Most industries are feeling the pinch of the economic downturn,so it's no surprise that Oklahoma has fired some of its fraudinvestigators. What is surprising is the explanation for doing so,which essentially claims that investigating fraud is not thebusiness of the state.

According to the Coalition Against Insurance Fraud (CAIF) blogpost written by Dennis Jay, six of nine investigators were fired onJanuary 24, 2011. Randy Brogdon, the deputy commissioner ofinsurance who recommended the downsizing, was quoted in the localnewspaper, NewsOK, as saying “The companies need to handletheir own claims. Investigating policyholders is not a function ofthe Insurance Department.”

The CAIF blog post, however, respectfully disagrees withBrogdon's stance, citing the state law that created the fraud unitwhich “clearly says its function is to investigate any violation ofOklahoma's insurance fraud statute, which includes claims fraud.”The blog continues its argument, noting that, “It's a bitsurprising that Mr. Brogdon doesn't know this since up until a fewweeks ago he was a state senator.”

Jay also brings up a few regulations, such as the annualassessment of $750 insurers in the state are required to pay inorder to fund the unit, and the requirement that they report anysuspected fraud to the Department of Insurance.

One of the investigators fired expressed concern for the futureof investigations, stating, “If I were going to commit insurancefraud in Oklahoma, I would feel pretty confident I could get bywith it.” The CAIF asserts that the cut to the force will meanincreased rates for Oklahomans due to a rise in fraudulent claimsthat won't be investigated.