His group predicted the spousal liability bill "will only incite more fraud and litigation, driving auto insurance rates higher and making affordable coverage more difficult to obtain."

Democratic Assemblywoman Helen Weinstein, a Brooklyn attorney who heads the Standing Committee on Judiciary, sponsored the spousal liability bill, A10456.

Under its provisions, insurers must let married couples know about the limitations to what they can collect under New York's no-fault insurance law when their spouse's actions behind the wheel result in injuries and the insurers must offer them supplemental spousal liability insurance.

Mr. Bourdeau said that up to now it has been legal for insurers to offer the insurance, but companies would not sell it because of their fears of collusion.

By way of example, he said that if a wife sues her husband to recover for injuries after an accident, claiming he violated the speed limit, the husband would have not inclination to fight the claim because "they are not adversarial parties."

A statement with the bill said it was introduced at the request of the New York State Law Revision Commission. It noted that an appeals court decision, which upheld the law exempting spousal liability, had called on the legislature to reconsider the spousal liability exemption calling it "anachronistic."

Also noted was a mention by the Commission that a former common law rule, which prevented suits between other family members based on the issue of collusion, had been rejected by the state's highest court.

The statement with the bill noted that a premium would offset the cost and exposure.

Mr. Bourdeau said the measure was co-sponsored by Republican Sen. James Seward of Oneonta and "came up as a complete surprise as the Senate was leaving town last Tuesday on recess," leaving his group with no time to stage a strong lobbying effort against it.

He said the message he got when he argued against it was "the leadership [Senate Leader Joseph L. Bruno, R-Saratoga Springs] wants it."

Mr. Bourdeau said he could only speculate what might be involved, but he agreed that the approaching election for the entire legislature and Republican Gov. George Pataki could be a factor.

Neither Sen. Seward nor Assemblywoman Weinstein responded to requests for comment.

Mr. Bourdeau said New York, under no-fault, is the auto "insurance fraud capital of the country" and if Gov. Pataki signs the bill "we're making it worse."

"The state's auto insurance system is being looted today by bogus and inflated claims, phony medical mills and unscrupulous attorneys," he said. "The new law will only give professional criminals another scam to rip-off honest policyholders and their insurers."

Mr. Bourdeau pointed out that the legislature failed to enact anti-fraud proposals to stiffen the penalties for fraud, shorten deadlines for submitting bills to insurers, establish needed guidelines for treatment and decertify medical professionals convicted of insurance fraud.

"These measures would have helped level the playing field between auto insurers and law enforcement on the one hand and perpetrators of staged accidents and operators of medical mills on the other," he said. "By not closing loopholes in our current no-fault system the losses of auto insurers will continue to mount and rates will continue to rise."

Mr. Bourdeau said the legislature also did not act to extend measures designed to help companies better manage their business and price their products more competitively.

These measures allow auto insurers to raise rates modestly to keep up with the rising costs of medical care and auto repair without regulatory approval and drop a small percentage of their customers, often for failure to pay premiums or suspected fraud.

"These provisions give insurers the freedom to price their products competitively," said Mr. Bourdeau. "More competition in the marketplace means more choice for consumers and lower prices."

He said by permitting insurers to cancel up to two percent of their customers without regulatory approval, they can quickly drop policyholders who have filed fraudulent claims. Without the "two percent rule," auto insurers may have to carry suspected insurance criminals on their books, he complained.

The New York Insurance Association is a trade association of property-casualty insurance companies that provide insurance coverage for autos, homes and businesses throughout New York State.