What is justice?

BLOG_justiceThe desire for justice has accompanied us since the dawn of humanity. Reading insurance fraud headlines every day, I’m confronted with stories about arrests, convictions and sentences. Underlying these stories is often the pursuit of justice, a concept we instinctively understand but have difficulty articulating.

What does justice mean in the context of insurance fraud? I often see prosecutors saying that they are going to “bring that person to justice for what he did,” or families grieving that they just “want justice done” for the crime that was committed. What does that even mean? Is justice something that can be imposed on a situation? Can a single person, by their volition or power, “bring” justice forth? Should it be it in our hands to make justice play itself out? And, in the case of deadly fraud schemes, is justice alone going to heal everyone’s wounds?

Great thinkers might give us a deeper insight into what justice means.

In Plato’s Republic, Socrates debates with a friend. His friend contends that justice is the authority of stronger citizens in their own self-interest. Socrates counters that justice is an absolute ideal that exists beyond people’s individual opinions; that justice is the proper ordering of the soul and the city to serve the good. So justice, he says, is an ideal that has to be discovered, it can’t be invented.

I recently overheard a prosecutor complain that it was often difficult to get judges to care about insurance fraud, unless the crime is a deadly arson or a harmful medical scheme. Fake theft claims, for example, garnered little interest.

Eastern religions hold to the concept of karma, the universe will conspire to bring bad circumstances in response to bad deeds, and vice versa. But our government is not ruled by karma alone. Fraudsters are usually sentenced to return some of the money stolen, and spend time in jail. Some sentences are light, other times, like the recent case of George Dalyn Houser a fraudster gets the maximum sentence.

Following that train of thought, is a just punishment, then, tied to the harmful impact the crime has had on human beings? Or is there an absolute ideal of justice unrelated to harm done? Opinion surveys say people are more likely to commit insurance fraud if they think of an insurance company as a big, impersonal enterprise that is not providing adequate customer service. People for the most part understand that fraud is wrong, but they are more willing to lash out at insurance companies they feel have wronged them first.

Is justice retribution?

Sometimes it seems that the people crying for justice are really just out for revenge. Are we trying to punish the person so they won’t even think of erring again, or trying to help them find their human dignity within the fabric of all their mistakes? Pope John Paul II, in Caritas Veritate, said you can’t have justice without mercy.

Or is justice perfect reciprocity, as in the ancient practice of an eye for an eye, a tooth for a tooth? One of the ideas in justice is proper proportion, the punishment should’t exceed the crime, but has to be related to the crime. Implicit in this idea is proportion and fairness.

Aristotle contends that hierarchy needs to be considered. For example, if an ordinary citizen punches an on-duty police officer, justice is not served if the officer just returns the blow. Nor is justice served if a regular citizen strikes back when struck by an officer trying to carry out his duties. So, Aristotle contends that when the relations between parties are hierarchical or unequal in some way, justice does not take the form of reciprocity.

Another definition of justice is when the action toward something is appropriate to the dignity of the thing.

In the context of determining punishment for insurance fraud, two key elements come into play: repairing the harm done, and correcting the reason for which the insurance fraud was committed. In human society we do what we can to make sure that justice is administered. And finally, what role does rehabilitation play in determining a just sentence? Is there a difference between justice for the perpetrator and justice for the victim?

About the author: Jennifer Tchinnosian is communications specialist for the Coalition Against Insurance Fraud.

Note to lawmakers in N.Y. and Michigan

Memorandum

To: NY, Mich. legislators

Re: Please see below

___________________________________________________________________

Your colleagues in Florida took a courageous step earlier this year in attacking no-fault auto insurance fraud. Looks like insurance consumers in the Sunshine State are going to save big time.

Just think how much your constituents could save. Anti-fraud measures work.

Sincerely,

The Coalition Against Insurance Fraud

Florida article

Ending shady contractors starts with teamwork

BLOG_toolsEfforts to target shady contractors continue, with several states enacting strict laws this year protecting consumers and insurers. But, the laws aside, contractors continue ripping off homeowners hit by devastating storms. It remains a widespread trend.

For instance, the National Center for the Prevention of Home Improvement Fraud is helping residents of Birmingham, Ala. recover from tornadoes that struck the city last year. Yes, homeowners have paid so-called contractors to repair their damaged homes, but many are still waiting for the repairs a full year after the storms.

Teamwork is needed to stop storm chasers such as these.

Thousands of Texas property owners were victimized by storm chasers after a slew of hail storms hit the Lone Star State, the Texas insurance commissioner recently told the legislature. The state lacks adequate laws to protect these homeowners, and more should be done during the legislature’s 2013 session, the commissioner says.

The Coalition met with the commissioner at the recent NAIC meeting to discuss ways to target the shady operators. The Texas Committee on Insurance Fraud also will meet in mid-September to fashion its 2013 legislative agenda. High on the list is this consumer-protection effort. The Coalition will join with other national anti-fraud organizations, insurers and partners in the Texas committee to seek stricter laws that protect Texas consumers and insurers.

What are the core legislative remedies? Among them: Allow consumers to cancel a contract if the insurer denies the claim because the repairs are unneeded; criminalize a contractor’s offering to rebate the deductible as an inducement to sign a contract; criminalize acting as an intermediary between the consumer and insurer (i.e., acting as an unlicensed adjuster) and; require a warning on contracts advising consumers of their right to cancel the contract within a certain timeframe.

But more than laws are needed. The Denver and Boulder Better Business Bureaus have received more than 90 complaints about roofers in just the last two months. And this is a state that just enacted strict laws targeting shady operators.

Public outreach before storms thus is essential. The Coalition already has partnered with the National Center for the Prevention of Home Improvement Fraud to support legislative efforts. We are also discussing how to educate consumers to avoid being victimized.

Insurers also must know how to assess if a contractor is reputable. The NAIC is starting with a webinar to educate investigators and others to “learn investigative techniques and helpful business practices.”

But paramount, an outreach partnership is needed. It should include insurers, law enforcement, regulators, consumer groups, organizations like the Better Business Bureau and others.

They should ensure the message is loud and clear that consumers know how to protect against dishonest contractors. This job must be done before a hurricane hits, tornado season begins and wildfires damage properties. Let’s start the partnership.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Life insurance — poor cousin in the world of fraud?

BLOG_fakeDrowningLife insurance scams don’t often command the attention that their bigger cousins — medical fraud and car scams — do. The incidence of fraud in life insurance pales in comparison. But that doesn’t mean there isn’t a lot of fraud in this line of insurance. And cases that do come to light can be highly interesting.

Consider four from this week:
• 22-year-old Jonathan Roth of New York helped his dad fake a drowning off of a New York beach. The older Roth had recently tripled his life insurance and allegedly was hiding out, waiting for his payday. The case surfaced when Jonathan’s dad got pulled over for speeding in South Carolina.

• A $2-million life policy is at the center of a murder case against Andrea Sneiderman, mother of two in Georgia. Police say Sneiderman was looking for an easier, debt-free life. Sohe allegedly convinced her former boss to shoot her husband so she could live off of the insurance proceeds.

• In Chicago, Russell Wasendorf Sr., chief executive of a failed brokerage firm, recently boosted his life insurance to $6.9 million. He attempted suicide after allegations arose the he stole $100 million from his firm. He thought the life payout might help partially make his victims whole, officials surmise. No such luck.

• A lawsuit in the U.K. accused executives of Phoenix Life of paying themselves millions as the company headed towards insolvency. The suit accuses the company of secretly trying to purge billions of dollars of future liabilities. They caused policyholders to lapse or surrender their policies, refused to pay death benefits when policies matured, and canceled the firm’s own policies while keeping the premiums.

With so much life insurance fraud in the news, the New York Alliance Against Insurance Fraud is distributing a half-dozen tips for consumers to help counter these schemes. The tips include:

• Know that these scams increase the cost of your insurance policy;
• Be careful of someone taking out a policy on your life;
• Don’t try to fake your own death. It’s not worth it;
• Beware of “churning and twisting schemes” by insurance agents; and
• If you hear or suspect any type of insurance fraud, report it immediately.
• Don’t encourage or assist anyone thinking of committing fraud. When the scheme unravels, you’ll face grave consequences too.

Good advice. Life insurance is a vital financial product for families and businesses. We all need to do whatever we can to ensure life policies remain affordable and are not used in nefarious ways.

About the author: Dennis Jay is executive director for the Coalition Against Insurance Fraud.