Only three states remain without laws to combat insurance fraudas efforts to attack such scams are intensifying, according to aNational Association of Mutual Insurance Companies study releasedthis week.

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"Clearly the impetus for addressing the problem of insurancefraud continues to build steam at the state level," said KenMarshall, state affairs manager for NAMIC and author of an IssueBrief on the topic published this week.

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In 1993, the Coalition Against Insurance Fraud developed a setof model laws that included felony classification, anti-insurancefraud plans, and the creation of insurance fraud bureaus.

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"It is encouraging that the majority of states have taken actionto adopt most or some of these key legal provisions," Mr. Marshallsaid.

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According to the Issue Brief, 40 states have created fraudbureaus. But Mr. Marshall noted that in the 10 states that have notthere have been efforts to statutorily define insurance fraud aswell as provide proper penalties.

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The New York-based Insurance Information Institute estimatedthat fraud cost insurers about $29 billion in 2003. The so-calledsoft fraud, or padding of claims, added up to nearly $6 billion, or11-to-15 percent of all dollars paid in private passenger autoclaims.

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State efforts have been producing results, as evidenced byformer New York Superintendent of Insurance Greg Serio's successfuleffort to get state auto writers to reduce rates to compensate fordiminishing loss costs, which declined from 86 cents on the dollarin 2002 to 61 cents two years later. He termed such rate reductionsan "anti-fraud dividend."

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Mr. Marshall said that at least 16 states are consideringlegislation this year to enhance anti-fraud laws. "Particularlynotable are the related bills from Alabama and Vermont, two of thelast states in the nation to take action to statutorily recognizeinsurance fraud and adopt measures to curb related abuses," hesaid. Oregon is the third state without such laws.

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