House representatives in Indiana recently voted 95 to one inapproval of HR 1403, a bill strengthening the penalties forinsurance fraud committed in the state. The state's Senate will nowopen debate on the legislation.

Beefing up a previously weak law will allow the state to beginseriously combating one of its most neglected crimes, according tothe Coalition Against Insurance Fraud. “Indiana has one of nation'ssoftest fraud laws, and rarely even prosecutes insurance scams,”said Howard Goldblatt, the coalition's director of governmentaffairs. “Finally imposing serious penalties will give prosecutorsan effective tool to clamp down on swindles in the state.”

The legislation would increase jail terms for larger insurancefraud schemes, imposing sentences of up to eight years in jail. Thecurrent law allows only one year, no matter how large and damagingthe fraud. Fines also would increase significantly.

“Stiffer penalties will give prosecutors far more incentive totry these often-complex crimes,” Goldblatt said. “Prosecutors oftenturn down insurance fraud cases in Indiana because the weakpenalties are rarely worth the large effort required to get aconviction.” Stronger penalties also should prove as a deterrent tomany would-be scam artists who are not intimidated by Indiana'stoothless fraud law, he added.

Premium fraud, such as selling fake health insurance or agenttheft of client premiums, also would become a specific crime,encouraging more state prosecutions. The present law covers onlyfalse claims.

“Prosecutors greatly increase their chances of earning aconviction for premium scams with a law that's enlargedspecifically to include this crime,” Goldblatt said.

The bill has broad support in the state, and was initiated bythe Indiana chapter of the International Association of SpecialInvestigation Units.