Tough legislation to increase fraud penalties in Florida for filing fraudulent auto crash reports that can be used to bilk insurance companies, to strengthen consumers’ rights to sue operators of unauthorized insurance entities and to enhance criminal charges for workers’ compensation fraud have the support of Tom Gallagher, Florida’s CFO and Rep. Dean Cannon.
Cannon, R-Winter Park, and Sen. J.D. Alexander, R-Lake Wales, are sponsoring companion bills. Senate Bill 2330, is scheduled to be heard Tuesday by the Senate Banking and Insurance Committee, and House Bill 967 is expected to be heard Wednesday by the House Insurance Committee.
The proposed legislation would impose a two-year minimum mandatory prison sentence for filing any police report on a fabricated auto accident. It also would require medical clinics to post the department’s Fraud Buster hotline number and reward program information.
Florida drivers are required by law to carry at least $10,000 in Personal Injury Protection (PIP) coverage, in addition to $10,000 in property damage liability coverage.
“This coverage is intended to protect our citizens by ensuring immediate access to medical care, and ensuring that hospitals-where most legitimate accident victims seek care-are reimbursed,” Gallagher said. “Instead, fake medical clinics are springing up for the sole purpose of fraudulently billing insurance companies. We have to stop that and need the help of every law-abiding Floridian to do that.”
“Floridians are getting hit head-on with higher premiums and costs due to insurance fraud,” said Cannon. “Insurance fraud has a direct financial impact on hard-working Floridians, and the legislation we are proposing would go a long way toward stopping these schemes.”
In 2003, the Legislature enacted some of the strongest laws against PIP fraud. That legislation provided a two-year minimum mandatory prison sentence for planning, assisting or participating in the staging of an auto accident or soliciting patients for the purpose of filing fraudulent insurance claims.
Tougher sentences are the result of the laws imposed in 2003. More convictions are the result of Florida’s first dedicated PIP fraud prosecutor, Nina Vivenzio, whose position is funded through the Florida Automobile Joint Underwriting Association and the Miami-Dade State Prosecutors Office.
In the last five years, the Department of Financial Services’ fraud division, which Gallagher oversees, has arrested more than 900 individuals associated with more than $25 million in PIP fraud, and more than 70 are facing or serving the minimum prison sentence.
Alexander and Cannon’s proposed legislation also would clarify Floridians’ right to sue the operators of bogus insurance operations. There is no guaranty fund to cover unpaid claims should an unauthorized insurance company become insolvent.
Since 2001, the department has taken action against more than 200 unlicensed entities and agents for selling fake insurance to thousands of Floridians, who were left with more than $18 million in unpaid claims.
The legislation also would enhance criminal charges that can be brought against employers who do not provide workers’ compensation coverage, which is required in Florida for employers with four or more workers. It would make it a first-degree felony if an employer does not provide the coverage and an employee is killed on the job. It would be a second-degree felony if an employer does not provide the coverage and an employee is hospitalized with an on-the-job injury.
Some 1,800 Florida employers last fiscal year were fined or criminally charged for not providing insurance coverage on more than 13,000 workers. Two workers were killed in a construction accident last July on a Hobe Sound work site, and their employer had no coverage. The employer was charged with a third-degree felony and fined $2.4 million.
“Insurance fraud not only is a drain on our economy, it also is a public safety concern,” Gallagher said. “We have people on our roads looking to have accidents, we have Floridians being sold bogus insurance plans, and we have workers who may not have access to appropriate medical care if they are hurt on the job. I urge legislators to join us in support of this legislation.”
Topics Florida Fraud Legislation A.J. Gallagher
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