Over a year ago I wrote that there’s no such thing as a “no-brainer” when it comes to passing legislation. Issues are harder to move forward when observers think they’re a “no-brainer.” I wrote that blog with Michigan in mind.
Michigan is one of the two most populous states without an infrastructure to tackle insurance fraud. There’s no fraud bureau, fraud authority or dedicated prosecutors. There’s no state agency to investigate and prosecute suspected frauds.
Several years ago the Coalition worked with anti-fraud partners to help craft a bill creating a fraud authority to target widespread auto-fraud schemes in Michigan. Staged-crash rings were among the offenders needing stifling.
The authority would have a statewide board funded by an assessment on auto insurers. The funds would be distributed as grants to law enforcement statewide, local prosecutors and others to chase down auto scammers. Michigan’s legislation was modeled after the Pennsylvania Insurance Fraud Authority, which is a successful statewide anti-fraud effort.
In advocating legislation for a fraud authority, legislators had difficulty understanding that auto insurance fraud is a statewide concern instead of a local issue. Then the state police pushed back, fearing they might lose funding for their own auto-theft authority. Those concerns eventually were resolved.
The fraud authority was a stand-alone bill. But that changed a couple of years ago when the governor, many legislators, opinion leaders and insurers decided Michigan’s entire no-fault auto insurance system needed an overhaul. So the fraud authority was rolled into the current comprehensive no-fault reform package. That has tied up efforts to pass an auto-fraud authority.
Several versions of large scale no-fault reform have fizzled, and the auto fraud authority went down with the doomed bills each time.
Michigan’s statehouse is about to close for the year, with a new legislature and leadership coming in 2015.
It’s time to rethink the issue. The auto-fraud authority should stay free of large reform bills, which often collapse from their own weight and complexity. The agency should be introduced as a stand-alone bill. It has wide support, and stands a far better chance of passing that way. Michigan drivers and fraud fighters deserve nothing less.
About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.