Hanover Insurance Executive Elected Co-Chair of Anti-Fraud Coalition

December 12, 2011

Frank Sztuk of Hanover Insurance was elected co-chair of the Coalition Against Insurance Fraud at the public-interest group’s annual membership meeting last week.

Sztuk is Hanover’s National Special Investigation Unit (SIU) strategist and has chaired the Massachusetts fraud bureau. He will share Coalition leadership with incumbent co-chair Steve Perry, head of the D.C. Department of Insurance, Securities & Banking.

John Sargent, Manager-SIU of MetLife, serves as treasurer, and secretary is Ralph Burnham, executive director of the Pennsylvania Insurance Fraud Prevention Authority.

Elected to the executive committee were: Bill Newton, head of the Florida Consumer Action Network; James Doyle, vice president of investigations at Prudential Insurance; and Steve Rutzebeck, director of claims security at Geico. Elected to the board was Dominic Dugo, Office of San Diego County Attorney General.

The group also unveiled new anti-fraud research initiatives. Among the new initiatives are:

• Study of point-of-purchase fraud, especially via the Internet and telephone;

• Guide to anti-fraud technology used by insurers and government agencies;

• Benchmarking study of insurer anti-fraud efforts; and

• Study of state fraud bureau initiatives.

Curbing no-fault auto fraud in hard-hit states is a legislative priority for the Coalition. The Coalition said it will seek passage of no-fault reforms in Florida and New York. Staged crashes are rampant in those states, the group said, with bogus injury claims driving up premiums. Michigan is on the watch list of potential targeted no-fault states.

The Coalition also said protecting consumers from scams has been a longtime priority. The group will identify a key anti-fraud con that endangers large numbers of consumers, and launch an extended outreach campaign to alert the public.

And with social media a key avenue of communication for millions of Americans, the group will expand its active Facebook and Twitter efforts, and launch several YouTube videos.

Contractor fraud and stepped-up efforts by Medicare and Medicaid to thwart widespread bilking of the government programs were key discussion items in presentations by senior fraud investigators.

Shady contractors are a large problem around the U.S., said Phae Howard, executive director of the National Center for the Prevention of Home Improvement Fraud, in Atlanta.

Fraudulent insurance claims, illegal contracts, shoddy material and workmanship, cost over-runs and identity theft are among the schemes, Howard said. But accurate data are hard to find, in part because victims are too embarrassed to report scams to the police. Consumers can become their own quality-control managers by educating themselves how to avoid being fooled by cheating contractors, Howard urged.

Medicare and Medicaid are rapidly changing their pay-and-chase model to more assertive fraud prevention and detection, said Peter Budetti, deputy administrator for program integrity at the Centers for Medicare and Medicaid Services.

Medical providers are being screened more closely, with the bad actors weeded out. Powerful predictive analytics software also is being installed to better detect potential schemes, Budetti said.

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