A bill championed by Washington Insurance Commissioner Patty Kuderer that aims to combat insurance fraud was unanimously passed by the state Senate earlier this week. If signed into law, Senate Bill 6031 would designate insurance fraud in the state as its own crime, a Class B felony.

Class B felonies are considered mid-range felony offenses and are punishable by up to 10 years in prison and substantial fines. Under SB 6031, the definition of insurance fraud includes billing an insurance company or customer for services that were not provided, impersonating others in insurance-related claims or transactions, and stealing insurance premium payments or premium financing loans.

SB 6031 also expands the definition of a "victim" of insurance fraud to include both insurance customers and beneficiaries, which makes them eligible for criminal restitution. It also expands statutory reporting requirements for reporting insurance fraud to the commissioner by adding health care regulators, financial services professionals, law enforcement and other public safety agencies as required reporters.

Kuderer believes that the bill's provisions give the Insurance Commissioner's Criminal Investigations Unit (CIU) the tools to tackle modern insurance fraud.

"Defining the most serious acts that defraud insurance companies and consumers as the crime of insurance fraud helps us hold the most egregious actors accountable," Kuderer said in a release. "This approach shifts CIU's focus away from simple scams — like crashing a car and then buying a policy — to more complicated schemes, like exploiting loopholes to steal large amounts of money in smaller denominations to avoid prosecution."

According to the Office of the Insurance Commissioner, insurance fraud costs insurance companies $300 billion each year. That expense is then passed on to consumers in the form of higher insurance rates.

The bill will now move to the Washington House of Representatives for consideration.

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