NAIC Sets Up Online Fraud Reporting System

By Steve Tuckey

NU Online News Service, Jan. 28, 3:34 p.m. EST?The National Association of Insurance Commissioners said its Web site now contains an online insurance fraud reporting system as part of an effort to address issues surrounding insurer payments to insurance brokers.[@@]

The system allows consumers to provide detailed information anonymously and is one part of the NAIC's three-part action plan developed by its Executive Task Force on Broker Activities over the past four months to protect consumer interests, the organization said.

"State insurance regulators continue to move forward on a coordinated mission to deal with the issue of broker compensation aggressively," said Diane Koken, NAIC president and Pennsylvania Insurance Commissioner.

The insurance fraud reporting system is available via the NAIC Web site or directly at https://external-apps.naic.org/ofrs_entry.jsp. It is accessible from two links on the NAIC home page: under the "New and Noteworthy" section and through the Consumer Information Source.

Some industry critics were not impressed with the effort.

"Too little, too late," said Robert Hunter, former Texas insurance commissioner and insurance director for the Consumer Federation of America.

No personal identifying information is required to submit an allegation of suspected fraud. A consumer wishing to receive verification of the NAIC's receipt of the report is required to provide a name and e-mail address. Consumers may also choose to provide additional contact information to facilitate additional communication from the state insurance department that investigates this report.

To file a suspected insurance fraud report, consumers are required to indicate the state where the suspected fraud occurred and the name of the business or individual, with a complete address.

The NAIC action on broker compensation follows investigations by various authorities including New York State Attorney General Eliot Spitzer, who filed a civil action accusing Marsh brokerage of fixing prices and steering commercial customers to insurers who made incentive payments to the broker.

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NAIC Sets Up Online Fraud Reporting System

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