State Bills Highlight Concern About Insurance Fraud, Anti-Fraud Group Says

Anti-fraud reforms recently passed in Tennessee, Florida and Nevada are a signal that insurance fraud is becoming a top-tier crime around the country, according to the Coalition Against Insurance Fraud, a national organization dedicated to fighting insurance fraud through public advocacy and public education.

Although the Texas legislature did not pass major anti-insurance fraud legislation during this 2001 session, it did approve House Bill (HB) 186, which expands the insurance fraud investigative powers of the police officers, fire chiefs and fire marshals. The bill, goes into effect September 1.

Calling insurance fraud “one of America’s largest criminal ind-ustries,” the organization estimated that insurance fraud costs Americans at least $80 billion a year, or nearly $950 for each family.

According to the group, Tennessee’s legislature adopted one of the toughest insurance anti-fraud reform packages in the U.S. this year, one that is based largely on a model law developed by the Coalition. Fraud reform legislation in Tennessee includes stiff criminal penalties for insurance fraud and makes it a crime to even attempt insurance fraud. The new laws enable insurers to recover stolen money more easily and create strict license review of medical providers and other professionals convicted of insurance fraud. Also, the legislation re-quires insurers to adopt fraud plans and place anti-fraud warnings on claim and application forms.

Reforms in Florida concentrate on auto insurance to stifle rapidly rising PIP fraud, the Coalition said. Newly enacted laws crack down on runners and renegade medical clinics, and create fee schedules for certain medical procedures. In Nevada, the state increased funding for the nearly insolvent fraud bureau, gave the insurance department more anti-fraud money, and made it easier for insurers to recover money from fraudulent claims.

Under current Texas law, fire marshals, fire chiefs, and police officers are authorized to request insurance companies to release certain information regarding a fire loss of $1,000 or more as a means to investigate possible insurance fraud. H.B. 186 expands that investigative authority to the investigation of possible insurance fraud in cases of burglary, robbery, and death claims.

According to Texas Department of Insurance (TDI), the most recent significant addition to TDI’s fraud enforcement authority came with passage of HB 1487, which became effective in September 1995. Among other things, that bill: authorized the Commissioner of Insurance to commission eligible fraud investigators as peace officers; removed the requirement that a pattern of fraud be established before TDI could investigate alleged consumer and provider fraud cases; defined insurance claim fraud in greater detail; and provided criminal penalties, ranging from a Class C misdemeanor to a first degree felony, for insurance claim fraud.

Of the reforms enacted in Tennessee, Florida, Nevada and other states, Dennis Jay, executive director of the Coalition, said, “These new reforms reflect growing public intolerance of rising insurance fraud in many states.”

Topics Florida Texas Fraud Legislation Tennessee Nevada