Anti-Fraud Bills Progress In Two States

By Matt Brady

NU Online News Service, April 7, 4:24 p.m.EDT?Legislation to stiffen the penalties for thosecommitting insurance fraud is moving through the legislatures oftwo states.

In Indiana, yesterday the state Senate voted to approve HouseBill 1403, which would expand the state's insurance anti-fraud lawsby covering more crimes and increasing the penalties for thoseconvicted.

The bill was sponsored by state Rep. Andrew Thomas, R-Brazil,and has already been passed by the House. It will return to theHouse for a procedural review, and is expected to be signed by Gov.Mitch Daniels.

"Indiana finally has a law that's strong enough to have realdeterrent value and impose fair punishment for swindles that causewidespread damage," said Howard Goldblatt, director of governmentaffairs for the Coalition Against Insurance Fraud, an alliance ofinsurers, consumer groups and state agencies to combat fraud.

Indiana's current law, the Coalition noted, are weak to thepoint that prosecutors rarely use them. In fact, Rep. Thomashimself is a former prosecutor who has never tried an insurancefraud case, the coalition said.

Currently, the state's insurance fraud laws only encompass thefiling of bogus claims and impose a maximum penalty of 18 months inprison and a fine of up to $10,000. Under HB 1403, additionalswindles, such as the theft of premiums by agents or the sale offake coverage, would also become criminal offenses, and thepenalties would be increased to a maximum of eight years in jailand a $100,000 maximum fine.

Should HB 1403 be signed into law, Mr. Goldblatt said,prosecutors would be more likely to bring cases to trial andincrease the number of fraud convictions, in addition to serving asa disincentive to those who would commit fraud.

"Fraud cases are competing with violent crimes such as murderand rape for a prosecutor's attention," he said. "Many fraud caseswill go to trial only if it's worth a prosecutor's time," hesaid.

Also yesterday members of the Florida House insurance committeeapproved legislation that would impose a two-year minimum prisonsentence for the filing of a police report after a fabricatedaccident.

The measure would also require health clinics to post the numberfor the state Fraud Buster hotline and reward information forreporting fraud. The bill, proposed by Rep. Dean Cannon, R-WinterPark, was passed by a vote of 15-0, with five members not voting. Acompanion bill in the Senate by state Sen. J.D. Alexander waspassed 10-0 by a Senate committee on Tuesday.

The Florida bill has the support of state Chief FinancialOfficer Tom Gallagher, who appeared with Rep. Cannon earlier in theweek to push for its passage.

Florida requires drivers to carry at least $10,000 in PersonalInjury Protection coverage and $10,000 in property damage liabilitycoverage, Mr. Gallagher noted, adding that, "this coverage isintended to protect our citizens by ensuring immediate access tomedical care, and ensuring that hospitals ? where most legitimateaccident victims seek care ? are reimbursed."

"Instead, fake medical clinics are springing up for the solepurpose of fraudulently billing insurance companies," Mr. Gallagheradded. "We have to stop that and need the help of every law-abidingFloridian to do that."