NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5204
SPONSOR: Titone TITLE OF BILL: An act to amend the insurance law, in relation to
examination under oath of covered persons pursuant to the comprehensive
motor vehicle insurance reparations act
PURPOSE OR GENERAL IDEA OF BILL: To provide fairness, guidance, clari-
ty and consistency in the application of the standards for Examinations
Under Oath, and to more equitably administer claims for first party
benefits
SUMMARY OF PROVISIONS OF BILL:
Section 1 would amend section 5103 of the Insurance Law to require the
following: The Examination Under Oath OF THE APPLICANT shall be sched-
uled by the company directly or by an attorney appointed by the company
for purposes of conducting the Examination Under Oath for whose conduct
and activity the company is directly responsible. The Examination Under
Oath OF THE APPLICANT may not be demanded unless and until an applica-
tion for no-fault benefits has been received by the company. In any
Examination. Under Oath, the (claimant) APPLICANT shall have the right
to be represented by counsel. The examination shall be conducted upon
oath or affirmation. The Examination Under Oath shall be conducted in
the county where the (claimant) APPLICANT resides or, at the (claim-
ant's) APPLICANT'S option, in the office of his/ HER representative
unless the (claimant or claimant's) APPLICANT OR APPLICANT'S represen-
tative and the company agree otherwise. The day and time that the Exam-
ination Under Oath is scheduled must be agreed upon by the company and
the (claimant or claimant's) APPLICANT OR APPLICANT'S representative. A
demand for an Examination under Oath shall be in writing and shall be
served personally or by registered or certified mail upon the (claimant)
APPLICANT unless the (claimant) APPLICANT is represented by an attorney,
when it shall be served personally or by mail upon his/HER attorney. The
demand shall state the person before whom the examination is to be held,
the time, place and subject matter thereof. Written notice of the Exam-
ination Under Oath must be received by the (claimant) APPLICANT or
HIS/HER representative at least 14 days prior to the examination date to
be effective to require claimant to appear. The notice shall advise the
(claimant) APPLICANT of the right to video or otherwise record the exam-
ination. The (claimant) APPLICANT shall be allowed reasonable adjourn-
ments which shall be accepted up to no less than 24 hours prior to the
examination. If the claimant to be examined does not understand the
English language, upon reasonable notice to the company seeking the
examination, the company must, at their own expense, provide a trans-
lation of all questions and answers, and may use the services of an
interpreter whose Compensation shall be paid by the company seeking the
examination. The Examination Under Oath must be transcribed before a
notary public duly licensed to administer oaths in the State of New
York. Any Examination Under Oath that is not so transcribed may not be
cited as the basis of any denial of a claim for first party benefits.
The transcript of the examination shall not be subject to or available
for public inspection, except upon court order upon good cause shown,
but shall be furnished to the (claimant) APPLICANT or HIS/HER represen-
tative within 60 days of the examination. The conduct of Examinations
Under Oath shall be governed by the Uniform Rules For The Conduct Of
Depositions, Part 221 of the Uniform Rules for the New York State Trial
Courts.
An Examination Under Oath of the (claimant) APPLICANT may be requested
where (1) The company suspects fraud perpetrated by the (claimant)
APPLICANT which must be clearly conveyed to the (claimant or claimant's)
APPLICANT OR APPLICANT'S representative. The company must supply the
(claimant or claimant's) APPLICANT OR APPLICANT'S representative with
any and all evidence supporting their claim of fraud so as to preserve
claimant's 5th amendment right against being compelled to testify
against himself. (2) The company suspects that (claimant) APPLICANT is
receiving unnecessary treatment which must be clearly conveyed to the
(claimant or claimant's) APPLICANT OR APPLICANT'S representative. The
company must supply the (claimant or claimant's) APPLICANT OR APPLI-
CANT'S representative with any and all evidence supporting their claim
that the treatment is unnecessary including but not limited, to peer
reviews. (3) The company suspects that the treating provider or facility
is billing for treatment that (claimant) APPLICANT is not receiving
which must be clearly conveyed to the (claimant or claimant's) APPLICANT
OR APPLICANT'S representative. The company must provide (claimant or
claimant's) APPLICANT OR APPLICANT'S representative with any and all
evidence supporting their claim that the billing is not commensurate
with the actual treatment received, including but not limited to, the
bills submitted by the treating provider. (4) The company has a suspi-
cion that the claim needs to be verified for a reason not enumerated
above. The justification must be relevant to the verification of the
claim and the reason must be clearly conveyed to the (claimant or claim-
ant's) APPLICANT OR APPLICANT'S representative. The company must provide
supporting evidence to support their claim to (claimant or claimant's)
APPLICANT OR APPLICANT'S representative. (5) If the (claimant or claim-
ant's) APPLICANT OR APPLICANT'S representative wishes to contest the
request for an Examination Under Oath because (claimant or claimant's)
APPLICANT OR APPLICANT'S representative believes the request to be pre-
textural or suspects abuse in requesting the examination, they may
submit the same to the State Insurance Department for review within 5
business days of receipt of the written request from the company. (6)
The company may not deny an APPLICANT'S claim based upon a treating
provider's failure to appear at an Examination Under Oath. If the
treating provider fails to appear at an Examination Under Oath, the
(claimant may) APPLICANT SHALL not be held responsible to the provider
for services rendered by that provider. (7) When the company requires an
Examination Under Oath of an applicant to establish proof of claim, such
requirement must be based on the application of objective standards so
that there is specific justification for the use of such examination.
Insurer standards shall be available for review by department examiners,
as well as by the claimant and his representative.
The scope of the Examination Under Oath will be narrowly tailored to the
reasons or justification for seeking the examination as set forth in the
company's written request. Any question that goes beyond the scope may
be objected to and such objected to question may be submitted by the
company within 7 days of the completion of the scheduled and conducted
examination to the (State Insurance Department) NEW YORK STATE DEPART-
MENT OF FINANCIAL SERVICES to determine if the objected to question is
beyond the scope of the examination. If any question is determined to be
beyond the legitimate scope of the examination and its original written
justification for the same, the (claimant) APPLICANT will not be
required to respond to the question and cannot form the basis of a
denial. If the objected to question is determined by the (State Insur-
ance Department) DEPT OF FIN SERVICES to be legitimate and narrowly
tailored to meet the objectives contained in the written request for the
Examination Under Oath initially given by the company when the examina-
tion was scheduled, the examination may be rescheduled in the manner set
forth above for the limited purpose of receiving responses to the
improperly objected to questions, as determined by the (State Insurance
Department) DEPT OF FIN SERVICES, and responses to other questions that
might naturally flow from (claimant's) APPLICANT'S responses that are
likewise narrowly tailored to investigate the legitimate justification
for conducting the examination given in the company's original written
request, with the same rules for objections applying as set forth above.
The company may not deny a claim based upon an objection at an Examina-
tion Under Oath unless the company completes the above objection appeals
procedure, wins said appeal, and the claimant thereafter fails to comply
with the demand for a further examination under oath. The Examination
Under Oath shall not exceed 3 hours from the time the first question is
asked until the last question is asked unless reasonable cause exists.
For examinations conducted with the aid of an interpreter, the time
shall not exceed 4 hours unless reasonable cause exists. The (claimant
or claimant's) APPLICANT OR APPLICANT'S representative shall have the
right to terminate the examination upon the passage of the above time
limits. The claim may not be denied if the (claimant or claimant's)
APPLICANT OR APPLICANT'S representative terminates the examination after
the allotted time has expired. Issues of liability related to any ongo-
ing or potential third party action arising from the subject claim may
be addressed at the Examination Under Oath. The Examination Under Oath
and any investigation related thereto is confidential and shall not be
subject to discovery or use in any third party action arising out of the
incident that serves as the basis of the claim for first party benefits,
and may not be used against the claimant in any such third party action.
Absent an admission of fraud by (claimant) APPLICANT during the Examina-
tion Under Oath, or allegation of fraud perpetrated by the (claimant)
APPLICANT Supported by the testimony elicited at the examination, the
Examination Under Oath alone shall not form the basis of a denial of
first party benefits. Any denial of first party benefits based in part
upon the Examination Under Oath, including one based on fraud by the
claimant, shall he accompanied by any other written reports, including
investigative, that in whole or in part form the basis of the denial.
The claimant and his representative will have the right to conduct an
Examination Under Oath, upon written request to the company, of any
individual, including the person or attorney conducting or reviewing the
examination, whose reports or opinions form the basis of any denial of
first party benefits based in whole or in part on the examination. Once
an insurer has denied further first party benefits to the claimant for
any reason, they are barred from seeking any further verification of the
claim including, but not limited to, conducting medical examinations
and/or further Examinations Under Oath. The denial of a claim for fail-
ure to attend an Examination Under Oath shall not be retroactive to the
date of the claim, but shall only result in, the denial of all benefits
received after the date of the Examination Under Oath.
JUSTIFICATION: An Examination Under Oath is intended to verify treat-
ment based on objective standards. The No-Fault Mandatory Personal Inju-
ry Protection Endorsement set forth in 11 NYCRR 65-1.1 (d).contains the
provision that "(u)pon request by the Company, the eligible injured
person or that person's assignee or representative shall:... (b) as may
reasonably be required submit to examinations under oath by any person
named by the Company and subscribe the same". Section 65-3.5(e) states
that 11 (w)hen an insurer requires an examination under oath of an
applicant to establish proof of claim, such requirement must be based
upon the application of objective standards so that there is specific
objective justification supporting the use of such examination". Section
653.2 includes the following claim practice principles for all insurers
providing first party benefits: (a) Have as your basic goal the prompt
and fair payment to all automobile accident victims; (b) Assist the
applicant in the processing of a claim. Do not treat the applicant as an
adversary; (c) Do not demand verification of facts unless there are good
reasons to do so; (d) When verification of facts is necessary, it should
be done as expeditiously as possible; (e) Clearly inform the applicant
of the insurer's position regarding any disputed matter; (f) Respond
promptly, when a response is indicated, to all communications from
insureds, applicants, attorneys and any other interested persons.
Unfortunately, due to the lack of any standards governing Examinations
Under Oath, insurers providing first party benefits are permitted to
conduct intrusive cross examinations of claimants and the documentation
submitted in support of their claims. The amendments proposed by this
Bill would clarify the rules for an Examination Under Oath, ensure the
equality of standing between claimants and insurers, and promote the
claim practice principles expected of all insurers providing first party
benefits, including the prompt and fair payment of claims.
LEGISLATIVE HISTORY:
(2011-2012) A.10268 - Referred to Insurance
(2013-14)
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.
EFFECTIVE DATE: This act shall take effect immediately and shall be
applicable to: (i) all claims made on or after the effective date of
this act; and (ii) all claims made prior to the effective date of this
act and pending on the effective date of this act.
