The nation’s economy is pulling out of the deep trough of 2008-11 and appears to be picking up. That bodes well for state anti-fraud legislation. Legislatures advanced fraud bills at a record pace in 2013 after spending most of their time during the past several years balancing shaky state budgets.
Look for another high-action year in 2014, with contractors plus auto fraud and staged-crash gangs the primary targets.
Michigan is among the few states without a fraud bureau of any kind. An automobile fraud authority is embedded in a larger reform package. Having a state agency will allow a more coordinated and focused clampdown. Some 70 percent of residents support creating a state authority, reveals research by the Michigan Insurance Fraud Awareness Coalition. In other words, the time is right. This may be the year for success.
Minnesota. A legislative task force soon will recommend ideas for anti-fraud bills to be introduced this year. Among the priority ideas:
- Expanding the exchange of information among insurers, law enforcement and NICB;
- Allowing the state Department of Commerce to impose civil fines on cheaters while preserving the state’s ability to file criminal charges; and
- Better educating consumers about fraud and alerting them how to avoid being conned. The Coalition recommended this measure, noting that outreach efforts have benefitted anti-fraud efforts in New York and Pennsylvania.
Maryland. Prosecutors will have have an easier time proving jurisdiction in Maryland to bring a fraud case if a bill championed by the state insurance administration becomes law. Suspects could be tried in any county where a) the insurance loss occurred; b) the insurance policy provides coverage; c) the insurer or its agent received the false statement; d) the defendant resides; or e) the fraudster received the stolen insurance money. The bill tracks laws in other states.
Colorado. Raising fraud penalties to a higher-level felony will be on the agenda. Anyone with prior a fraud sentence will receive a stiffer penalty for the next fraud conviction. The insurance department also would gain authority to yank the license of agents, brokers or others for fraud convictions.
New York. Once again Albany is likely to debate bills aimed at sham clinics and staged-crash gangs. Measures routinely fizzle even though New York drivers suffer under the thumbs of widespread no-fault gangs. Among the issues the Coalition has pursued is to criminalize staging crashes and recruiting fake passengers for setup car crashes.
Albany also is looking into expanding the state’s ability to boot deceitful medical-equipment providers from the no-fault system. A bill would enlarge the insurance department’s authority to stop payments to crooked equipment peddlers.
A related idea being discussed in Albany is to allow the Department of Financial Services to impose civil penalties on medical providers kicked out of the no-fault system.
Meanwhile, the governor has proposed welcome budget funding to help curb no-fault fraud. The money would help fund prohibiting payments to crooked health providers, levying civil fines for violations, and authorizing the Department of Financial Services to perform unannounced facility audits and inspections.
Albany needs to end its dysfunction and muster enough political will to pass legislation that everyone agrees is needed. The governor’s buy-in and political clout will be essential to breaking the logjam.
New Jersey. The legislature once again will look to:
- Restrict outsider access to crash reports for soliciting crash victims to receive potentially bogus injury treatment;
- Expand the exchange of case information allowing insurers to exchange fraud info with each other and NICB; and
- Make it a specific crime for drivers to lie about where they garage their vehicles to illicitly lower their auto premiums.
Shady Contractors. We expect several states to consider bills targeting dishonest contractors who prey on homeowners and insurers, especially after major storms. This continues the trends of 2012 and 2013, when at least 14 states enacted new or stiffer laws during those years combined.
Airbags. Bills making it a specific crime to manufacture and market counterfeit airbags likely will rear up in several states. I already testified before the Maryland legislature in November to support an expected 2014 measure. A bill already has been introduced in Alabama. Action also is expected in Pennsylvania. And a senior Louisiana legislator has sought the Coalition’s advice about a bill.
This will be a busy year for the anti-fraud community. Opportunities will abound to move America’s collective fraud laws to a new level. Fraud fighters should closely eye their statehouses for openings to get involved in moving new fraud laws onto the books. And the time to get organized is now.
About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.