Online Alert For Phony Insurers Formed
By Daniel Hays
NU Online News Service, Sept. 16, 12:00 p.m. EDT, Chicago?An e-mail alert system was set here yesterday to warn state anti-fraud officials about the activities of unauthorized insurance operations.
The action was announced at a meeting of the Antifraud Task Force at the fall session of the National Association of Insurance Commissioners.
Jim Harrington, chief of the investigative unit of the California Insurance Department said the proliferation of unauthorized insurance entities was primarily in the property casualty field. Since neither buyers nor sellers of unauthorized insurance products are willing come forward and report the activity, "early detection is an issue."
He said the Task Force would create an e-mail list to warn enforcement officials of such operations. "We believe the information should be available to all states," he said.
Mr. Harrington said after the meeting that though figures on unauthorized operations are hard to come by, "we know there has been a proliferation." In California it has been most pronounced in the workers' compensation insurance area.
Enterprises engaged in sales of phony insurance, he said, generally arise following the high prices of hard markets and prey upon buyers in financial trouble.
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