Recent Publications - Evan H. Krinick

Credit Card Fraud Insurance Case Highlights Barriers to Suits Against Brokers
May 4, 2018 | Evan H. Krinick | Appeals
Four years ago, the New York Court of Appeals issued its decision in Voss v. Netherlands Ins. Co., 22 N.Y.3d 728 (2014), which some thought might lead to more and more insurance brokers being sued by policyholders alleging that brokers had not obtained sufficient insurance or appropriate policies for them. Several recent cases—including by the U.S. …
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Failure to Cooperate in Suspected Fraud Case Can Doom Insured’s Claim
March 1, 2018 | Evan H. Krinick | Appeals
After a policyholder submits a claim to an insurance company, the insurer investigates to determine whether to pay the claim, as the insurer is permitted to do under its insurance policy. On occasion, after an insurer has begun to investigate a claim, it may come to believe that the claim is fraudulent, or at least …
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A Warning Signal for Auto Insurers From the Second Circuit
January 4, 2018 | Evan H. Krinick | Appeals
Twenty-five years ago, in Riordan v. Nationwide Mutual Fire Ins. Co., 977 F.2d 47 (2d Cir. 1992), the U.S. Court of Appeals for the Second Circuit ruled that New York General Business Law §349—one of the most powerful consumer fraud provisions of New York law—was applicable to insurance companies’ interactions with policyholders. In Riordan, the …
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Appellate Term Split on Payment of Disputed No-Fault Claims
November 2, 2017 | Evan H. Krinick | Insurance Coverage
Unless resolved by the Appellate Division or by the New York Court of Appeals, or clarified by the legislature or the Department of Financial Services, the Appellate Term split will make it difficult for automobile insurers to accurately calculate premium rates for no-fault coverage or to know which claims of health care providers they should …
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Diverse Legal Issues Can Arise in Insurance Fraud Prosecutions
August 31, 2017 | Evan H. Krinick | Insurance Coverage
Even clear proof of a false claim and a criminal defendant’s guilt does not necessarily mean that a criminal insurance fraud case will proceed uneventfully to a conviction, or withstand a defendant’s appeal. In some instances, a defendant who has filed a false claim with intent to defraud an insurance company will file a motion …
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In Term of Transition, Court Sides With Insurers
August 21, 2017 | Evan H. Krinick | Insurance Coverage
The one thing that can be said about the most significant insurance law cases decided by the Court this past term: They all were decided in favor of the insurance carriers. It was a term of transition for the New York Court of Appeals, with Associate Judge Eugene Pigott Jr., retiring at the end of …
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Landmark N.J. Supreme Court Ruling Boosts Fraud Fight
July 7, 2017 | Evan H. Krinick
There seems to be no limit to the kinds of schemes that people create to defraud insurance companies and, by extension, the public, through higher premiums. Now, however, the New Jersey Supreme Court has issued a unanimous decision, Allstate Ins. Co. v. Northfield Medical Center, P.C., No. A-27 (N.J. May 4, 2017), that certainly will …
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Rulings Obtained by Preet Bharara Highlighted Insurance Fraud Problem
May 4, 2017 | Appeals
Over nearly eight years as U.S. Attorney for the Southern District of New York, Preet Bharara became recognized as a powerful prosecutor in many areas, including government corruption and white-collar crime. Another subject for which he certainly deserves mention is his strong record helping to fight insurance fraud in New York. Much can be learned …
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Social Media Is Shining Light on Fraudulent Insurance Claims
March 6, 2017 | Appeals
My January column, “Insurers Using Technology to Fight Insurance Fraud,” N.Y.L.J. Jan. 5, 2017, discussed various new forms of technology that insurance companies are using to fight insurance fraud. These efforts are producing results for insurers—and, in appropriate instances, for federal, state, and local prosecutors—in the battle against insurance fraud. This month’s column highlights a …
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Insurers Using Technology to Fight Insurance Fraud
January 5, 2017 | Appeals
Insurance fraud has been estimated by some to be as large as an $80-billion-per-year problem. See, e.g., Coalition Against Insurance Fraud, “By the numbers: fraud statistics.”1 To fight insurance fraud, insurance companies, working hand-in-hand with their lawyers, have begun to adopt new kinds of technology. These tools—ranging from social media to data analytics—are being used …
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Whistleblowers Play Key Role in Fight Against Federal Health Insurance Fraud
November 4, 2016 | Appeals
The federal False Claims Act (FCA)1 is a powerful tool in the fight against fraud involving federal health insurance programs such as Medicare and Medicaid. Indeed, one of the greatest areas of FCA success is in the health-care industry. From 1987 to 2015, the federal government recovered more than $31.1 billion in health-care-related FCA actions.2 …
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Ruling Boosts Fight Against Criminal and Civil No-Fault Fraud
September 2, 2016 | Appeals
In a civil case involving claims of insurance fraud, the fact-finder is properly instructed to consider factors beyond the formal indicia of ownership in determining the actual ownership of a medical services professional corporation (PC) for purposes of examining the PC’s entitlement to payment from an insurance carrier of claims assigned to the PC by …
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Six Rulings Range From Asbestos Claims to No-Fault Reimbursement
August 22, 2016 | Appeals
The six significant insurance law decisions issued this past term by the New York Court of Appeals covered a wide range of issues. Five of the cases were decided by a unanimous Court, with a dissent (by Judge Eugene M. Fahey) occurring only in one.1 Four different judges wrote an opinion for the Court (Judge …
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When Can a State Prosecute a Multistate Insurance Fraud?
July 8, 2016 | Appeals
Recent examples of criminal insurance fraud in New York1 and elsewhere across the country2 highlight the continuing nature of the insurance fraud problem, despite significant efforts by local and state prosecutors and insurance companies themselves to combat it. Increasing sophistication on the part of criminals, and increased resources available to them, is helping to make …
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Unusual Finding of “Rehabilitation” After Insurance Fraud Sentence
May 6, 2016 | Appeals
Individuals and businesses engaging in insurance fraud can face significant civil penalties under various state and federal laws, including in appropriate cases under the federal Racketeer Influenced and Corrupt Organizations Act. The financial penalties that can result, however, may not truly be a deterrent for judgment-proof defendants. Criminal laws—with the possibility of prison time—clearly can …
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Not Answering Material Questions at EUOs Can Doom Coverage
March 4, 2016 | Appeals | Insurance Coverage
Examinations under oath (EUOs) are an important investigative tool used by insurance carriers to uncover fraudulently filed claims and to commit claimants to their story on the record. EUOs look like depositions but generally do not follow the rules that govern depositions. For example, a witness who refuses to answer questions at a deposition can …
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N.J. Supreme Court to Decide Breadth of Insurance Fraud Act
January 8, 2016 | Appeals
The New Jersey Supreme Court has agreed to hear Allstate Ins. Co. v. Northfield Medical Center,1 which has consequences for insurers across the country seeking to deter insurance fraud schemes intended to avoid the prohibition on the corporate practice of medicine. The issue before the court is whether a health-care lawyer (who was not admitted …
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Sentencing and Restitution Awards in Insurance Fraud Cases
November 6, 2015 | Appeals
As this column regularly observes, insurance companies frequently use civil litigation as a tool to fight insurance fraud,1 including fraud involving life insurance policies.2 Insurance fraud, of course, also is a crime,3 and prosecutors often bring criminal actions against those who commit insurance fraud. Generally speaking, a person convicted of insurance fraud faces a potential …
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Denying Coverage Where Fraud Occurred
September 4, 2015
More than 30 years ago, in 1984, a divided New York Court of Appeals decided in Barker v. Kallash that a person who committed an illegal act of a serious nature should not be able to profit from that wrongdoing.1 By 1997, the court, in Manning v. Brown, seemed to have no doubt about this …
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Dissenting Opinions Highlight Split Among Exiting Judges
August 24, 2015
The Court of Appeals issued seven principal insurance law decisions this past term.1 Four decisions affirmed the rulings below, two reversed, and one modified. Five were in favor of insurance companies and two in favor of policyholders. Two of the seven were unanimous, one was decided by a vote of four-to-one, and four had at …
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Court of Appeals Continues To Extend No-Fault ‘Preclusion’ Rule
July 2, 2015
A decision issued by the New York Court of Appeals early in June extends application of the court-created “preclusion” rule in no-fault insurance cases, which provides that an insurer’s failure to timely pay or deny a claim results in an insurer being precluded from interposing a defense against payment of the claim, except where the …
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When Licensed Professionals Commit Insurance Fraud
May 1, 2015
Insurance fraud is committed not only by people who set fire to their homes for the insurance money or who lie about “missing” property that was in their “stolen” cars. Doctors and lawyers?licensed professionals?also commit insurance fraud. They risk the usual penalties, including potential jail time, as well as the loss of their ability to …
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Challenging Fraud by Employers in Workers’ Compensation
March 6, 2015 | Appeals | Insurance Coverage
Workers’ Compensation insurance carriers face a variety of employer schemes intended to defraud them out of insurance premiums in one way or another. After briefly discussing the requirements of New York’s Workers’ Compensation Law (WCL), this column explores some of the methods disreputable companies sometimes use to avoid their obligations. It concludes with a discussion …
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N.J. Supreme Court to Decide Breadth of Insurance Fraud Act
January 11, 2015 | Appeals | Commercial Litigation | Insurance Coverage | Insurance Fraud
The New Jersey Supreme Court has agreed to hear Allstate Ins. Co. v. Northfield Medical Center,1 which has consequences for insurers across the country seeking to deter insurance fraud schemes intended to avoid the prohibition on the corporate practice of medicine. The issue before the court is whether a health-care lawyer (who was not admitted …
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ERISA and Insurer Fraud Suits Against Health Care Providers
January 5, 2015 | Appeals | Insurance Coverage
One of the significant legal issues facing an insurance company that brings a  federal lawsuit to recover allegedly improper payments that it has made to a  health care provider under an employee benefit plan is whether the carrier’s  complaint is preempted by the federal Employee Retirement Income Security Act of  1974 (ERISA). A finding of …
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Opinions by Graffeo and Smith Highlight Insurance Law Developments
November 30, 2014 | Insurance Coverage
It is not often that two judges on the New York Court of Appeals leave the  court at the same time, as is occurring now with Judge Victoria A. Graffeo  (whose 14-year term is coming to a close) and Judge Robert S. Smith (who has  reached the retirement age of 70). Both judges have made …
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State Legislatures Tackle Insurance Fraud
November 7, 2014 | Appeals | Insurance Coverage
In an effort to combat insurance fraud, state legislatures across the country have passed a wide variety of bills this year that their governors have signed into law. While many other bills failed to make it to a governor’s desk for one reason or another, some that have been introduced may yet become law. Despite …
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Second Circuit Seeks Guidance On NYC Regulation of Law Firms
October 30, 2014 | Appeals
Max Gershenoff is quoted in a Bloomberg BNA Banking Daily Bulletin article entitled, “Second Circuit Seeks Guidance On NYC Regulation of Law Firms.”  The law firms referred to in the article were represented by Mr. Gershenoff, Evan Krinick and Michael Versichelli. Please click the link below to view the Article. Adobe Reader is required to view …
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Courts Permit Mallela Claims against “Article 28” Facilities
September 5, 2014 | Appeals | Insurance Coverage
It has been nearly a decade since the New York Court of Appeals ruled, in State Farm v. Mallela,[1] that a medical corporation was not entitled to be reimbursed by insurance companies under New York’s no-fault law and its implementing regulations[2] for medical services rendered by licensed medical practitioners where the medical corporation failed to …
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Among Significant Decisions, Court Vacates Prior Breach of Duty to Defend Ruling
August 25, 2014 | Appeals | Insurance Coverage
Insurance law is surely an area of the civil law that occupies more than its fair share of the docket of the New York Court of Appeals.  This past term, the Court issued nine significant insurance law decisions, including one for which it heard reargument and vacated a unanimous – and highly controversial – ruling …
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Arbitration or Litigation of No-Fault Insurance Disputes: The Second Circuit Speaks
July 7, 2014 | Appeals | Insurance Coverage
Insurance companies in New York continue to expend considerable time and effort to fight no-fault automobile insurance fraud. Toward that end, one of the most effective tools is the filing of lawsuits in federal court against health care providers who have received payment for services they contend they have provided to injured policyholders. As has …
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Grand Jury Recommends Four Steps to Cut Workers’ Comp Fraud
May 2, 2014 | Insurance Coverage | Appeals
Employers, employees, taxpayers, and insurance carriers all are heavily burdened by the costs of Worker’s Compensation insurance fraud in New York and in the rest of the tri-state area. As just one example, consider what Charles Kelcy Pegler Sr. admitted to in a guilty plea entered just days ago in a New Jersey state court. …
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Restitution to Insurance Carriers: The New York Rule
March 7, 2014 | Insurance Coverage | Appeals
Several years ago, police investigators in California found a number of stolen vehicles, including some that were being dismantled, on Julio Valdes’ property.  He later pled no contest to owning and operating a chop shop and was sentenced to two years and four months in prison. The trial court then set a victim restitution hearing. …
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Cases Across the Country: Small, Big, and In Between
January 3, 2014 | Appeals | Insurance Coverage
The legal issues governing insurance fraud that are discussed in this column typically focus on New York law or on federal law and its application to New York cases. The world of insurance fraud is quite extensive, however, as illustrated by recent insurance frauds alleged or uncovered from across the country – including some unusual, …
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The Case for Allowing Insurers to Recover Attorneys’ Fees in Fraud Suits
November 1, 2013 | Appeals | Insurance Coverage
AMERICAN BAR ASSOCIATION – MASS TORTS & DEVELOPMENTS After an employee of Glasbern Inc. was injured, the company’s Workers’ Compensation insurer, Zenith Insurance Company, began paying Workers’ Compensation benefits to him. Thereafter, Zenith sued Glasbern, Glasbern’s owner, Albert Granger, and its insurance broker, alleging that it only had issued and renewed the policy as a …
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Growing Role of Discovery in Providers’ Cases Seeking No-Fault Benefits
September 6, 2013 | Appeals | Insurance Coverage
In recent years, more and more no-fault[1] insurance carriers and health care providers have become parties to an escalating battle over providers’ requests to obtain payment from no-fault insurers for care the providers allegedly provided to injured people (so-called “assigned first-party no-fault benefits”). At the heart of the dispute is State Farm Mutual Automobile Ins. …
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Breach of Duty to Defend Stands Out Among Noteworthy Issues
August 26, 2013 | Appeals | Insurance Coverage
The past term’s significant insurance law decisions by the New York Court of Appeals resolved a variety of issues that will alter the practice of insurance law in important ways. Among the most notable of these decisions was K2 Investment Group, LLC v. American Guarantee & Liability Ins. Co.,[1] where the court evaluated the consequences to …
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Statute and Common Law Provide Immunity for Insurers Reporting Fraud
July 5, 2013 | Insurance Coverage | Appeals
After a fire damaged a house in Wilson, North Carolina, that was owned by Cully’s Motorcross Park, Inc., its president and sole stockholder, Laurie Volpe, submitted a claim to North Carolina Farm Bureau Mutual Insurance Company, the insurer for Cully’s. Farm Bureau began an investigation and ultimately denied the claim, citing its suspicion that the …
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Court Validates Another Tool for Insurers in Fight against No-Fault Fraud
May 3, 2013 | Appeals | Insurance Coverage
Over a decade ago, in an effort to reduce no-fault insurance fraud involving the improper ownership or licensing of medical providers, the New York State Insurance Department (the precursor to the New York State Department of Financial Services (“DFS”)), adopted a regulation that declared that a health care services provider was eligible for reimbursement from …
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Proposed Legislation Would Help Fight No-Fault Insurance Fraud
March 1, 2013 | Appeals | Insurance Coverage
No-fault insurance fraud continues to plague New York, with estimates of its cost to consumers and insurance carriers reaching hundreds of millions of dollars.[1] The growing wave of fraud persists notwithstanding efforts by federal and state prosecutors to bring criminal actions seeking to punish alleged fraud[2] – and despite guilty pleas in some of these actions.[3]  …
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Regulation Barring Health Care Providers From No-Fault Program
November 2, 2012 | Appeals | Insurance Coverage
The Superintendent of the New York Department of Financial Services, Benjamin Lawsky, has issued an emergency regulation that may make it easier to bar health care providers ? temporarily and permanently ? who are suspected of engaging in no-fault insurance fraud from demanding payments from insurance carriers for services they claim to have provided. If …
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From Common to Convoluted, Cases Demonstrate Range of Fraud
September 6, 2012 | Appeals | Insurance Coverage
This column typically focuses on insurance fraud trends, developments, and cases from New York.  Insurance fraud, however, goes well beyond this geographical area, and sometimes involves unusual, even bizarre, facts.  Locally, Nassau County District Attorney Kathleen Rice recently brought charges against Raymond Rother for allegedly conspiring with his son to fake his own drowning death …
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Unanimity, for the Most Part, In Broad Variety of Insurance Rulings
August 27, 2012 | Insurance Coverage | Appeals
The past term’s insurance law decisions by the Court of Appeals generally did not involve the rather traditional slew of insurance coverage, insurance bad faith, and insurance fraud rulings that usually comprise the Court’s insurance law docket. The opinions, however, are by no means any less significant, or less interesting. Mostly rendered by a unanimous …
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ERISA Preemption Rejected in Insurers’ Claims against Health Care Providers
July 6, 2012 | Insurance Coverage | Appeals
Insurance carriers that provide health care coverage in New York (and in other states) typically have developed comprehensive anti-fraud plans that help them identify and investigate insurance fraud. An important tool in these anti-fraud plans is post-payment reviews of claims submitted by health care providers. When insurance carriers detect fraud, and when they are unable …
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Anatomy of Massive No-Fault Insurance Fraud Alleged by Government
May 4, 2012 | Appeals | Insurance Coverage
As has been highlighted in this column on a number of occasions,[1] insurance fraud in connection with New York’s no-fault automobile insurance law[2] is a tremendously large problem that affects both automobile insurance companies and policyholders, leading to millions of dollars in losses and increased premiums. In an effort to combat no-fault insurance fraud, insurance …
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Courts Weigh Arbitration of No-Fault Claims
March 2, 2012 | Appeals | Insurance Coverage
More and more automobile insurance companies seek to combat no-fault insurance fraud by suing health care providers and others for fraudulently obtaining or seeking to obtain benefits[1] under New York’s no-fault law.[2] These lawsuits often combine claims to recover monies paid to the providers with a declaratory judgment action as to claims denied and/or not yet …
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The Power of Policy Rescission as a Tool to Combat Fraud
January 6, 2012 | Appeals | Insurance Coverage
Rescission of an insurance policy based on a policyholder’s material misrepresentations during the application process is one of the most potent weapons that an insurance company has to combat insurance fraud. A proper rescission not only results in a denial of a particular claim, but voids the policy.  On a national basis, insurance companies’ interest …
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Are Statutory Changes To No-Fault Law on the Horizon?
November 4, 2011 | Appeals | Insurance Coverage
As this column has frequently observed, insurance fraud in the no-fault arena often leads to litigation and court decisions in both civil suits and criminal cases. Those judicial opinions, to one extent or another, affect the ability of insurance companies to combat fraud by challenging no-fault claims they believe are fraudulent as well as the …
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Should Premiums Be Returned When Policies Are Obtained by Fraud?
September 2, 2011 | Appeals | Insurance Coverage
In 2004, the American Institute of Certified Public Accountants (“AICPA”) and Prudential Insurance Company of America entered into a group insurance contract through which AICPA members could obtain life insurance on the lives of their dependents. Pursuant to this arrangement, an application was filed with Prudential in the spring of 2004 for life insurance on …
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Decisions Reflect Significance Of Insurance Law Across New York
August 22, 2011 | Appeals | Insurance Coverage
The New York Court of Appeals’ nine significant insurance law rulings last term displayed no discernible theme, evidenced no apparent trend, and reflected no obvious insurance law philosophy. Policyholders were victorious in some of the cases and insurance companies in others – and creditors in another. The principal cases involved statutory construction, [1] policy construction, …
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Wave of Civil Claims Being Asserted by Insurers Against Alleged Fraud
July 1, 2011 | Appeals | Insurance Coverage
Insurance fraud is not just a New York problem, it is a national problem. While this column generally focuses on trends in New York, it can be helpful on occasion to review conduct from across the country. Such a national review reveals that insurance carriers are taking an aggressive stance against insurance fraud and are …
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Criminal and Administrative Insurance Fraud Cases in the Courts
May 6, 2011 | Appeals | Insurance Coverage
State and federal courts in New York have recently issued a number of significant decisions in cases involving allegations of insurance fraud in the criminal and administrative arenas. The results were decidedly mixed for the government.[1] However, the fact that there have been so many important cases in the courts, together with at least one …
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“Prior Knowledge” Exclusion, Law Firm Coverage and Client Fraud
March 4, 2011 | Appeals | Insurance Coverage
Issues of fraud arise in numerous contexts in the insurance industry.  Not only are questions of fraud often relevant to determining the validity of claims, they also arise in determining if a claim was timely disclosed at the inception of the insuring relationship.  Professional liability insurance policies purchased by lawyers and other professionals typically contain …
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Update on Key Issues From 2010
January 7, 2011 | Insurance Coverage | Appeals
The beginning of the new year seems an appropriate time to update some of the insurance fraud issues discussed in this column over the past year. As noted here last January, the Court of Appeals decision in State Farm Mutual Auto. Ins. Co. v. Mallela established that a violation of a licensing requirement by a …
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Court Dismisses Class Action Challenging Automobile Insurer’s Specification of ‘Non-OEM’ Crash Parts In Repair Estimates
December 31, 2010 | Appeals | Insurance Coverage
Patchen v. Government Employees Insurance Company, U.S. District Court, Eastern District of New York On January 7, 2011, United States District Court Judge Arthur Spatt granted GEICO’s motion to dismiss plaintiffs’ Complaint. Rivkin Radler attorneys Evan H. Krinick, Michael P. Versichelli and Michael P. Welch represented GEICO. The case presented an important issue that has …
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Fraud Claims Over Stranger-Originated Life Insurance Hit the Courts
November 5, 2010 | Insurance Coverage | Appeals
Stranger-originated life insurance (“STOLI”) policies have emerged in large numbers over the last decade and now comprise a growing segment of the insurance market. In a typical STOLI arrangement, speculators collaborate with an individual to obtain a life insurance policy in the name of that individual, and then sell some or all of the death …
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It’s Time to End the 30-Day Preclusion Rule
September 3, 2010 | Appeals | Insurance Coverage
Several weeks ago, New York County Civil Court Judge Arthur F. Engoron issued a decision in Quality Psychological Services PC v. GEICO Ins. Co.,[1] a case involving multiple actions filed by a medical provider seeking payment of bills it had sent to an insurance carrier for psychological services allegedly rendered to the plaintiff’s assignors, who …
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Government, Private Parties Focus on Stopping Health Care Fraud
July 2, 2010 | Appeals | Insurance Coverage
In mid-June, the U.S. Attorney for the Eastern District of New York, Loretta E. Lynch, announced four separate indictments charging 17 individuals for their participation in an alleged health care fraud scheme. In addition, federal agents searched offices of 12 durable medical equipment retail companies located in South Brooklyn that were operated by the defendants …
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Legislative And Regulatory Changes To Combat Rise In No-Fault Fraud
May 7, 2010 | Appeals | Insurance Coverage
Insurance fraud continues to increase in New York,[1] and one area that is growing with particular vigor is no-fault insurance fraud. In response to the rise in no-fault fraud, the state Legislature is considering new legislation, and the New York State Department of Insurance is actively engaged in potentially substantial modifications to the regulations that …
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Fierce Litigation Battles Over Range of ‘Mallela’ Issues
March 5, 2010 | Appeals | Employment & Labor | Insurance Coverage
In State Farm Mutual Auto. Ins. Co. v. Mallela,[1] the New York Court of Appeals held that an insurer may withhold payment for medical services provided by “fraudulently incorporated” enterprises to which patients had assigned their no fault claims. As indicated in the Insurance Fraud column published here in January,[2] that ruling (in which the …
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Five Years Later, Issues From Mallela Continue To Be Litigated
January 8, 2010 | Appeals
It has been almost exactly five years since the New York Court of Appeals issued its decision in State Farm Mutual Auto. Ins. Co. v. Mallela,[1] establishing that a violation of a licensing requirement by a medical provider renders the provider ineligible to be reimbursed by an insurance company for no fault[2] claims that have …
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