New York Senate Bill S09135

New York 2025-2026 Regular Session

• Introduced: 2/5/26
• Refer: 2/5/26

Caption

Enacts the "fraudulent claims reduction and unlawful deception act" or "FRAUD act"; establishes the crimes of staging a construction site accident for insurance fraud and auto insurance fraud involving staged collisions and fabricated claims; provides for enhanced penalties and enforcement for construction site and auto claims fraud.

Impact

The enactment of S09135 is intended to foster a more transparent and accountable insurance system by establishing enhanced criminal penalties for those convicted of insurance fraud. This includes mandatory restitution to insurers for amounts paid due to fraudulent claims, civil penalties, and possible exclusion from state-regulated insurance benefits for individuals found guilty. By targeting the root causes of insurance fraud, the bill aims to mitigate the financial burden on both insurance providers and policyholders, which could potentially reduce overall insurance premiums for consumers.

Summary

Bill S09135, also referred to as the 'Fraudulent Claims Reduction and Unlawful Deception Act,' aims to amend the penal and insurance laws in New York to address the significant issue of fraudulent insurance claims. The legislation focuses specifically on fraudulent activities such as staging construction site accidents and creating fake auto insurance claims. By outlining these offenses as criminal actions with set penalties, the bill seeks to provide a clearer legal framework for prosecution and prevention of such frauds, which have been increasing in recent years and contribute to rising insurance costs across the state.

Contention

While the primary goal of S09135 is to reduce fraudulent claims and thereby lower insurance costs, concerns have been raised regarding its implementation. Critics argue that the bill may inadvertently create hurdles for legitimate claimants who could be unfairly scrutinized under stricter enforcement protocols. Additionally, there is apprehension about the adequacy of resources allocated for enforcement and whether such measures would sufficiently deter fraud without penalizing honest individuals or construction workers who may face heightened scrutiny as a result of this legislation.