NY State Senate Bill 2025-S6364

Current Bill Status - In Senate Committee Finance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
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Delivered to Governor
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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 11, 2025	referred to finance

2025-S6364 (ACTIVE) - Details

Current Committee:: Senate Finance
Law Section:: Appropriations
Laws Affected:: Add §405-a, Ins L; amd Pen L, generally; amd §846-m, Exec L

2025-S6364 (ACTIVE) - Summary

Relates to insurance fraud; provides a provision for compensation to a person that reports insurance fraud to the authorities; establishes crimes of unlawful procurement of clients, patients or customers; aggravated insurance fraud in the second degree

2025-S6364 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S6364

SPONSOR: HELMING
 
TITLE OF BILL:

An act to amend the insurance law, the penal law and the executive law,
in relation to insurance fraud; and making an appropriation therefor

 
PURPOSE:

To combat insurance fraud by providing an incentive for individuals to
report instances of fraud, expand definitions within the penal law to
reflect the fraudulent acts regulators and law enforcement are currently
facing, modify existing offenses and create new offenses within the
penal law to hold those committing fraud accountable, and provide fund-
ing to support anti-fraud efforts via the motor vehicle theft and insur-
ance fraud prevention fund.

 
SUMMARY OF PROVISIONS:

Section 1: Amends the insurance law by adding a new section. This new
section allows an individual who is not engaged in the business of

insurance or life settlement who reports an incident of insurance fraud
to the attorney general, district attorney or insurance frauds bureau to
receive an award for doing so. This award shall only occur if the insur-
ance frauds bureau recommends that the attorney general or district
attorney commence an action or the attorney general or district attorney
commences an action based on the information provided. Such award shall
be 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.

Section 2: Amends section 176.00 of the penal law by adding three new
subdivisions. These subdivisions define the terms "provider," "public
media," and "runner" as they relate to insurance fraud.

Section 3: Amends subdivision 1 of section 176.05 of the penal law to
expand the definition of a fraudulent insurance act to include any writ-
ten statement as part of, or in support of, an application for the issu-
ance of, or the rating of a policy insuring against losses liabilities
arising out of the ownership, operation, or use of a motor vehicle.

Section 4: Amends the penal law by adding a section creating the offense
of unlawful procurement of clients, patients or customers. A person is
guilty of unlawful procurement of clients, patients or customers when
such person knowingly acts as a runner; or uses, solicits, directs,
hires, or employs another person to act as a runner. Unlawful procure-
ment of clients, patients or customers is a class E felony.

Section 5: Amends section 176.15 of the penal law to amend the monetary
threshold for the offense of insurance fraud in the fourth degree from
$1,000 to $500.

Section 6: Amends section 176.20 of the penal law to amend the monetary
threshold for the offense of insurance fraud in the third degree from
$3,000 to $1,500.



Section 7: Amends section 176.25 of the penal law to, amend the monetary
threshold for the offense of insurance fraud in the second degree from
$50,000 to $25,000.

Section 8: Amends section 176.30 of the penal law to amend the monetary
threshold for the offense of insurance fraud in the first degree from
$1,000,000 to $500,000.

Section 9-10: Amends the penal law to' create the offenses of aggravated
insurance fraud in the first, second, and third degree.

Section 11: Directs that beginning January 1, 2026, additional monies
received by the motor vehicle theft and insurance fraud prevention fund
pursuant to an appropriation made by a chapter of the laws of two thou-
sand twenty-five 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.

Section 12: Appropriates $3.1 million to the Department of Transporta-
tion 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 this act.

Section 13: Severability Clause

Section 14: This act shall take effect on the ninetieth day after it
shall have become a law.

 
JUSTIFICATION:

According to the New York State Department of Financial Services (DFS),
"insurance fraud is a crime that victimizes every resident of New York
State, costing consumers millions of dollars in the form of increased
premiums and higher prices for goods and services." While it is diffi-
cult to estimate the exact cost that insurance fraud imposes on New York
State residents, it is widely agreed that it is a significant issue
impacting the affordability of insurance.

Insurance fraud is also on the'rise in New York State, with a 2024
report from DFS showing a total of 44,998 reports of suspected insurance
fraud in 2023, a 2% increase from the previous year. In addition to
these figures from DFS, news reports continue to surface of staged auto
and construction site accidents aimed at defrauding insurers.

Action must be taken to stop this rise in fraud and prevent bad actors
from driving up insurance premiums for all New Yorkers.  This legis-
lation would incentivize individuals to report insurance fraud by award-
ing them a portion of an action or settlement of a claim if the informa-
tion they provide leads to legal action against perpetrators of fraud.
Because many instances of insurance fraud are never reported, it is
crucial that New Yorkers are encouraged to report suspected insurance
fraud to authorities to improve enforcement.

This legislation would also amend portions of the penal law to make it
easier to hold fraudsters accountable. These include expanding current
legal definitions related to insurance fraud to account for the types of
fraudulent acts that regulators and law enftircement are currently
facing and reducing the monetary thresholds that must be met to charge
individuals with certain offenses. This legislation also creates several
new offenses, including aggravated insurance fraud in the first, second
and third degree, to provide prosecutors with necessary tools to hold
individuals accountable.

Finally, this legislation makes funding available through the motor
vehicle theft and insurance fraud prevention fund to support efforts
undertaken by district attorneys to detect, identify and prosecute fraud
and appropriates monies to the fund for this putpose.

 
LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become law

2025-S6364 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6364
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              March 11, 2025
                                ___________
 
 Introduced  by  Sen. HELMING -- read twice and ordered printed, and when
   printed to be committed to the Committee on Finance
 
 AN ACT to amend the insurance law, the penal law and the executive  law,
   in relation to insurance fraud; 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. 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
 BASE SUCH AWARD DECISION ON THE EXTENT TO WHICH THE PERSON SUBSTANTIALLY
 CONTRIBUTED TO THE PROSECUTION OF THE ACTION.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10430-01-5
 S. 6364                             2

 
   § 2. 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 THEY, OR THEIR 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.
   § 3. 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] SUCH PERSON 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
   §  4.  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, SUCH PERSON 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.
   § 5. 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]
 SUCH PERSON commits a fraudulent insurance act  and  thereby  wrongfully
 takes,  obtains  or withholds, or attempts to wrongfully take, obtain or
 S. 6364                             3
 
 withhold property with a value in excess of [one thousand] FIVE  HUNDRED
 dollars.
   Insurance fraud in the fourth degree is a class E felony.
   § 6. 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]
 SUCH PERSON 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.
   §  7.  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]
 SUCH  PERSON  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.
   §  8.  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]
 SUCH  PERSON  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.
   § 9. 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]  SUCH PERSON 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.
   §  10.  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  SUCH  PERSON  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 SUCH PERSON 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.
   AGGRAVATED INSURANCE FRAUD IN THE FIRST DEGREE IS A CLASS B FELONY.
 S. 6364                             4
 
   § 11. 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  TWENTY-SIX,  ADDITIONAL  MONIES
 RECEIVED  BY  THE FUND PURSUANT TO AN APPROPRIATION MADE BY A CHAPTER OF
 THE LAWS OF TWO THOUSAND TWENTY-FIVE AMENDING THIS  PARAGRAPH  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.
   §   12.  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.
   § 13. 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.
   §  14.  This act shall take effect on the ninetieth day after it shall
 have become a law.

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Senate Bill S6364

Sponsored By

Current Bill Status - In Senate Committee Finance Committee

2025-S6364 (ACTIVE) - Details

2025-S6364 (ACTIVE) - Summary

2025-S6364 (ACTIVE) - Sponsor Memo

2025-S6364 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S6364

Share this bill

Sponsored By

Pamela Helming

Current Bill Status - In Senate Committee Finance Committee

2025-S6364 (ACTIVE) - Details

2025-S6364 (ACTIVE) - Summary

2025-S6364 (ACTIVE) - Sponsor Memo

2025-S6364 (ACTIVE) - Bill Text download pdf

Comments