NU Online News Service, Oct. 26, 1:40 p.m. EDT
New Jersey's top insurance regulator recently announced the creation of a new unit that will focus exclusively on insurance fraud.
Tom Considine, commissioner of the Department of Banking and Insurance in the state, unveiled the Bureau of Fraud Deterrence, which he said is comprised of 90 civil investigators and staff who were previously part of the Office of the Insurance Fraud Prosecutor in the Attorney General's Office.
Officially beginning their duties for DOBI this month, he said the new fraud bureau is responsible for investigating and enforcing civil violations of the New Jersey Fraud Insurance Prevention Act.
"Our partners at the Department of Law and Public Safety will continue to investigate and prosecute criminally those who perpetrate fraud," he said in a statement, calling the separation of civil and criminal "a common-sense reorganization" that will strengthen the state's ability to deter fraud. "Housing the Bureau within DOBI will benefit all involved by creating synergies between Bureau staff and the existing insurance regulators," he said.
Noting that October is Insurance Fraud Awareness Month in the state of New Jersey, Commissioner Considine took the opportunity to remind consumers about the scope and impact of insurance fraud.
In 2009, New Jersey opened 5,683 new fraud cases, roughly 4,500 of which were civil investigations, he said, adding that experts believe the nation loses some $80 billion a year to insurance fraud.
"Many consumers may not be aware of the prevalence of insurance fraud, nor the trickle-down negative impact it causes," Commissioner Considine said.
In addition to being widespread–ranking as the second most costly white collar crime and as one of the most often carried out crimes in the nation–he said "insurance fraud also affects a widespread group of people–everyone."
"All insurance consumers pay the price for insurance fraud," he said, explaining that insurance companies recoup their losses from fraudulent claims by charging higher premiums. "This leads to hundreds of dollars in increases for the average household and makes us all victims," he said.
He highlighted the growing societal acceptance of fraud as a "disturbing trend" and noted that perpetrators come from a varying demographic of people from many different walks of life–not just consumers, but their professional representatives, such as doctors and lawyers.
The new fraud unit of DOBI, he said, will investigate all levels of alleged fraud–"from misrepresentations on an insurance application to a complex conspiracy."
"In particular, the department is making a special effort to investigate suspicious and phony personal injury protection claims as well as questionable claims of medical services not actually provided," he said.
The department said insurance fraud victims or individuals with information about a possible fraud should call 1-877-55-FRAUD, 1-800-446-7467 or e-mail NJInsuranceFraud@njdcj.org.
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