After clearing the House and Senate committees, two bills aimedat propelling Maryland's fraud-fighting efforts now await Gov.Martin O'Malley's signature.

If brought to fruition, the bills would accomplish twoobjectives:

1. Allow state insurance administrators to seek civil penaltiesagainst fraudsters.
2. Modify the state's immunity law to ostensibly provide more ofan incentive for sources to assist with investigations.

Under HB-1094/SB-811, the state would be permittedto impose fines on guilty parties and pursue restitution torecoup the expense of investigation. Lawmakers believe forcingcriminals to pay beyond what they stole would ultimatelyundermine larger operations, such as staged auto-accident rings,which plague Maryland, New York, Florida, and other states. Inaddition to hindering potential profits associated with thisschemes, the measure would send a clear message to would-bescammers while putting a damper on rings' recruitment ofaccomplices.

The Coalition Against Insurance Fraud (CAIF), which testified in support of both bills before the Maryland Houseand Senate committees, notes that in general, civilactions have higher odds of success than criminal prosecutionsbecause the burden of proof is lower.

“Maryland has struck a solid blow against insurance fraud,” saysHoward Goldblatt, director of government affairs for the CAIF.“Fraud fighters now have stronger tools to root out schemes and putthe masterminds out of business.”

Incentives for Collaboration

To encourage the ready exchange of case information amonginsurers, law enforcement, the National Insurance Crime Bureau(NICB) and various databases, HB-1097/SB-812 would expand immunityfor fraud fighters working jointly to strengthen the state'soverall ability to combat fraud.

Neighboring states New Jersey and Delaware have already passedlaws enabling civil and administrative actions. This echoes agrowing trend among states to expand their affordable options forattacking fraud rings.

The immunity bill brings Maryland in line with the other 30states that have similar laws. The measure clearly grantsfraud fighters immunity from being sued for defamation whileexchanging case information.

The CAIF reports that states with broad immunity laws suchtypically receive an average of 18 percent more case referrals frominsurers and other sources compared to states that offer little orno immunity.

“Broad immunity encourages fraud fighters to report suspectedscams,” Goldblatt says. “Insurers also are more likely to investanti-fraud resources in states that are free from the cloud ofoppressive and meritless civil suits.”