Legislative News


* Four fraud bills remained on the table when the New York legislature adjourned this week. This is typical of the 2-year cycle often needed to ensure enactment into law. All bills cleared one chamber — mostly the Senate. This progress should speed up our renewed efforts for 2018. The challenge is to overcome the Assembly’s recent history as a graveyard of fraud bills.

Roofer cons. Consumers would’ve gained protections against crooked storm-chasing roofers. The Coalition worked with an alliance of consumer groups, insurers and businesses. We made progress when the bill cleared the Assembly. The Senate, however, sat on the measure. At least the bill is well-positioned for a 2018 run.

Fake garaging. A bill authorizing the Department of Financial Services to ramp up pressure on drivers who misrepresent where they garage and drive their vehicles has cleared the Senate. The measure stalled in the Assembly.

Insurance cards. A bill setting criminal penalties for marketing fake auto-insurance cards passed the Senate. The Assembly stayed silent.

Immunity. The Senate passed a bill expanding the state’s immunity to allow more exchange of case info with NICB. The Assembly was silent yet again.

* Michigan’s legislature has a 2nd bill creating an auto-fraud prevention authority. The agency would fund investigations and prosecutions of auto scams. Both bills are similar. The agency also is embedded in a large no-fault PIP reform package. That appears to be the main engine driving the agency proposal. Similar efforts have flamed out in past years because the reform bills were too bulky to pass. The Coalition thus supports pursuing the much-needed agency as a stand-alone bill. In fact, key legislators show growing willingness to consider the agency as a separate proposal, Coalition sources say. We helped craft a fraud-authority bill several years ago that forms the basis of the current measures.

* New Jersey legislators seek to protect innocent auto crash claimants when a policy is denied or voided due to the other driver’s fraud. The bill’s chances of moving are small. It’s expected to resurface for another go in 2018.


* Pressuring workers-comp scammers in Texas received a big boost from a new law setting up an anti-fraud unit in the state’s workers comp commission. The agency also gains subpoena power to seek evidence and testimony, and has authority to assist with investigating suspected cons. Fake injuries and premium scams are included. Listen to an interview with the Texas workers comp commissioner on the new law’s impact.

* The Kansas insurance department will refer all cases to the state AG for potential prosecution under a new law that kicks in July 1. The insurance department also will transfer funds for the AG to fund prosecutions. The AG gains more leeway in prosecuting fraud.

* Fraud fighters scored several successes in state legislation, the Coalition recounted in an update at the organization’s midyear membership meeting Wednesday in Baltimore:

  • Washington. EUOs were protected when the Coalition helped block legislation restricting how insurers could interview claimants. The bill would’ve increased fraudulent payouts and thus raised costs for consumers and insurers, the Coalition contended. The bill died in committee;
  • Virginia. Two new dedicated fraud prosecutors were funded from the budget of the state police. This will increase the state’s ability to focus more pressure on fraudsters. The Coalition partnered with NICB and state insurers in the effort. The prosecutors could begin as early as July 1; and
  • Kentucky. Shady providers were blocked from illicitly accessing police crash reports by pretending they were journalists who warranted legal access. Scammers created fake trade journals for medicine or legal. A new law prevents fake trade journals from getting the reports. Consumers also gained protections against deceitful contractors thanks to a separate law.

  • 6/9/2017 * The New York Senate passed a bill that would let the department of financial services investigate drivers who use an out-of-state address to register and insure their vehicle. False garaging is a bid to illegally lower auto premiums. “Driving in New York while saying you live in another state may lower one’s insurance premium, but it does not change the risk that New York drivers face,” the Coalition wrote the sponsor. “Honest consumers end up subsidizing insurance premiums of people who cheat.” The Assembly may pursue the bill as Albany races to adjourn late this month, according to Coalition sources.

    * There’s a hitch in the bills protecting consumers from predatory roofers in New York. The state building contractors want to gut the protections. This adds to the urgency of a strong upswell of “vote yes” letters to your home-district legislators. “New York is in the crosshairs of enacting roofer reforms before Albany shuts down soon. … New Yorkers should write your senators now — urging your home-district legislators to support this much-needed reform bill,” Howard Goldblatt blogged this week. To send a letter — just visit the action site and follow the quick prompts.

    • Progress update: The Coalition and our allies have launched a last-ditch lobbying push in Albany. The Assembly majority leader joined as cosponsor after his counsel met with Goldblatt. The Assembly bill then passed this week — great news. The alliance is meeting with other legislators to secure support in the Senate, where the bill is docketed. Just 2 weeks or less remain before Albany closes for the year.

    * Texas is about to welcome a new workers-comp fraud unit. A bill creating a comp effort in Texas is heading for the governor’s signature after both chambers unanimously approved the measure. The state comp commission will gain authority to set up the unit. The agency also will gain subpoena power to seek evidence and testimony. The new law targets injury and premium scams as specific crimes.

    * California legislature is working on 2 comp bills:

    • The Assembly passed a bill that would authorize the workers-comp division to work with other state agencies to combat comp fraud. Efficiently sharing data within the division and among agencies also is part of the mandate. The comp division also would be the clearinghouse for state anti-fraud activities. 

    • The Assembly also booked a bill clarifying that liens filed by medical providers convicted of comp fraud are stayed from the conviction date until adjudication.


    * Time is running out in New York. Write your legislators today — support strong bills stopping dishonest roofers who prey on homeowners and insurers. You just need a couple of quick keystrokes. The statehouse closes in mid-June … so we have to write now. Assembly and Senate bills would: limit repair deposits to 50 percent of the contract … forbid roofers to act as illegal public adjusters … forbid contractors to dangle rebates to lure consumers for repair jobs … and let homeowners cancel contracts for unneeded repairs. This is our last chance for 2017. Everyone in New York can send letters — investigators ... attorneys ... consumer advocates. Let’s tell legislators that clamping down on shady roofers deserves “Yes” votes. If you have colleagues in New York, please forward this message and link.

    * A bill hiking penalties for staging crashes crashed in the Nevada legislature. The AG pushed AB 15, which targeted crash rings operating in the Las Vegas area. Yet the state judiciary believes broader criminal-justice reforms aimed at lightening certain criminal penalties is needed. Stiffening fraud penalties in this environment thus is a nonstarter, Coalition sources say. A tension between the legislature and AG also is blocking his legislative initiatives. All this means a recipe for stalled insurance reforms — letting crash rings keep on crashing.

    * Minnesota has a new law boosting civil penalties for insurance fraud. The commerce department can impose civil fines for attempted insurance crime. Adding the word “attempted” means insurers won’t have to pay phony claims before the civil penalty is set. Scammers also would have to to repay insurers for investigation costs. And fraud-bureau investigators would be defined as peace officers … so they can obtain and execute search warrants.

    * A bill died in Florida that would’ve squelched schemes by sleazy contractors who lure homeowners into assigning over their insurance benefits — handing them control of the claim. Windshield repair shops are doing it as well in Florida. “On a larger scale, however, the costly repercussions in property insurance of Florida’s terrible assignment of benefits scheme should serve as a cautionary tale for the auto market,” remarks an editorial in the Tampa Bay Times. “Changes to the law are needed to fix this expensive problem, but lawmakers ignored it again this spring. How much longer can they do nothing?” In the meantime, property insurance rates in the state already are rising.


    * Montana enacted 2 fraud laws:

    Clarifies the statue of limitations for insurance felonies. Prosecutions must begin within 5 years after the suspected crime was committed, and 3 years for misdemeanor charges. The insurance department also gains authority to wield civil penalties against fraudsters. The statute of limitations will start 2 years after the department discovers the violation, with a max of 5 years after the crime’s commission; and

    • Allows insurers to consider claims that led to criminal or civil charges by an insured or applicant when considering renewing or writing a new policy. This amends the state’s unfair claims practices act.

    * The Texas workers-comp commission is about to gain authority to set up a fraud unit. The legislature is verging on sending the governor HB 2053. The unit would investigate, assist prosecutors, and have subpoena authority to compel testimony. The workers-comp commission was set up as a separate entity from the insurance department. It still needs an enforcement unit to tackle the tide of injury, medical and premium-comp scams in the Lone Star state.

    * Crash rings, crooked agents and airbag scammers have aroused the ire of one of America’s respected consumer groups. The Consumer Federation of America is a founding member of the Coalition. CFA adopted a proposal that places consumers squarely in support of anti-fraud efforts. “CFA encourages states to enact strong laws that cover anyone who defrauds, including medical professionals, lawyers, insurance companies and agents. … CFA supports regulations requiring insurance companies to actively seek to deter, detect and investigate fraud by hiring well-trained investigators and to report all suspected fraud to law enforcement.” CFA was updating its positions on insurance and asked the Coalition for wording to adopt for anti-fraud stances.