Legislative News


* Dishonest roofers may find Missouri a far-less-friendly state in 2019. Contractors can’t work in Missouri if their license was revoked or suspended by another state, under a prefiled bill for 2019. Contractor registration also would be allowed. Safeguards such as mandatory liability and workers-comp coverage would be included as well. Oversight would be vested in the insurance department.

* Prohibiting surprise medical billing … increasing anti-fraud funding … adding 6 new investigators … and enacting a consumer privacy law. These are key anti-fraud legislative goals for the Washington insurance department in 2019. The investigators reflect the need to handle an increase in fraud referrals. The investigators would be funded from the annual insurer assessment. The cybersecurity bill would set minimum standards for insurers to protect sensitive data — especially policyholders — from cyberattacks. These goals reflect an emphasis both in ramping up anti-fraud efforts, and defending consumers. The Coalition will support these bills in 2019.

* Ohio is poised to become the 2nd state to adopt the NAIC’s Model Cybersecurity Act. The full model is part of a parent bill about insurance rating agencies. The bill has cleared the state House and Senate. It now heads to the governor. His expected signature could make increased cybersecurity the state’s law this year. Expect other states to follow with cybersecurity bills when legislators convene in the new year ahead. 

* Montana insurance-fraud victims will have more rights to repayment if a newly posted bill becomes law in 2019. The insurance commissioner could award restitution to a harmed party … fraud victims could bring civil suits for recovery … and the commissioner could revoke any licenses if the liable party fails to make restitution. The bill is championed by the State Auditor.


* A prefiled Assembly bill would boost penalties for staging auto crashes in Nevada. Crashers would get 1-20 years in prison plus a fine up to $50,000 under the bill championed by the state AG. Nevada has seen a dramatic rise in staged crashes, especially in the Las Vegas area. Stepped-up prosecutions are a major focus of the AG. Stiffer penalties would sweep more ring members off the streets longer, deter would-be crashers and give the AG more leverage in plea talks.

* Consumer insurance-fraud victims in Montana would receive civil and criminal recoveries under a bill spearheaded by the state auditor. The bill would revise the state’s law impacting consumer insurance restitution. The draft should be released in early January, before the legislative session opens.

* No-fault fraud reforms to help offset the nation’s highest auto premiums still have life in the waning days of Michigan’s 2018 session. A new Senate bill would create an auto-fraud authority and catastrophic claims board to oversee high-risk losses — including fraud. The bill doesn’t address how the auto authority would mesh with the broader fraud bureau the outgoing governor created in September. Still, legislating the auto agency would give it more staying power and budget security than the governor’s administrative order creating the state fraud unit.

* Also in Michigan … Auto and workers-comp insurers are paying ever-higher claims for drugs during injury treatments. A state House bill would offer relief. The measure would tighten oversight of pharmacy benefit managers in the state. The insurance department would oversee PBMs — including imposing fines and revoking licenses. Drug prices offered through PBM-managed plans also would be uniform. PBMs would be state-registered, and pay a fee to help fund oversight. Both bills face uphill battles with only weeks remaining in the 2018 session. Expect them to return in 2019 if the clock runs out for this year.


* All stakeholders must come together to protect Florida consumers from insurance scams if the Sunshine State is to change its deserved reputation as the nation’s epicenter of insurance scheming. That was the message the Coalition’s Matthew Smith told business leaders, state legislators and insurance executives at the Florida Chamber Insurance Summit in Miami this week. Stopping widespread no-fault crash rings, shady contractors and complex medical rings were among the state’s chief fraud problems, panelists agreed. Insurers, personal-injury attorneys, contractors, physicians, body shops and other stakeholders thus must abandon inflexible self-interest. Let’s reach solutions based on common sense and common ground, Smith urged. Especially … stakeholders must work with newly-elected legislators when the statehouse opens next spring in Tallahassee. Florida has some of the nation’s unhappiest insureds, so the time is right for stepped-up efforts against scams, Smith said.

* Alabama enacted a contractor-licensing law to protect residents against bunko artists in 2018. That welcome measure was among the 30 fraud-related laws enacted this year, the Coalition’s Matthew Smith told Claims Journal in a podcast recapping the legislative year for fraud fighters.  “When you look at the potential for hurricanes, tornadoes, that face those types of states, we are very much supporting those types of laws that protect against the storm chaser-type of frauds,” Smith said.

* A bill in Ohio would better protect consumers against fake health plans. A group of state Senators has pre-filed a bill requiring health plans to disclose claim info requested by policyholders. Within 14 days of request, health insurers would have to provide data such as net amounts paid for claims each month, reserves to pay future claims, and potential catastrophic claims. Shady health plans often operate without enough reserves or funding. Consumers are left with unpaid claims and no coverage. Disclosing key financial and risk data may help protect consumers from sham or under-funded healthcare plans. Policyholders also are more-informed and can better detect a scam plan before they buy. Consumers thus make better decisions about buying and renewing their health coverage.


* The landscape for state insurance regulators is clarifying after the midterm elections. Four states elected new commissioners: California, Oklahoma, Kansas and Georgia. In California, state Sen. Ricardo Lara (D) is the new top regulator. He defeated former commissioner Steve Poizner. Expect plenty of action in California next year. Wildfire losses will place insurers on high alert for scams by contractors and homeowners. Also watch for more debate over its nationally watched new privacy law. … In Oklahoma, Glen Mulready (R) replaces John Doak, who also chairs the NAIC Antifraud Task Force. Mulready has long experience as a health-insurer exec. He’ll oversee the state’s nationally known annual Tornado Summit in 2019. … In Kansas, State Sen. Vicki Schmidt (R) pulled down 63 percent of the vote. While hot fraud topics have yet to surface for 2019, Schmidt’s legislative background suggests a willingness to consider strengthening state anti-fraud laws … In Georgia, deputy commissioner Jim Beck (R) was elected as new insurance commissioner. He replaces Ralph Hudgens, who has served for the last 8 years.

* Tragically, the California wildfires are timely. Steering consumers through disaster claims — while preventing scams — will be a leading goal at the NAIC’s meeting this weekend in San Francisco. The NAIC is developing an all-purpose consumer claim guide. Thwarting contractor and homeowner scams will reflect input by the Coalition’s Matthew Smith, who’s a consumer rep and advisor to the Antifraud Task Force. Other fraud concerns at the meeting: Weakened federal oversight of Association Health Plans … cybersecurity laws to protect consumer privacy and data … reigning in abusive pricing by Pharmacy Benefit Managers.

* The groundswell of calls for greater protection of consumer privacy continues gaining steam. The outcomes could affect fraud fighter access to vital data for investigations. More than 34 groups are calling for tougher federal and state protections of consumer privacy. Congress and states must prohibit the misuse of personal data, the groups urge. Privacy and data laws should protect civil rights, prevent discrimination, and give consumers redress for privacy violations. Fraud fighters rely on securing electronic data to take down individual scams and organized rings. Analyzing patient treatment and billing patterns, for example, is crucial to breaking open medical rings. The NAIC has a new model cybersecurity bill, and NCOIL plans to adopt one of its own. California also has enacted strong privacy legislation. These are forerunners of more privacy bills that should show up quickly in 2019. The Coalition plans a visible role. Fraud investigations must be protected, while preserving consumer privacy rights.

* “Tis the season” … for pre-filing state fraud-related bills. State legislators are starting to pre-file legislation for 2019. A Texas bill would help curb fraudulent telemarketing, which often happens after auto accidents. Lawyers and chiros buy police reports, then cold-call victims for “injury” treatment at shady clinics. Phone spoofing of consumers with dodges such as phony caller IDs and phone numbers would be prohibited. Convictions would be just misdemeanors — though a step in the right direction.


* Imagine fraud suspects reviewing SIU case files at any point during an investigation. Or insurers being fined up to 4 percent of gross revenue for violating privacy laws. Those are 2 upshots of debates over consumer privacy rights that may dramatically impact fraud fighting across all lines in 2019. Privacy bills will be hotly debated in states and on Capitol Hill. Consumer advocates want to protect personal data. Yet overly broad privacy laws may limit abilities of fraudfighters to report and share case info. Amendments are already flowing in to change California’s ground-breaking new privacy law. The NAIC continues to push passage of its cybersecurity model act. South Carolina was the first state to adopt the model last spring. Capitol Hill also is poised. Far-reaching legislation would create minimum privacy and cybersecurity standards. A national “Do Not Track” system would restrict data-sharing. Consumers also could review personal info collected about them. Insurers and their SIUs would be subject to the provisions. Balancing the need to combat fraud and protect consumer privacy remains a Coalition priority.  

* Are Pharmacy Benefit Managers gouging insurers and consumers with drug prices that are abusively, and even fraudulently, high? Such concerns will be on the minds of insurance commissioners next week in San Francisco. Critics contend: PBMs overcharge insurers and consumers for meds. They keep consumer drug costs high by avoiding lower non-insurance options so PBMs can bill insurers 3-6 times or more higher than what consumers could pay directly for meds. The NAIC proposes a model act to better control PBMs. Just three PBMs control at least 70 percent of a prescription-drug market in which insurers and consumers will pay $360 billion this year. There’s a lot of debate over PBM business practices. Ohio already has moved to save consumers money by requiring more disclosure of affordable prescription price options.

* New Jersey has banned new health plans authorized by the Trump Administration, citing vulnerability to scams. “While the Trump Administration is working to promote skimpy health plans and junk insurance, we want to provide clear guidance to industry and the public that these plans, which fail to meet the standards of New Jersey law, are prohibited in the state,” the insurance department says in a bulletin. Banned are so-called Association Health Plans and short-term coverage. They’re centerpieces of the Administration’s effort to gut the ACA and make it easier for people sign up for health coverage. Loose standards for creating AHPs could encourage scam artists to promote fake plans, the Coalition says. The stripped-down short-term plans are mostly junk insurance, critics also contend. Fake health plans similar to AHPs have left tens of thousands of consumers without coverage. Several states have banned or limited the the Administration’s new health plans. Other states let them operate.