Washington–A Virginia legislative panel last week rejected a measure to add a specific insurance fraud crime to its books, dismaying law enforcement officials and an insurance trade group that promotes such provisions.
The decision by a committee of Virginia's lower House means the state remains one of four in the nation without a law making insurance fraud a specific crime. The others are Alabama, Vermont and Oregon.
"A small faction decided Virginia doesn't need a fraud law," said Howard Goldblatt, director of government affairs for the Washington-based Coalition Against Insurance Fraud.
"This is short-sighted thinking. The state police, who are closer to the streets than any legislator, fully supported the bill as a vital tool of law enforcement," Mr. Goldblatt said.
According to Mr. Goldblatt, the bill, S.B. 497, unanimously cleared the state Senate in late February, and was "gaining momentum."
But members of the state House of Delegates asked themselves, "Is the current system not working?" and answered, "We don't think so," Mr. Goldblatt said.
Mr. Goldblatt said the antifraud language was removed from a larger bill because of the reluctance of Virginia legislators to create any new state laws.
"Virginia tends to be a common law state," explained Mr. Goldblatt. "So, adding specific crimes to the state's books is done with great hesitation. Virginia is known as a state that is very reluctant to pass any new laws."
He said the bill failed despite strong support from both the state police and commonwealth attorneys, or state prosecutors, in Virginia.
State police testified in support of the law because police officials said that a specific provision would help their investigators probe a crime and aid them in persuading prosecutors to bring a case.
The Coalition joined the effort to secure a separate provision for insurance crimes because Virginia's population is growing and police are seeing increased pressure from insurance swindles across all lines, Mr. Goldblatt said.
He said the bill "was balanced," targeting insurer, adjuster and agent activities as well as consumer activities. The state police drafted and championed the bill, using a model law written by the Coalition Against Insurance Fraud, he said. The state police also oversee the state insurance fraud bureau.
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