Copyright held by The John Cooke Fraud Report. Reprint rights are granted with attribution to The John Cooke Fraud Report with a link to this website.
By Howard Goldblatt
Since it’s that time of year, when we start thinking of summer and the end of school, we thought we’d grade several states for their efforts to fight insurance fraud. The grades are keyed to whether the individual states have moved forward on an anti-fraud agenda. And, of course, they run the gamut from excellent to failure.
North Dakota – [A] By enacting a workers compensation fraud unit, the state demonstrated that it recognized insurance fraud doesn’t just affect the large urban states. This state also enacted a law prohibiting body shops from paying all or part of an insurance deductible or from paying a rebate in the amount of a deductible.
West Virginia – [B+] With little fanfare, the state enacted an immunity law that grants broad civil immunity for the reporting of suspected insurance fraud. The immunity language allows for the exchange of information between insurers.
Ohio [B] Legislation based on the recommendations of an insurance fraud task force has been introduced. However, as of publication date, no action has occurred on the bill.
Washington – [D] Two years after enacting a strong anti-fraud law, the legislature weakened the provisions requiring anti-fraud plans. Life and health insurers, originally covered under the law, are now exempt from the anti-fraud plan requirements.
Virginia – [F] After the state Senate unanimously approved legislation creating an insurance fraud bureau, the state House failed to move the bill prior to adjournment.
New Mexico – [F] We give the insurance department and legislature an “A” for effort as the department drafted a bill creating an insurance fraud bureau and the legislature passed the bill. However, the governor refused to follow and vetoed the bill.
Oregon – [Incomplete] Anti-fraud legislation is working its way through the legislature. The bill already has been passed by the Senate and is currently in the House Judiciary Committee. We’ll grade them when we see what finally occurs.
OTHER STATE ACTIVITY
Hawaii – The governor has been sent an automobile insurance reform bill, including anti-fraud provisions that will create an insurance fraud unit to investigate and prosecute insurance fraud. The bill, which is expected to be signed into law, also makes it a crime to commit insurance fraud and grants immunity for the reporting of suspected fraud.
Arizona – The legislature enacted a bill expanding the existing fraud law to make running and capping a crime. The legislation also would require the notification of license boards when a licensee is convicted of insurance fraud.
California – The legislature is moving on a bill that would sunset the state’s vehicle pre-insurance inspection law in 1999 unless there’s proof that the law is still effective. The bill passed the Assembly and is awaiting action by the Senate.
Colorado – The state is moving to strengthen its anti-fraud efforts with legislation that expands the authority of the state attorney general to prosecute insurance fraud cases.
Louisiana – The legislature is considering an anti-fraud bill that is a version of the coalition’s model fraud act. The bill, which broadly defines insurance fraud, requires restitution. It has strict penalties for practitioners who are convicted of insurance fraud and broad insurer-to-insurer immunity for the reporting of suspected fraud. It also requires insurers to develop anti-fraud plans.
Maine – The legislature is considering creating a study commission to investigate the extent of the insurance fraud problem in the state and what remedies may be used to resolve the problems.
New York – The Assembly passed a bill that restricts insurers’ ability to request certain personal and financial information from insureds as a standard practice in processing theft claims. The legislature also is considering a bill that would prohibit a reinsurer from rescinding a contract based on fraud once the insurer is subject to liquidation proceedings.
Maryland – A bill awaiting the governor’s signature would allow the court to accept as authentic a bill for goods and services without the testimony of the provider.
© Copyright 1997 Alikim Media