Says Bill Would Make Jersey Toughest On Fraud

Mr. Tiene said the odds that the bills will pass are "very good, because the problem is so severe."

His group called on the legislature to pass a package of proposals put forward by Democratic Gov. Jim McGreevey in October. The Council noted that over the last several days, New Jersey has seen two major legal actions concerning auto insurance fraud including a multi-million dollar civil action by prosecutors against a chiropractor and the indictment of a 48-member phony auto accident ring.

The governor's legislative proposals, recommended by the state attorney general and the state's insurance fraud prosecutor, include creation of a new crime of "Insurance Fraud."

Mr. Tiene explained that currently, insurance fraud prosecutions must be brought under mail fraud or theft by deception statutes, which are difficult to employ because they must involve $75,000 in criminal activity.

The Insurance Fraud crime would be an indictable offense for amounts of $1,000 or more. The Council noted that such a threshold already exists for the crime of "health care claims fraud."

Mr. Tiene said the law would also make it a requirement that persons convicted under the statute would lose any professional certification they held that required state licensure?be it for plumbing, medicine or any other specialty.

Mr. McGreevey has also called for measures to establish a hotline and an "Insurance Fraud Detection Reward Program"; increased fines for drivers without insurance identification cards, and the implementation of a proposal to impound the cars of those who drive without insurance.

There is "a genuine commitment by this administration to aggressively fight insurance fraud," said Tiene. "These cases demonstrate that it is time to get these initiatives passed. A stronger insurance fraud statute will capture crimes of this nature and put insurance cheats behind bars."

The Council said it estimates that auto insurance claims fraud cost each New Jersey household $286.13 in 1999 and insurers deny over $50 million in suspected fraudulent claims each year and turn these cases over to the state's Office of the Insurance Fraud Prosecutor for legal action.

In 2001, the New Jersey Office of Insurance Fraud Prosecutor filed 92 indictments and obtained 86 convictions for insurance fraud activities. The convictions resulted in a total of more than 107 years of incarceration and more than 175 years of probation. In addition, the Prosecutor's actions generated over $6.8 million in restitution and almost $1 million in fines.