Wash. Senate Approves Insurance Fraud Unit, Prosecutor

The Washington state Senate has passed a bill creating the state’s first insurance fraud bureau and adding a fraud prosecutor. SB 6234 passed by a 35-10 margin, and now heads to the House for debate.The bill had to pass the Senate by the close of business Tuesday or it would have expired for the year.

“Creating a fraud bureau would show that Washington is serious about going after insurance fraud. This is an entrenched, often-complex crime that requires a focused enforcement mechanism in order to properly uncover and prosecute it,” says Howard Goldblatt, director of government affairs for the Coalition Against Insurance Fraud.

Washington is one of 10 states still without a fraud bureau. The state makes insurance fraud a crime, but the lack of a fraud bureau has hampered anti-fraud efforts, said Goldblatt, who has testified before a key House committee to support the bill.

The legislation includes provisions to:
* Give investigators limited police powers; they could issue subpoenas but couldn’t arrest fraud suspects.
* Require insurers to report suspected scams to the bureau.
*Define insurers as fraud victims when seeking restitution. This clarifies that a corporation is entitled to restitution as a victim.
*Require insurance applications and claim forms to carry a warning against committing insurance fraud.

Additionally, Goldblatt said the unit would give insurers, consumers and others a place to report suspected scams, a vehicle for focused investigations, and a mechanism for channeling cases for prosecution.

The fraud bureau would be overseen by the insurance department and would have eight employees, including investigators and other support staff. A prosecutor would be assigned to handle cases the fraud bureau refers to the attorney general’s office. This would ensure a consistent focus on prosecuting insurance fraud over the long term, Goldblatt says.

The insurance department’s operating budget would fund the bureau. No new insurer assessments would be imposed, and local prosecutors also would receive grants to assist in fraud cases.
he added.