROVAL OR CERTIFICATION OF ANOTHER  STATE  AGENCY

 A. 3911                             3

 SO  AS  NOT  TO  DUPLICATE  THOSE  REVIEWS, APPROVALS OR CERTIFICATIONS.
 HOWEVER, NOTHING IN THIS SUBSECTION SHALL BE DEEMED TO LIMIT THE  SUPER-
 INTENDENT'S  AUTHORITY  TO  IMPOSE AND REVIEW ADDITIONAL REQUIREMENTS OR
 STANDARDS  ABOVE AND BEYOND THOSE IMPOSED BY ANOTHER STATE AGENCY TO THE
 EXTENT THOSE REQUIREMENTS OR STANDARDS ARE NECESSARY OR APPROPRIATE  FOR
 IMPLEMENTATION OF THIS SECTION.
   (E)  THE  SUPERINTENDENT  SHALL  REFUSE  TO CERTIFY, OR MAY REVOKE, OR
 SUSPEND OR AMEND THE CERTIFICATION OF, ANY MANAGED CARE ORGANIZATION, IF
 THE SUPERINTENDENT FINDS THAT:
   (1) THE MANAGED CARE PROGRAM FOR PROVIDING SERVICES FAILS TO MEET  THE
 REQUIREMENTS OF THIS SECTION; OR
   (2)  SERVICE  UNDER  THE MANAGED CARE PROGRAM IS NOT BEING PROVIDED IN
 ACCORDANCE WITH ITS TERMS AS DESCRIBED IN THE  APPLICATION  FOR  CERTIF-
 ICATION.
   (F)  FOR  PURPOSES  OF  THIS  SECTION, THE SUPERINTENDENT MAY CONSIDER
 WHETHER PROVIDERS UTILIZED BY A MANAGED CARE ORGANIZATION  OR  OTHERWISE
 AUTHORIZED  TO  PROVIDE  SERVICES  UNDER  THE CONTRACT ARE AUTHORIZED TO
 RENDER MEDICAL CARE IN ACCORDANCE WITH SECTION THIRTEEN-B OF  THE  WORK-
 ERS' COMPENSATION LAW.
   (G)  UTILIZATION  REVIEW, QUALITY ASSURANCE AND PEER REVIEW ACTIVITIES
 PURSUANT TO THIS SECTION SHALL BE SUBJECT TO REVIEW BY  THE  SUPERINTEN-
 DENT  AND  THE  COMMISSIONER  OF HEALTH. FINDINGS BY THE COMMISSIONER OF
 HEALTH OF PROFESSIONAL MISCONDUCT, OR DISCIPLINARY ACTIONS  IN  RELATION
 THERETO,  SHALL  BE REPORTED TO THE APPROPRIATE LICENSING BOARDS AND THE
 SUPERINTENDENT.
   (H) DATA GENERATED BY OR RECEIVED IN CONNECTION WITH THESE ACTIVITIES,
 INCLUDING WRITTEN REPORTS, NOTES OR RECORDS OF ANY SUCH ACTIVITIES OR OF
 THE REVIEW THEREOF, SHALL BE CONFIDENTIAL AND SHALL  NOT  BE  DISCLOSED,
 EXCEPT TO THE EXTENT DETERMINED TO BE NECESSARY BY THE SUPERINTENDENT OR
 THE  COMMISSIONER  OF  HEALTH.  NO DATA GENERATED BY UTILIZATION REVIEW,
 QUALITY ASSURANCE OR PEER REVIEW ACTIVITIES PURSUANT TO THIS SECTION, OR
 THE REVIEW THEREOF, SHALL BE USED IN ANY  ACTION,  SUIT  OR  PROCEEDING,
 EXCEPT TO THE EXTENT DETERMINED TO BE NECESSARY BY THE SUPERINTENDENT OR
 THE COMMISSIONER.
   (I)  A  PERSON PARTICIPATING IN UTILIZATION REVIEW, QUALITY ASSURANCE,
 OR PEER REVIEW ACTIVITIES PURSUANT TO THIS SECTION SHALL NOT BE EXAMINED
 AS TO ANY COMMUNICATION MADE IN THE COURSE OF  SUCH  ACTIVITIES  OR  THE
 FINDINGS THEREOF, NOR SHALL ANY SUCH PERSON BE SUBJECT TO A CIVIL ACTION
 FOR ACTIONS TAKEN OR STATEMENTS MADE IN GOOD FAITH.
   (J) PROVIDED THAT THERE IS COMPLIANCE WITH STANDARDS GOVERNING MANAGED
 CARE  ESTABLISHED  BY  THE SUPERINTENDENT, NO PERSON WHO PARTICIPATES IN
 FORMING ANY NETWORK, COLLECTIVELY NEGOTIATING FEES, OR OTHERWISE  SOLIC-
 ITS  OR ENTERS INTO CONTRACTS IN A GOOD FAITH EFFORT, TO PROVIDE MEDICAL
 OR OTHER HEALTH CARE SERVICES ON A MANAGED CARE BASIS IN ACCORDANCE WITH
 THE PROVISIONS OF THIS SECTION, SHALL BE SUBJECT TO ANTITRUST  LIABILITY
 REGARDING SUCH PARTICIPATION.
   (K) THE PROVISIONS OF THIS SECTION SHALL NOT AFFECT THE CONFIDENTIALI-
 TY OR ADMISSION IN EVIDENCE OF A CLAIMANT'S MEDICAL TREATMENT RECORDS.
   (L)  THE  SUPERINTENDENT,  IN  CONSULTATION  WITH  THE COMMISSIONER OF
 HEALTH, SHALL ADOPT SUCH RULES AS MAY BE  NECESSARY  TO  CARRY  OUT  THE
 PROVISIONS OF THIS SECTION.
   §  3.  Paragraph  1 of subsection (a) of section 5102 of the insurance
 law, as amended by chapter 298 of the laws of 2006, is amended  to  read
 as follows:
   (1)  All  necessary  expenses  incurred  for:  (i)  medical,  hospital
 (including services rendered in compliance with article forty-one of the

 A. 3911                             4
 
 public health law, whether or not such services are rendered directly by
 a hospital), surgical, nursing, dental, ambulance,  x-ray,  prescription
 drug   and  prosthetic  services;  (ii)  psychiatric,  physical  therapy
 (provided that treatment is rendered pursuant to a referral) and occupa-
 tional  therapy  and rehabilitation; (iii) any non-medical remedial care
 and treatment rendered in accordance with a religious method of  healing
 recognized  by  the  laws of this state; and (iv) any other professional
 health services; all without limitation as to time, provided that within
 one year after the date of the accident causing the injury it is  ascer-
 tainable  that further expenses may be incurred as a result of the inju-
 ry. For the purpose of determining basic  economic  loss,  the  expenses
 incurred  under  this  paragraph shall be in accordance with the limita-
 tions of section five  thousand  one  hundred  eight  of  this  article.
 MEDICAL TREATMENTS, DIAGNOSTIC TESTS AND SERVICES PROVIDED BY THE POLICY
 SHALL  BE  RENDERED  IN  ACCORDANCE WITH COMMONLY ACCEPTED PROTOCOLS AND
 PROFESSIONAL STANDARDS AND PRACTICES  WHICH  ARE  COMMONLY  ACCEPTED  AS
 BEING BENEFICIAL FOR THE TREATMENT OF THE COVERED INJURY.  PROTOCOLS AND
 PROFESSIONAL  STANDARDS  AND  PRACTICES  WHICH ARE DEEMED TO BE COMMONLY
 ACCEPTED PURSUANT TO THIS SECTION SHALL BE THOSE RECOGNIZED BY  NATIONAL
 STANDARD SETTING ORGANIZATIONS, NATIONAL OR STATE PROFESSIONAL ORGANIZA-
 TIONS  OF  THE  SAME DISCIPLINE AS THE TREATING PROVIDER OR THOSE DESIG-
 NATED OR APPROVED BY THE SUPERINTENDENT  IN  CONSULTATION  WITH  PROFES-
 SIONAL  LICENSING  BOARDS IN THE DEPARTMENT OF HEALTH AND THE DEPARTMENT
 OF EDUCATION. THE SUPERINTENDENT, IN CONSULTATION WITH THE COMMISSIONERS
 OF HEALTH AND EDUCATION, MAY REJECT THE USE OF PROTOCOLS, STANDARDS  AND
 PRACTICES  OR  LISTS  OF DIAGNOSTIC TESTS SET BY ANY ORGANIZATION DEEMED
 NOT TO HAVE STANDING OR GENERAL RECOGNITION BY THE PROVIDER COMMUNITY OR
 APPLICABLE LICENSING BOARDS.   PROTOCOLS SHALL BE  DEEMED  TO  ESTABLISH
 GUIDELINES AS TO STANDARD APPROPRIATE TREATMENT AND DIAGNOSTIC TESTS FOR
 INJURIES  SUSTAINED  IN  AUTOMOBILE  ACCIDENTS, BUT THE ESTABLISHMENT OF
 STANDARD TREATMENT PROTOCOLS OR  PROTOCOLS  FOR  THE  ADMINISTRATION  OF
 DIAGNOSTIC  TESTS  SHALL  NOT  BE  INTERPRETED  IN  SUCH  A MANNER AS TO
 PRECLUDE VARIANCE WHEN WARRANTED BY REASON  OF  MEDICAL  NECESSITY.  THE
 POLICY  FORM  MAY  PROVIDE  FOR PRE-CERTIFICATION OF CERTAIN PROCEDURES,
 TREATMENTS, DIAGNOSTIC TESTS OR OTHER SERVICES OR FOR  THE  PURCHASE  OF
 DURABLE  MEDICAL  GOODS  OR  EQUIPMENT, EXCEPT THAT NO PRE-CERTIFICATION
 REQUIREMENT SHALL APPLY WITHIN TEN DAYS OF THE ACCIDENT GIVING  RISE  TO
 THE INJURY.
   § 4. Subsection (d) of section 5103 of the insurance law is amended to
 read as follows:
   (d)  Insurance  policy forms for insurance to satisfy the requirements
 of subsection (a) [hereof] OF THIS SECTION shall be subject to  approval
 pursuant to article twenty-three of this chapter. Minimum benefit stand-
 ards for such policies and for self-insurers, and rights of subrogation,
 examination  and  other such matters, shall be established by regulation
 pursuant to section three hundred one of this chapter, PROVIDED,  HOWEV-
 ER,  THAT  EFFECTIVE  IMMEDIATELY  SUCH  REGULATION  SHALL  BE DEEMED TO
 INCLUDE NEW PROVISIONS APPLICABLE TO INJURIES WHICH OCCUR  ON  OR  AFTER
 THE  EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND SEVENTEEN
 THAT AMENDED THIS SUBSECTION AND ESTABLISHED  THE  NEW  YORK  AUTOMOBILE
 INSURANCE  FRAUD  AND  PREMIUM  REDUCTION  ACT.    SUCH REGULATION SHALL
 PROVIDE THAT THE INITIAL FILING OF A NOTICE OF THE EXISTENCE OF A  CLAIM
 OR  CLAIMS  FOR  FIRST  PARTY BENEFITS BY A COVERED PERSON SHALL BE MADE
 WITHIN THIRTY DAYS OF SUSTAINING AN  INJURY  FOR  WHICH  SUCH  CLAIM  OR
 CLAIMS  MAY  BE MADE, BUT WHICH PERMIT THE FILING OF SUCH INITIAL NOTICE
 OF THE EXISTENCE OF A CLAIM OR CLAIMS AS SOON AS REASONABLY  PRACTICABLE

 A. 3911                             5
 
 AFTER  THE  EXPIRATION OF SUCH THIRTY DAY PERIOD WHERE THE NATURE OF THE
 INJURY RESULTS IN A REASONABLY JUSTIFIABLE DELAY IN FILING  THE  INITIAL
 NOTICE DURING SUCH THIRTY DAY PERIOD.
   §  5.  Section  5108  of  the insurance law is amended by adding a new
 subsection (d) to read as follows:
   (D) PROOF OF THE FACT AND COST OF  A  MEDICAL  OR  HEALTH  SERVICE  OR
 TREATMENT  WHICH  IS  NEEDED  FOR A COVERED PERSON TO RECEIVE PAYMENT OR
 REIMBURSEMENT FOR THAT PORTION OF A CLAIM OR CLAIMS ATTRIBUTABLE TO SUCH
 SERVICE OR TREATMENT, WHETHER SUCH PROOF IS SUBMITTED TO A  FIRST  PARTY
 OR  ADDITIONAL  FIRST  PARTY  BENEFITS  INSURER BY THE COVERED PERSON OR
 DIRECTLY BY A MEDICAL PROFESSIONAL OR HEALTH SERVICES PROVIDER ON BEHALF
 OF SUCH COVERED PERSON, FOR A SERVICE RENDERED BY THE MEDICAL OR  HEALTH
 SERVICES  PROVIDER  TO  THE  COVERED  PERSON  SHALL  BE SUBMITTED WITHIN
 FORTY-FIVE DAYS FROM THE DATE THE SERVICE WAS RENDERED  TO  THE  COVERED
 PERSON.  AT  THE  OPTION  OF  THE INSURER, IN ANY CASE WHERE MULTIPLE OR
 CONTINUING MEDICAL OR HEALTH TREATMENTS OR SERVICES ARE  REQUIRED,  SUCH
 TIME  LIMIT  MAY BE WAIVED AND THE CLAIMS OF ONE OR MORE SUCH MEDICAL OR
 HEALTH SERVICE PROVIDERS MAY BE BUNDLED.
   § 6. Section 5106 of the insurance law, subsection (b) as amended  and
 subsection  (d)  as added by chapter 452 of the laws of 2005, is amended
 to read as follows:
   § 5106. Fair claims settlement. (a) Payments of first  party  benefits
 and  additional  first  party  benefits  shall  be  made  as the loss is
 incurred. Such benefits are overdue if not paid within  [thirty]  FORTY-
 FIVE  days  after  the claimant supplies proof of the fact and amount of
 loss sustained. If proof is not supplied as to  the  entire  claim,  the
 amount  which is supported by proof is overdue if not paid within [thir-
 ty] FORTY-FIVE days after such proof is supplied. All  overdue  payments
 shall  bear  interest  at  the rate of two percent per month. If a valid
 claim or portion was overdue, the claimant shall  also  be  entitled  to
 recover   his   attorney's  reasonable  fee,  for  services  necessarily
 performed in connection with securing  payment  of  the  overdue  claim,
 subject to limitations promulgated by the superintendent in regulations.
 THE FAILURE TO ISSUE A DENIAL OF A CLAIM WITHIN THE FORTY-FIVE DAY PERI-
 OD  PROVIDED  FOR IN THIS SUBSECTION SHALL NOT PRECLUDE THE INSURER FROM
 RAISING A DEFENSE TO THE CLAIM WHERE THE INSURER HAS MADE  A  REPORT  TO
 THE  INSURANCE  FRAUDS  BUREAU  PURSUANT TO SECTION FOUR HUNDRED FIVE OF
 THIS CHAPTER. AN INSURER WILL ALSO NOT BE  PRECLUDED  FROM  ESTABLISHING
 THAT THE CLAIMANT HAS FAILED TO MEET ITS PRIMA FACIE BURDEN OF PROOF.
   (b)  Every  insurer shall [provide] NOTIFY a claimant [with the option
 of submitting] THAT any dispute involving the insurer's liability to pay
 first party benefits, or additional first  party  benefits,  the  amount
 thereof  or  any other matter which may arise pursuant to subsection (a)
 of this section [to] MUST BE SETTLED BY arbitration pursuant to  simpli-
 fied  procedures  to  be  promulgated or approved by the superintendent.
 Such simplified procedures shall include an expedited eligibility  hear-
 ing  option,  when  required,  to  designate the insurer for first party
 benefits pursuant to subsection  (d)  of  this  section.  The  expedited
 eligibility  hearing  option  shall  be a forum for eligibility disputes
 only, and shall not include  the  submission  of  any  particular  bill,
 payment or claim for any specific benefit for adjudication, nor shall it
 consider any other defense to payment.
   (c) An award by an arbitrator shall be binding except where vacated or
 modified by a master arbitrator in accordance with simplified procedures
 to  be  promulgated  or  approved by the superintendent. The grounds for
 vacating or modifying an arbitrator's award by a master arbitrator shall

 A. 3911                             6
 
 not be limited to those grounds for review set forth in  article  seven-
 ty-five of the civil practice law and rules. The award of a master arbi-
 trator  shall  be binding except for the grounds for review set forth in
 article  seventy-five of the civil practice law and rules[, and provided
 further that where the amount of such master arbitrator's award is  five
 thousand  dollars or greater, exclusive of interest and attorney's fees,
 the insurer or the claimant may institute a court action  to  adjudicate
 the dispute de novo].
   (d)  Where  there  is reasonable belief more than one insurer would be
 the source of first party benefits, the insurers may agree  among  them-
 selves, if there is a valid basis therefor, that one of them will accept
 and  pay  the  claim  initially. If there is no such agreement, then the
 first insurer to whom notice of claim is given shall be responsible  for
 payment. Any such dispute shall be resolved in accordance with the arbi-
 tration  procedures  established  pursuant  to section five thousand one
 hundred five of this article and regulation as promulgated by the super-
 intendent, and any insurer paying first-party benefits  shall  be  reim-
 bursed  by  other insurers for their proportionate share of the costs of
 the claim and the allocated expenses of processing the claim, in accord-
 ance with the provisions entitled "other coverage"  contained  in  regu-
 lation  and  the provisions entitled "other sources of first-party bene-
 fits" contained in regulation. If there is no such insurer and the motor
 vehicle accident occurs in this state, then an applicant who is a quali-
 fied person as defined in article fifty-two of this chapter shall insti-
 tute the claim against motor  vehicle  accident  indemnification  corpo-
 ration.
   §  7.   Subsection (c) of section 5303 of the insurance law is amended
 to read as follows:
   (c) Such plan shall provide  for  the  method  of  classifying  risks,
 establishing  territories  and  making  rates  applicable  thereto. Such
 rates[, except with respect to rates for the minimum limits of insurance
 required by article six or seven of the vehicle and traffic law,]  shall
 be  based upon loss and expense experience of the risks insured pursuant
 to the plan.
   § 8. 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 ENFORCE-
 MENT 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 AT LEAST FIFTEEN  PERCENT,  BUT
 NOT  MORE  THAN  TWENTY-FIVE  PERCENT  OF  THE PROCEEDS OF THE ACTION OR
 SETTLEMENT OF THE CLAIM UP TO A MAXIMUM OF TWENTY-FIVE THOUSAND DOLLARS.
 THE ATTORNEY GENERAL OR DISTRICT ATTORNEY SHALL RECOMMEND TO  THE  COURT
 WHEN  A  SETTLEMENT IS ENTERED THE AMOUNT OF SUCH AWARD. THE COURT SHALL

 A. 3911                             7
 
 BASE SUCH AWARD DECISION ON THE EXTENT TO WHICH THE PERSON SUBSTANTIALLY
 CONTRIBUTED TO THE PROSECUTION OF THE ACTION.
   §  9.  Section  176.00 of the penal law is amended by adding three new
 subdivisions 6, 7 and 8 to read as follows:
   6. "PROVIDER" MEANS AN ATTORNEY, A HEALTH CARE PROFESSIONAL, AN  OWNER
 OR  OPERATOR  OF  A  HEALTH  CARE  PRACTICE  OR FACILITY, ANY PERSON WHO
 CREATES THE IMPRESSION THAT HE OR  SHE,  OR  HIS  OR  HER  PRACTICE  CAN
 PROVIDE  LEGAL OR HEALTH CARE SERVICES, OR ANY PERSON EMPLOYED OR ACTING
 ON BEHALF OF ANY SUCH PERSON.
   7. "PUBLIC MEDIA" MEANS TELEPHONE DIRECTORIES,  PROFESSIONAL  DIRECTO-
 RIES,  NEWSPAPERS  AND  OTHER  PERIODICALS,  RADIO AND TELEVISION, BILL-
 BOARDS, AND MAILED OR ELECTRONICALLY TRANSMITTED WRITTEN  COMMUNICATIONS
 THAT  DO  NOT  INVOLVE  IN-PERSON  CONTACT  WITH  A SPECIFIC PROSPECTIVE
 CLIENT, PATIENT, OR CUSTOMER.
   8. "RUNNER" MEANS A PERSON WHO, FOR A PECUNIARY BENEFIT,  PROCURES  OR
 ATTEMPTS  TO  PROCURE A CLIENT, PATIENT OR CUSTOMER AT THE DIRECTION OF,
 REQUEST OF OR IN COOPERATION WITH A PROVIDER WHEN SUCH PERSON  KNOWS  OR
 HAS  REASON  TO  KNOW  THAT  THE  PURPOSE OF SUCH PROVIDER IS TO SEEK TO
 FALSELY OR FRAUDULENTLY: OBTAIN BENEFITS UNDER A CONTRACT OF  INSURANCE;
 OR ASSERT A CLAIM AGAINST AN INSURED OR AN INSURANCE CARRIER FOR PROVID-
 ING  SERVICES  TO  THE  CLIENT, PATIENT OR CUSTOMER. SUCH TERM SHALL NOT
 INCLUDE A PERSON WHO PROCURES OR ATTEMPTS TO PROCURE  CLIENTS,  PATIENTS
 OR  CUSTOMERS FOR A PROVIDER THROUGH PUBLIC MEDIA OR A PERSON WHO REFERS
 CLIENTS, PATIENTS OR CUSTOMERS AS AUTHORIZED BY LAW.   NOTHING  IN  THIS
 ARTICLE  SHALL  BE  DEEMED TO PROHIBIT AN AGENT, BROKER OR EMPLOYEE OF A
 HEALTH MAINTENANCE ORGANIZATION FROM SEEKING TO SELL HEALTH  MAINTENANCE
 ORGANIZATION  COVERAGE  OR HEALTH INSURANCE COVERAGE TO AN INDIVIDUAL OR
 GROUP.
   § 10. 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 POLICY INSURING  AGAINST  LOSSES
 OR  LIABILITIES  ARISING  OUT  OF  THE OWNERSHIP, OPERATION, OR USE OF A
 MOTOR VEHICLE, A commercial insurance policy, or certificate or evidence
 of self insurance for commercial insurance or commercial 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
   §  11. The penal law is amended by adding a new section 176.66 to read
 as follows:
 § 176.66 UNLAWFUL PROCUREMENT OF CLIENTS, PATIENTS OR CUSTOMERS.
   A PERSON IS GUILTY OF UNLAWFUL PROCUREMENT  OF  CLIENTS,  PATIENTS  OR
 CUSTOMERS WHEN, HE OR SHE KNOWINGLY:
   1. ACTS AS A RUNNER; OR
   2.  USES, SOLICITS, DIRECTS, HIRES OR EMPLOYS ANOTHER PERSON TO ACT AS
 A RUNNER.
   UNLAWFUL PROCUREMENT OF CLIENTS, PATIENTS OR CUSTOMERS IS  A  CLASS  E
 FELONY.
   §  12.  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. 3911                             8

   A person is guilty of insurance fraud in the fourth degree when he  OR
 SHE  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] FIVE HUNDRED dollars.
   Insurance fraud in the fourth degree is a class E felony.
   §  13.  Section  176.20 of the penal law, as amended by chapter 515 of
 the laws of 1986, is amended to read as follows:
 § 176.20 Insurance fraud in the third degree.
   A person is guilty of insurance fraud in the third degree when  he  OR
 SHE  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 [three]  ONE  thousand  FIVE  HUNDRED
 dollars.
   Insurance fraud in the third degree is a class D felony.
   §  14. Section 176.25 of the penal law, as added by chapter 515 of the
 laws of 1986, is amended to read as follows:
 § 176.25 Insurance fraud in the second degree.
   A person is guilty of insurance fraud in the second degree when he  OR
 SHE  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 [fifty] TWENTY-FIVE thousand dollars.
   Insurance fraud in the second degree is a class C felony.
   § 15. Section 176.30 of the penal law, as added by chapter 515 of  the
 laws of 1986, is amended to read as follows:
 § 176.30 Insurance fraud in the first degree.
   A  person  is guilty of insurance fraud in the first degree when he OR
 SHE 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 million] FIVE HUNDRED THOUSAND
 dollars.
   Insurance fraud in the first degree is a class B felony.
   § 16. Section 176.35 of the penal law, as added by chapter 635 of  the
 laws of 1996, is amended to read as follows:
 § 176.35 Aggravated insurance fraud IN THE THIRD DEGREE.
   A person is guilty of aggravated insurance fraud in the [fourth] THIRD
 degree  when  he OR SHE commits [a fraudulent insurance act] THE OFFENSE
 OF INSURANCE  FRAUD  IN  THE  FIFTH  DEGREE,  and  has  been  previously
 convicted  within  the preceding five years of any offense, an essential
 element of which is the commission of a fraudulent insurance act.
   Aggravated insurance fraud in the [fourth] THIRD degree is a  class  D
 felony.
   §  17.  The penal law is amended by adding two new sections 176.36 and
 176.37 to read as follows:
 § 176.36 AGGRAVATED INSURANCE FRAUD IN THE SECOND DEGREE.
   A PERSON IS GUILTY OF AGGRAVATED INSURANCE FRAUD IN THE SECOND  DEGREE
 WHEN  HE  OR  SHE  COMMITS  THE OFFENSE OF INSURANCE FRAUD IN THE FOURTH
 DEGREE, AND HAS BEEN PREVIOUSLY  CONVICTED  WITHIN  THE  PRECEDING  FIVE
 YEARS OF ANY OFFENSE, AN ESSENTIAL ELEMENT OF WHICH IS THE COMMISSION OF
 A FRAUDULENT INSURANCE ACT.
   AGGRAVATED INSURANCE FRAUD IN THE SECOND DEGREE IS A CLASS C FELONY.
 § 176.37 AGGRAVATED INSURANCE FRAUD IN THE FIRST DEGREE.
   A  PERSON  IS GUILTY OF AGGRAVATED INSURANCE FRAUD IN THE FIRST DEGREE
 WHEN HE OR SHE COMMITS THE OFFENSE  OF  INSURANCE  FRAUD  IN  THE  THIRD
 DEGREE,  AND  HAS  BEEN  PREVIOUSLY  CONVICTED WITHIN THE PRECEDING FIVE
 YEARS OF ANY OFFENSE, AN ESSENTIAL ELEMENT OF WHICH IS THE COMMISSION OF
 A FRAUDULENT INSURANCE ACT.

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   AGGRAVATED INSURANCE FRAUD IN THE FIRST DEGREE IS A CLASS B FELONY.
   § 18. Paragraph (a) of subdivision 2 of section 846-m of the executive
 law,  as  amended  by  section  6 of part T of chapter 57 of the laws of
 2000, is amended to read as follows:
   (a) The moneys received by the fund shall be expended in a manner that
 is consistent with the plan of  operation,  pursuant  to  appropriation,
 only  to reimburse costs incurred by provider agencies for pilot program
 activities relating to the detection, prevention or reduction  of  motor
 vehicle theft and motor vehicle insurance fraud, PROVIDED, HOWEVER, THAT
 BEGINNING  JANUARY  FIRST,  TWO  THOUSAND  EIGHTEEN,  ADDITIONAL  MONIES
 RECEIVED BY THE FUND PURSUANT TO AN APPROPRIATION MADE BY A  CHAPTER  OF
 THE  LAWS OF TWO THOUSAND SEVENTEEN ESTABLISHING THE NEW YORK AUTOMOBILE
 INSURANCE FRAUD AND PREMIUM REDUCTION ACT SHALL BE USED  EXCLUSIVELY  TO
 SUPPORT EFFORTS UNDERTAKEN BY DISTRICT ATTORNEYS TO DETECT, IDENTIFY AND
 PROSECUTE FRAUD PERTAINING TO ARTICLE FIFTY-ONE OF THE INSURANCE LAW.
   §  19.  No later than eighteen months after the effective date of this
 act, the superintendent of insurance shall study, evaluate and report to
 the governor and legislature on the impact and effect  of  this  act  on
 private  passenger  automobile  insurance costs, by rating territory, in
 New York state. The superintendent of insurance shall recommend for each
 insurer, by rating territory,  a  one-time  premium  reduction  for  the
 insurance  required  pursuant  to  article  51 of the insurance law that
 reflects the reduced cost of this type of coverage as a  result  of  the
 provisions  enacted pursuant to this act. Notwithstanding the provisions
 of article 23 of the insurance law, any such recommended reduction shall
 be binding unless demonstrated by an insurer, based on sound  underwrit-
 ing and actuarial principles reasonably related to actual or anticipated
 loss experience, that such reduction would result in underwriting losses
 for policies issued in such rating territory.
   §  20.    The  sum  of  three  million  one  hundred  thousand dollars
 ($3,100,000), or so much thereof as may be necessary, is  hereby  appro-
 priated  to  the  department  of transportation out of any moneys in the
 state treasury in the general fund to the credit of  the  motor  vehicle
 theft  and  insurance fraud prevention fund, not otherwise appropriated,
 and made immediately available, for the  purpose  of  carrying  out  the
 provisions  of  paragraph  (a)  of subdivision 2 of section 846-m of the
 executive law, as amended pursuant to  section  eighteen  of  this  act.
 Such moneys shall be payable on the audit and warrant of the comptroller
 on  vouchers certified or approved by the commissioner of transportation
 in the manner prescribed by law.
   § 21.  Severability clause. If any clause, sentence, paragraph, subdi-
 vision, section or part contained in any  part  of  this  act  shall  be
 adjudged  by  any  court  of  competent jurisdiction to be invalid, such
 judgment shall not affect, impair, or invalidate the remainder  thereof,
 but  shall  be  confined in its operation to the clause, sentence, para-
 graph, subdivision, section or part of this act contained  in  any  part
 thereof  directly  involved  in  the  controversy in which such judgment
 shall have been rendered. It is hereby declared to be the intent of  the
 legislature  that  this act would have been enacted even if such invalid
 provisions had not been included herein.
   § 22. This act shall take effect on the ninetieth day after  it  shall
 have become a law.