The Alliance of American Insurers (AAI) applauded anti-fraud initiatives unveiled by New Jersey Gov. James McGreevey during the 5th Annual New Jersey Insurance Fraud Summit.
“The measures announced today by the governor are a good step forward in fighting the insurance fraud that steals virtually hundreds of dollars out of the pockets of every New Jersey resident,” said Richard Stokes, government affairs representative for the Alliance’s Northeast Region.
State statistics indicate that roughly 10 percent of every N.J. family’s insurance bill represents the cost of insurance fraud.
Stokes said, “The Alliance and its members have been active on the fraud-fighting front for many years, and we welcome the governor’s efforts to partner with us in identifying and prosecuting insurance cheats.”
Gov. McGreevey’s most important initiative, in the AAI’s view, is the push for a new law establishing the crime of insurance fraud. Stokes called the move “an unprecedented step in the fight against insurance fraud that places New Jersey in the forefront of the battle to provide prosecutors with the tools necessary to put insurance cheats away.”
Other initiatives include new rules to make it easier for insurers to cancel the policies of drivers who lie on insurance applications, as well as proposed legislation to expand the crimes that trigger automatic suspension of licenses of health care professionals and others who commit health insurance fraud. In addition, the governor announced a plan to create a counterfeit-proof auto insurance card.
“These initiatives dovetail nicely with fraud-fighting suggestions developed by the Alliance and others involved in an industry task force developing suggestions for the state’s Office of the Insurance Fraud Prosecutor,” Stokes said.
The AAI recommendations include devoting more staff to identifying medical mills in order to reduce the overutilization fraud that they generate, and improving insurer access to more detailed driver information regarding driving history, title information and registration information. The AAI also proposes making it harder for persons convicted of insurance fraud to obtain insurance in voluntary market, and making it easier for insurers to terminate policies when insurance fraud has been perpetrated.
“The Alliance believes that strong legislative language backed up by aggressive enforcement and stiff penalties are vital to the anti-fraud effort in New Jersey,” Stokes said. “Only when we get a handle on insurance fraud and enact several other key reform measures will we see this state begin to drop from its perennial spot in the top rankings of the National Association of Insurance Commissioner’s annual average auto premium list.”
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