The news will likely not surprise insurers, which have repeatedly pointed to loopholes in the state's no-fault auto insurance law that allow medical professionals, attorneys and others to exploit the system.

Allstate filed its seventh auto fraud-related lawsuit in New York at the end of December. The company's suits seek $10.5 million in damages.

According to the New York Alliance Against Insurance Fraud, questionable liability claims involving excessive medical treatment surged 42 percent during the first six months of 2010. Many claims involved no-fault auto insurance claims submitted by medical mills.

State Superintendent of Insurance James Wrynn is currently proposing revisions to regulations regarding New York's no-fault law. The superintendent has said that the changes he has proposed would make it more difficult to commit fraud and abuse.

The IRC found that personal injury protection (PIP) claims payouts in the New York City area were twice that of claims payouts in the rest of the state. Health care providers charged insurers more than the state's fee schedule for their services in a majority of claims, the IRC said.

New York City area claimants are much more likely to visit multiple health care providers and seek treatment from chiropractors, physical therapists and acupuncturists than claimants elsewhere in the state.

Berkshire Hathaway Insurance Group is the largest writer of auto insurance in New York with about a 27 percent market share, followed by Allstate with 19.2 percent, State Farm with 12 percent, Progressive Group with 6.6 percent and Liberty Mutual Insurance Group with about 5 percent, according to Highline Data.

Highline Data is a part of Summit Business Media, which also owns National Underwriter.