NAIC Moves To Set Antifraud Standard For Insurers

NU Online News Service, Dec.17, 9:40 a.m. EST

The National Association of Insurance Commissioners Antifraud Task Force is proposing to ask insurers to detail their company plans to combat fraud.

A format for the data request was contained in a draft document announced at the NAIC Winter National Meeting in San Francisco.

The purpose of the guideline, the NAIC document states, is to establish standards regarding the preparation of an antifraud plan "that meets the mandated requirements for filing a plan with a state Department of Insurance."

According to the NAIC, 20 states currently require that fraud plans be prepared for inspection by their state Departments of Insurance.

"The concept of mandating the submission of an insurer fraud plan was developed to encourage those insurers with direct written premiums to fight insurance fraud proactively by drafting a plan to fight fraud," the NAIC said in the draft document.

Insurers are asked by the draft to provide detail in certain areas of their antifraud efforts, including prevention, detection, and investigation of fraud; reporting of fraud; internal fraud detection and prevention; and education and training.

Howard Goldblatt, director of government affairs for the Coalition Against Insurance Fraud said the coalition supports fraud plans for insurers. He said the NAIC document helps in the area of uniformity.

Mr. Goldblatt explained that with uniformity, if one of the 30 states that do not require fraud plans decides to implement that requirement, it would not be burdensome for insurers since it would be similar to what they have done in other states.

He said it would be "nice to have some more legal structure" regarding the NAIC document however.

The draft can be viewed at http://www.naic.org/committees_d_antifraud.htm, and interested parties will be allowed to comment until Jan. 20, 2010.