The New York Attorney General’s Office has forwarded a letter about possible price-fixing by auto insurers written by New York State Auto Collision Technicians Association (NYSACTA) President Mike Orso to its Auto Insurance Fraud Unit for further consideration.
Orso wrote the letter (click HERE to read it) in the wake of Attorney General Andrew Cuomo’s investigation into price-fixing by health insurers, which revealed that the widely used Ingenix healthcare database intentionally skewed rates downward through faulty data collection, poor pooling procedures and lack of audits.
The recently released results of a year-plus investigation by the New York Department of Insurance also revealed that some New York auto insurers violated state insurance laws while handling claims (click HERE to read about the findings). Violations included questioning the quality of a non-network shop’s repairs and setting a goal of having 45 to 60 percent of repairable vehicles repaired at network shops. The report concluded that overall, most insurers have not systematically steered customers to preferred shops.
“Under any other circumstance, the law would step in,” NYSACTA Executive Director Ed Kizenberger said. “If a community has 1,000 residents and one of the residents is known to be committing robberies, it doesn’t make robbery any less of a crime.”
Orso said that since his letter to Cuomo was published, NYSACTA has received a great deal of feedback from the industry, including a letter from an independent appraiser who said over the years, his business dropped from $4.5 million in sales and 16 subcontractors to a staff of three or four and $350,000 in sales.
“This is not too far from the fate most independent shops are experiencing,” Orso noted. “Ironically, the various tying arrangements and steering are having the same effect on both industries.”
NYSACTA is now awaiting response from the Auto Insurance Fraud Unit. For more information, visit www.liabra.org.
