The New York State Department of Financial Services has issued guidance to implement auto insurance reforms enacted in New York's Fiscal Year 2027 Budget, with the stated aim of reducing premiums and curbing fraudulent claims. The guidance tells all insurers authorized to write motor vehicle insurance in the state to update their pricing models and incorporate the expected savings from the reforms into all pending and future rate filings. The reforms addressed in the guidance target several cost drivers. They expand the definition of a fraudulent insurance act so prosecutors can pursue criminal penalties against people who organize or facilitate staged accidents, not only the driver. They also cap damages for drivers engaged in criminal conduct at the time of an accident, including uninsured motorists, drunk drivers and drivers committing a felony, tighten the serious injury threshold so pain and suffering or emotional distress damages require an objectively demonstrated serious injury, and limit claims by drivers found to be primarily responsible for an accident. In addition, upward rate changes are now subject to new limits requiring insurers to obtain express prior approval from the department. DFS-regulated insurers are expected to review the guidance and determine the steps needed to comply, including reflecting the anticipated savings in pending and future auto insurance rate filings.
New York State Department of Financial Services2026-07-01
New York State Department of Financial Services directs auto insurers to reflect Fiscal Year 2027 reform savings in rate filings
The New York State Department of Financial Services has issued guidance requiring motor vehicle insurers to incorporate expected savings from New York's Fiscal Year 2027 auto insurance reforms into pending and future rate filings. The reforms target fraud and litigation costs by expanding liability for staged accidents, tightening injury and damages standards, and requiring express prior approval for upward rate changes.