Several years ago I was part of a group of insurers, consumers and others who met in Lansing, Mich. We drafted a proposal to create an automobile insurance-fraud authority. The measure was introduced, and the insurance commissioner at the time showed interest. Still, the proposal fell short.
A version of that proposal now is part of a larger effort by insurers and legislators to reform Michigan’s no-fault automobile insurance system. But the reform effort is far from universally liked and appears to have little momentum.
So this means the fraud authority is drifting as well. A worthy cause may fizzle despite widespread agreement that Michigan needs such an agency to help coordinate and energize the fight against auto-insurance schemers, especially staged-crash rings. Michigan is the second-largest state without some form of central anti-fraud agency.
Last month I spoke with several Michigan legislators — Democrats and Republicans — and an insurance regulator. They all appeared supportive of the fraud authority. But the proposal sits, moored to a drifting reform package that likely will run out of steam.
Conversations about when the anti-fraud community should push to jettison the fraud authority from the larger package are in the infancy stages. Supporters think strategies to move the fraud authority as a stand-alone measure should move forward at some point.
Now we have Minnesota.
For years the legislature has heard about the need to strengthen Minnesota’s insurance-fraud laws. So a key legislative committee chair created a working group of lawmakers last year. It was tasked with studying the state’s diverse insurance-fraud issues.
The working group held public meetings, inviting interested parties to make recommendations. The Coalition was among the insurers, consumer groups, medical-provider groups and attorney organizations that offered remedies. The working group issued its report in mid-February, and legislation was introduced soon after the session opened.
I submitted testimony for a hearing two weeks ago praising several of its anti-fraud measure which would:
- Give the Department of Commerce authority to civilly fine fraudsters, in addition to imposing criminal penalties;
- Encourage state license boards to de-certify crooked medical providers from receiving insurance money; and
- Strengthen fraud investigations by allowing insurers to freely exchange information about cases with insurers, law enforcement and organizations like NICB.
But much like Michigan, the fraud provisions are tied to a larger reform bill aiming to tighten the auto-insurance system. Many key legislators support the anti-fraud provisions. Yet the measure is just beginning to test the waters. Supporters are cautiously optimistic.
Fraud fighters can make the difference. Last year the Coalition and IASIU created a grassroots response system for IASIU’s investigator members to use in states where timely action is needed.
The Engage system channels the robust energy of fraud fighters into writing supportive letters to their legislators. A similar campaign this year on an anti-fraud measure in Colorado is already underway. The effort has generated more than 50 letters in just its first month.
We’ve begun urging Minnesota investigators to take similar action to support SF 2372. Fraud fighters work hard to be credible and effective crime fighters. Now is the time to translate those worthy qualities into votes that turn anti-fraud measures into law.
And, look soon for grassroots efforts to get the New York governor to push efforts to strengthen the state’s auto fraud effort.
About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.