The subject of insurance fraud is a serious issue for the industry. How's that for understatement? Just ask Dave Rioux, CIFI, vice president and manager of the Corporate Security Department–Investigative Services Section of Erie Insurance. He also serves as a director for the International Association of Special Investigation Units (IASIU).

Actually, you don't have to. In this issue, you'll find the first installment of a two-part article, "A Recipe for Change," which puts the problem into scary perspective. Part two will follow in next month's issue, and will continue to offer the latest updates on the insurance industry's efforts to band together in the fight against fraud. The complete article also will appear in its entirety in the summer issue of SIU Today, the official quarterly publication of IASIU.

CCOR, the Chief Claim Officers Roundtable, is comprised of a group of senior claim officers representing 18 P&C insurance companies. For the past three years, CCOR has worked diligently through its various committees and summit meetings to bring about a cohesive plan to improve the industry's fraud-fighting efforts (even to the point of exploring a merger of the Coalition Against Insurance Fraud, the National Insurance Crime Bureau, and IASIU). These two articles give an in-depth review of where we've been and where we're going in the fraud-fighting arena.

This is definitely "must-read" material for everyone in claim handling. Here's why: "Property/casualty insurance fraud cost insurers an estimated $30 billion in both 2004 and 2005, according to the Insurance Information Institute (I.I.I.). Fraud may be committed at different points in the insurance transaction by different parties: applicants for insurance, policyholders, third-party claimants, and professionals who provide services to claimants." I.I.I. further reports on its web site that important progress has been made as the industry moves forward in this important fight. "About 40 states have set up 48 fraud bureaus (some bureaus have limited powers, and some states have more than one bureau to address fraud in different lines of insurance). These agencies have reported increases in referrals, cases opened, convictions, and court-ordered restitution," I.I.I. says.

I.I.I. highlights other recent developments in the ongoing fight. Among them:

  • New York's Governor Eliot Spitzer signed a bill in March 2007 that enhances measures to combat workers' compensation fraud. Officials in Massachusetts, which instituted community fraud task forces, have reported drops in auto insurance premiums at significant rates as a result of lower incidences of fraud.
  • After the 2005 hurricanes, the National Insurance Crime Bureau (NICB) sent teams to affected states to help identify and catalog flooded vehicles and boats in cooperation with the Louisiana State Police Insurance Fraud Unit and insurance company investigators. A database was created and made available to law enforcers, state fraud bureaus, insurers, and state departments of motor vehicles.
  • A joint effort by the NICB, the Louisiana State Police Insurance Fraud Unit and insurance company investigators resulted in over 300 investigations and 72 arrests. These investigations of potential fraudulent claims involved $11.3 million.

That's just the tip of the iceberg in the galvanizing war on fraud. The success of these types of efforts will continue to mushroom as a result of dedicated professionals like those in CCOR.

Interested in more fraud news and in-depth articles? Head over to Claims' fraud channel for more information.

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