Washington Gov. Christine Gregoire signed legislation today togive her state an insurance fraud bureau and a special fraudprosecutor.

The bill that will go into law, SB 6234, passed the state Houseand Senate earlier this year by decisive margins.

The governor's action was hailed by the Coalition AgainstInsurance Fraud. "A fraud bureau will add sharper focus and betterenforcement power to Washington's anti-fraud efforts," said HowardGoldblatt, the coalition's government affairs director. "Washingtonneeded a more-robust response to swindles. Business as usual nolonger worked."

According to the coalition, the new Washington law brings to 40the number of states that have created insurance fraud bureaus inaddition to Washington, D.C.

Mr. Goldblatt noted that insurance swindles in many statescompete for a state prosecutor's attention with other crimes,including murder, drugs and robbery.

"A fraud prosecutor ensures a steady focus on insuranceswindles," Mr. Goldblatt said. Other states such as California, NewJersey and Florida have spurred rapid increases in fraudconvictions by hiring fraud prosecutors, he noted.

The Washington special prosecutor will be assigned to thestate's attorney general's office. The state's insurance departmentwill oversee the fraud bureau, which will have eight employees. Thedepartment drafted the law and led the push for passage.

The new law takes effect July 1, but, according to thecoalition, it is unclear when the unit will begin operations. Itwill be funded by the insurance department's operating budget andwill not involve any assessment of insurers.

In addition to setting up the new unit and prosecutor, the newlaw requires mandatory reporting by insurers of suspected swindlesto the fraud bureau.

Information from fraud investigations is required to be keptconfidential and will not be available publicly. In addition,anyone reporting fraud will be fully covered by civil immunityagainst lawsuits by fraud suspects.

Fraud bureau investigators will have limited police powers.Investigators will be able to subpoena fraud suspects, but will nothave arrest powers under the new measure.

In addition, the law requires that insurance applications andclaim forms must carry fraud warnings. Such warnings put would-beswindlers on notice, and the signed documents provide clearevidence of fraud during prosecutions, the coalition said.

The new statute also clarifies that insurers can be fraudvictims. This allows insurers to receive restitution as victims ofswindles.

"Insurance crimes can only be fought effectively through highlycoordinated efforts by insurers and state agencies," said Mr.Goldblatt. "The new fraud bureau puts swindlers on notice thatWashington is serious about combating insurance fraud and helpingkeep coverage affordable in the state."