Attorney General Investigates Short Pays
The New York Attorney General office's currently is investigating
complaints filed by insureds in the state who were contacted to
pay the remainder of what was owed for auto glass work that resulted
in short payment by insurance companies, according to Mike Russo,
controller for Thru-Way Glass in Syracuse, N.Y. Russo and Scott
Owens of Excel Auto Glass in Lake Katrine, N.Y., met with assistant
attorney general James Morrissey in Buffalo, N.Y., last Tuesday,
about this issue, which originated from another glass shop in the
"I argued that the policyholder has the ultimate responsibility
in paying the short pay," Russo says. "We discussed differences
in health insurance versus auto insurance policies. I argued that
an auto insurance policy is different from a health insurance policy
in that it is an indemnification policy and has no disclosures as
to pricing caps, etc."
In addition, they discussed networks Morrissey.
"I told him that in the case of a health insurance policy, a policyholder
knows going in that there may be out-of-pocket expenses when [he]
use[s] an out-of-network provider," Russo adds. "I argued that if
a policyholder purchases a sub-par policy and his insurance company
does not fully indemnify [him], then [he is] responsible to the
In related news, in December the Minnesota Commissioner of Commerce
issued a Consent Order against AIG Personal Lines Claims for short
HERE for related story). The order noted that AIG and others
"paid an alleged 'prevailing rate' to Minnesota body shops that
was less than the total charged by the body shops for certain repair
costs." The Consent Order imposed a civil penalty of $20,000 and
a cease and desist order from any continued violations of Minn.
Stat. § 72A.201, subd. 6(2)(a) (2006), the statute the order cited
AIG violated. In addition, Minnesota Commissioner Glenn Wilson also
ordered AIG to reimburse all the insured and claimants referenced
in the order for their out-of-pocket expenses paid to the body shops.
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