* Action call for New York fraud fighters: Write your legislator 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 June … so it’s urgent that you act 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. Let’s wake up Albany now … it’s our last chance this year. Everyone in New York can send letters — investigators ... attorneys ... consumer advocates. Let’s build a groundswell of support that tells legislators these bills deserve “Yes” votes.
* A bill boosting civil fraud penalties is about to pass the Minnesota statehouse. HF 1443 lets the commerce department 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. Both chambers have passed the bill. They’re ironing out details before sending the measure to the governor for his expected signature.
* The New York legislature continues reviewing legislation targeting drivers who lie about where they garage and drive their vehicles to lower their auto premiums. Two bills (SB 5970/AB 7782) would give the insurance superintendent authority to investigate suspected scammers as a specific insurance crime. Similar bills fizzled in 2016, and the prospects for this year’s versions is uncertain.
* The Orlando Sentinel was livid after bills making it harder for contractors to fraudulently take over claims went belly-up for the 2016 session: “As with gambling, the Legislature kicked property insurance reform down the road for another year. Unlike gambling, however, property insurance affects most Floridians, directly or indirectly. Property owners pay higher premiums. Landlords raise rents to cover those increases. Home insurance costs are the dry rot in the state's economy and quality of life.” The so-called assignment of benefits ruse has let contractors fleece homeowners and their insurers with bogus lawsuits and inflated repairs. The large losses have contributed to higher homeowner premiums in many areas of Florida.
* Action call for New York fraud fighters: Write your legislator now — support strong bills stopping cheating roofers who prey on homeowners and rob insurers. It just takes a couple of quick keystrokes ... as soon as you read this action call. Assembly and Senate bills would: cap repair deposits at 50 percent of the contract … forbid roofers to act as public adjusters unless licensed … forbid contractors to dangle rebates or other perks to lure consumers into hiring them … and let homeowners cancel contracts if the insurer says repairs are unneeded. Sleazy roofers drain consumers and insurers — especially after storms. We must wake up Albany ... and fast-track these bills before the summer slowdown. Everyone in New York can send letters — investigators ... attorneys ... consumer advocates. Let’s build a groundswell that tells legislators these bills are strong medicine deserving “Yes” votes.
* Fraud fighters logged several important state legislative victories during the first quarter. EUOs were successfully defended, statutes of limitation were extended for investigations, more fraud prosecutors were funded, and an airbag-fraud law went onto the books.
The Florida legislature ended its 2017 session with a mixed bag:
• Fraud plans. Insurers now must create plans describing how they’d identify and investigate suspected fraud. Local prosecutor offices with dedicated fraud prosecutors also must report to the insurance department on the effectiveness of their efforts. A companion bill exempts fraud plans from the state’s open-records law.
• Contractors. Legislation targeting contractors who lure homeowners into assigning over insurance benefits after a loss fizzled despite widespread contractor abuses. Consumers could’ve cancelled an AOB, among other protections. The current system allows contractors and attorneys to bilk insurers, argued fraud fighters and the state insurance commissioner.
• Pre-insurance auto inspection. Insurers could’ve opted out of state-required pre-insurance inspection under a bill that stalled. A mandatory program isn’t the most efficient anti-fraud tool, several insurers contented.
* Civil fraud penalties would get a boost under a bill the Minnesota House sent to the Senate. HF 1443 lets the commerce department impose administrative penalties for attempted fraud. Insurers thus won’t have to pay phony claims before the administrative penalty is set. The department also could order scammers to repay insurers for investigation costs. And fraud-bureau investigators would be defined as peace officers so they can obtain and execute search warrants.
* Marketing and installing phony airbags became law in Georgia. Trafficking in junk bags is a misdemeanor. Phony airbags threatens motorist lives. Insurers also are charged for expensive manufacturer’s replacement without knowing the repair shop bought the knockoff at a fraction of the cost on the black or gray market. The Coalition continues to partner with Honda North America in seeking stronger state laws. Georgia is the 15th state to pass a similar airbag law in the last several years.
* North Carolina is moving to protect homeowners from deceitful roofers. HB 816 is roofer-specific. It would require repair contracts to clearly state the consumer can cancel the contract within 3 business days if the insurer denies the claim. Roofers also couldn’t dangle perks such as rebating deductibles to land repair jobs. Nor can roofers take over claims, essentially acting as unlicensed adjusters. “North Carolina should join with the more than 20 states that already passed similar legislation and discourage scam artists from taking advantage of the residents of your state,” the Coalition wrote the bill’s Senate sponsor. The bill has cleared the House, and tracks laws in more than 20 states. The 2017 session lasts until June.
* Ohio also is going after roofers. SB 115 lets homeowners cancel a repair contract if the insurer says the repairs aren’t needed. The contract also must clearly alert consumers of their cancellation right. And contractors must register with the state to do home-repair work in Ohio — this takes the bill beyond most state contractor laws. Ohio also will yank the registration of contractors who lie on their registration material. And roofers who’ve lost their license or registration in another state could be denied Ohio registration. “These fly-by-night operations perform shoddy or incomplete work — crowding out legitimate local businesses — or simply take a homeowner’s money and run,” the Coalition wrote the bill sponsor.
* Funds recovered by insurance whistleblower suits in Illinois would go into a state anti-fraud fund only if the state takes over the action under a bill in the House. Recoveries would go into a general crime-fighting fund if the state lets the whistleblower pursue the suit alone (minus the whistleblower’s share). Funds recovered by insurance whistleblower suits now go to anti-fraud efforts no matter who pursues the cases. The bill would incentivize state and local prosecutors to take on whistleblower actions.
* Time has nearly run out for 2 fraud bills as the South Carolina legislature winds through its final month. One bill would empower the state AG to use grand juries for fraud prosecutions. The bill has stalled for 2 years and will reappear in 2018. The other measure would increase the AG’s budget to fund anti-fraud efforts. Both measures still are working through House and Senate committees. That’s still a lot of ground to cover at this late date. A shortened session and competing legislative priorities mean the bills will have to wait until next year.
* Efforts to create an auto insurance fraud authority in Michigan rest on thin ice while lawmakers debate reforms of the state’s expense-soaked PIP system. The much-needed authority is part of the larger reform bill. The problem is, there’s strong opposition to reducing the state’s generous lifetime medical benefits for people injured in vehicle crashes. That opposition jeopardizes the reforms, and thus the auto-fraud agency. Michigan is the 2nd-largest state without an agency tasked with chasing down insurance scammers (Illinois is the largest). A freestanding bill creating the authority was introduced, though the agency’s fate appears tied to the reform package. The Coalition helped draft the original fraud authority language several years ago. Michigan is left to deal with crash rings. Fake-insurance cards also have left hundreds of Detroit residents driving without required insurance coverage. Some insurers also are selling shaky 7-day policies that could open up scams.
* The Florida House has passed a bill reigning in contractors who lure homeowners into assigning the contract for their insurance benefits to inflate repair claims. Consumers could cancel a contract within 7 business days. Contractors would need to provide insurers the AOB contract within 3 days of signing. And the contracts would include prominent warnings to consumers about the rights they give up by agreeing to the AOB. Finally, attorneys fees could be be awarded in suits if their involvement increased the claim settlement beyond what the insurer would’ve paid without the attorney. The bill is in line with the insurance industry and state insurance commissioner. The Senate now takes up the bill. The legislature has slightly more than a week before adjourning, so the clock is ticking fast.
* Fraud investigators in Kentucky would be exempt from state-required adjuster licensing if they deal solely with investigations. Fraud fighters who also do adjusting or determine claim payments would need an adjuster license. The bill resolves a quirk in state law that raised questions about whether investigators need the adjuster credential. The new law takes effect June 29.
* Corrupt sober homes would be cleaned up by a bill that just cleared the Florida House. Telemarketers for the living facilities for recovering addicts would have to register with the state, and kickbacks for patients would be clearly illegal. Owners, directors and clinical supervisors of treatment center would undergo background checks. Homes would need to be certified, and patient brokering could be punished under Florida’s state RICO law. Driven by huge profits from insurance payout for extensive drug testing and rehab, some sober homes are taking illegal bribes to refer addicts to treatment centers, which bill insurers for unneeded and lucrative testing. Some industry players ply addicts with drugs to keep them in the system. The bill emerged from a state task force that investigated Florida’s epidemic of sober-home abuse.
* The Florida Senate is moving on a bill setting up a grant program to help fund more dedicated fraud prosecutors. “By having dedicated prosecutors, fraud fighters will know that their cases will have a hearing and will move forward,” the Coalition wrote the sponsor. The state Division of Investigative Services would oversee the grants, which will come from the state budget. Exact grant amount, and for how many prosecutors, is being worked out. Insurers also would have to develop fraud plans and identify investigators who’d serve as key contacts with the state. Requiring fraud plans would clearly define the minimum anti-fraud effort expected of Florida insurers. Passage is expected before the legislature adjourns in early May.
* Two fraud analysts would be hired under an omnibus budget bill moving steadily through Minnesota’s legislature. The measure would transfer $1.3 million into the insurance-fraud account. The money would provide ongoing funding for the analysts and their support infrastructure. They’d be housed in the state fraud bureau. The money comes from a state auto-theft surcharge. The House and Senate are working out their versions of the budget bill. A final package should be ready shortly.
* New Mexico closed its 2017 session by enacting penalties for insurers that delay or fail to pay the required fee to fund the state’s anti-fraud program. The fine is $1,000 per month. The annual fee depends on the size of direct-written premiums in the state. The legislature missed a chance to stiffen fraud penalties against wrongdoers. A bill fizzled that would’ve let judges aggregate frauds in determining sentences. Seems health-provider groups feel they’re being targeted by the bill, Coalition sources say.
* “With many lawmakers reluctant to strengthen criminal penalties, maybe it’s time to go after more ringleaders in civil court ...” the Coalition’s Howard Goldblatt blogs this week. “Maybe we should seek more civil actions when the winds of change for tougher criminal penalties blow in our faces. Enacting large civil penalties gets inside the wallets of fraudsters and remove their profit motive.”