Washington Gov. Christine Gregoire signed legislation today to give her state an insurance fraud bureau and a special fraud prosecutor.

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

The governor's action was hailed by the Coalition Against Insurance Fraud. "A fraud bureau will add sharper focus and better enforcement power to Washington's anti-fraud efforts," said Howard Goldblatt, the coalition's government affairs director. "Washington needed a more-robust response to swindles. Business as usual no longer worked."

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

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

"A fraud prosecutor ensures a steady focus on insurance swindles," Mr. Goldblatt said. Other states such as California, New Jersey and Florida have spurred rapid increases in fraud convictions by hiring fraud prosecutors, he noted.

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

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

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

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

Fraud bureau investigators will have limited police powers. Investigators will be able to subpoena fraud suspects, but will not have arrest powers under the new measure.

In addition, the law requires that insurance applications and claim forms must carry fraud warnings. Such warnings put would-be swindlers on notice, and the signed documents provide clear evidence of fraud during prosecutions, the coalition said.

The new statute also clarifies that insurers can be fraud victims. This allows insurers to receive restitution as victims of swindles.

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

Special Reports /

Wash. Enacts Fraud-Fighting Law

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