Turn out the lights in Arizona
If you do fraud for a living and are looking for a nice warm locale to ply your trade, have I got a deal with you! Pretty soon, if things go a certain way, you can move to Arizona and have little worry about the state investigating you for scamming an insurance company. That’s because budget cutters there have their eye on closing down the fraud bureau in the insurance department to save a few bucks.
It’s bad enough that they reduced full-time employees from 14 to 4 a few months back, but now they may chuck the whole unit altogether.
The proposal is only preliminary, and might not be acted upon. But at a time when almost every indicator says fraud is on the rise — and in a state that already has a severe problem — the idea of wiping a fraud bureau off the map is distressing.
The crazy aspect about this move is that the state assesses insurers for the cost of the fraud bureau at the end of each year, so the savings would be minimal. But the damage in building a culture of fraud — not to speak of the increased insurance costs consumers will bear — would be permanent and harmful. The proposal also would eliminate investigations of suspected fraud by insurance agents, adjusters and others licensed by the insurance department. In essence, the state would devolve its regulatory scheme to third-world status.
The National Insurance Crime Bureau, the International Association of SIUs and the coalition have written to Arizona Gov. Jan Brewer urging her to resist this cutback. A joint news release also was issued today. Fraud fighters in Arizona are urged to contact the state’s insurance director and governor to let them know this is an unwise move.
November 12th, 2009 at 2:35 pm
Fighting fraud is part of the claims handling process. Insurance Basics 101 is to put the claimant in a financial condition (prior to loss) and should not be a financial gain then what he or she is entitled to.
Elimination of fraud in Arizona will be devastating, because at the end all of us as consumers will have to accept the increase in Insurance premiums to make up for the fraudulent activity that will increase in leaps and bounds.