Senate Majority Leader Calls B.S. On Hochul’s Insurance Fraud Claims

ALBANY — Who’s the fraud?

State Senate Majority Leader Andrea Stewart-Cousins disputed Gov. Hochul’s claim that fraud is behind high car insurance premiums, mirroring reporting from Streetsblog that largely debunked Hochul’s Uber-pushed talking point.

“At first, it was like, ‘Fraud, fraud, fraud,’ but then when you drill down, it really wasn’t fraud,” Stewart-Cousins told reporters in the state Capitol.

She said insurance companies are instead blaming large payouts for rising premiums.

Hochul’s car insurance proposal centers on the idea that auto insurance premiums have risen due to excessive litigation and rampant fraud, though Streetsblog’s reporting has raised questions. To lower car insurance costs, the governor included language in her executive budget that would curtail some crash victims’ rights to seek full compensation following an incident, and would make it easier to prosecute auto insurance fraud.

Lawmakers are skeptical, and claim they have not seen sufficient proof that Hochul’s proposal will reduce premiums. Budget negotiations between the state Legislature and the governor have been slow-moving as a result.

Limiting payouts is the fulcrum of a pricey lobbying war among insurance companies, Uber and the New York State Trial Lawyers Association, which opposes Hochul’s auto insurance proposal. Uber has also spent more than $8 million in support of the proposal, and Citizens For Affordable Rates, an organization it funds, has been sending fraudulent emails to lawmakers that are signed by none-the-wiser constituents or dead people.

Stewart-Cousins said her chamber is eager to find the right balance between saving money for car owners and retaining legal rights for crash victims. If there is a compromise, it would need to involve the insurance industry and the Hochul administration just as much as it involves state lawmakers and the public.

“That’s why we’re at the table,” she said.

But the Senate isn’t even clear on the best way to reduce costs. Deputy Senate Majority Leader Mike Gianaris told reporters last week that he doesn’t see the logic in Hochul’s plan to invoke the “Excess Profit Law” to force insurers to rebate some of their large profits — a law that has apparently never been used for that purpose.

“Number one, we want to make sure that if we do these changes, that people will indeed see a reduction in the insurance that they’re going to pay,” said Stewart-Cousins. “So we want to make sure that the cure is actually that.”

In response to Stewart-Cousins pointing out the flaws in a key part of her argument for insurance reform, the Hochul administration responded with snark.

“It’s actually not complicated: auto insurance fraud results in fraudulent insurance payouts,” Hochul spokesperson Sean Butler said in a statement. “And with suspected fraud jumping 80 percent over the last five years, everyone ends up paying the price.”

Butler said that “price” raises the average annual rate by $300 per policy, though the Citizens Budget Commission says it’s more like $200.

Stewart-Cousins has been very gracious towards the governor, who wields outsized power in the state budget process, and has claimed repeatedly that Hochul has been negotiating in “good faith.”

That’s an odd summary, given that Stewart-Cousins is essentially accusing the governor of using made-up arguments as she tries to push through budget policy that has been described as a “disaster” for crash victims.

The governor has blamed pushback to her proposal on the trial lawyers, decrying them as a “special interest,” even as Big Tech bankrolls an ad blitz in support of her budget. In the process, she has played down the testimony of crash victims who oppose her proposal.

The state budget has made incremental progress, but nothing significant since last week. So long as lawmakers worry about the well-being of their constituents, negotiations could drag out even longer, with insurance leading the laundry list of issues.

“They’re all sticky,” according to Stewart-Cousins.

The budget is 22 days late.