Vermont House Passes Insurance Fraud Bill

The Vermont House of Representatives approved and sent a measure to the State Senate yesterday that would make insurance fraud a specific crime in Vermont.

Sponsored by Rep. Kathleen Keenan, D-St. Albans City, and Rep. Mark Young, R- Orwell, the chair and vice chair of the House Commerce Committee, the measure covers a wide range of insurance crimes. It includes bogus claims plus scams by agents, public adjusters and insurers.

The measure carries a maximum prison term for violators of up to five years and fines up to $10,000 and $20,000 for a second offense.

Vermont is currently one of four states that lack a specific anti-fraud statute for insurance crime, according to the Washington-based Coalition Against Insurance Fraud.

The measure, H. 150, also includes provisions requiring insurers to place fraud warnings on claim forms and insurance applications. Under its language, insurers would be required to develop anti-fraud plans and submit them the insurance department.

Howard Goldblatt, the Coalition's director of government affairs, said if the bill passes, it will encourage more fraud investigations and prosecutions in Vermont.

“The state's current laws are so ill-suited for insurance cases that some swindlers aren't brought to justice. A law will provide the legal roadmap fraud fighters need to pursue cases,” he said.

Mr. Goldblatt in a statement said he had seen no overt opposition to the measure, but at this point it is too early to determine the odds of the bill's securing passage in the Senate. The legislature is due to recess for the summer May 18.

Among the other states that lack an insurance fraud statute, a similar bill recently died in Virginia, while Alabama is currently debating a fraud bill and the Oregon legislature doesn't meet this year.

Coalition Against Insurance Fraud said H. 150 is based on a model it developed.

Rep. Keenan is a former president of the National Conference of Insurance Legislators.

Mr. Goldblatt said, “Vermont only has moderate problems with insurance fraud. But a fraud law would give the insurance department, prosecutors and insurers a much better tool to combat swindles when they do arise.”