Legislative News


* Public adjusters in Virginia soon may have to undergo fingerprinting and federal criminal background checks if a new law is signed by the state’s governor. Licenses would be valid for 2 years, and subject to renewal. The law aims to keep unlicensed public adjusters out of Virginia, and protect consumers from potential fraud. Others insurance personnel such as agents would need checks as well.

* Illinois lawmakers are looking to stop dishonest body shops from repairing vehicles using substandard aftermarket parts, especially if they’re billing for manufacturer originals. Repair estimates, including listing non-original manufacturer parts, must be authorized by the customer in writing. Insurers and consumers continue debating the use of aftermarket parts. Still, bodyshops must accurately disclose parts used to repair vehicles, the Coalition agrees. The bill is now in the state Senate.

* Prescription drug scammers in Georgia may find their names popping up longer and for more anti-fraud purposes in the state’s prescription drug monitoring database. Prescription drug data must be kept for 5 years instead of the current 2 years under a bill in the state Senate. The state AG’s Medicaid fraud unit also would gain full access to the database. Medicaid fraud costs up to $36 billion a year nationally, the GAO estimates.


* Criminal penalties and fines for Kentucky fraudsters would increase substantially under a proposal heard and passed in committee this week. It would:

• Require medical licensing boards in the state to report suspected insurance fraud.

• Protect police crash reports from being purchased in bulk for soliciting purposes.

• Prohibit medical provider self-referrals to medical facilities in which the provider has a financial interest. Kentucky would join many other states, and join the prohibitions of federal law.

“We believe enactment of HB 151 would assist not only in combatting these types of scams but also many other acts and types of insurance fraud activity,” the Coalition wrote state Rep. Bart Rowland, chair of the committee reviewing the bill.

* Efforts are underway again to replace Florida’s fraud-riddled PIP system with a liability-based system. Companion bills in the House and the Senate would abolish no-fault, and instead require bodily-injury and property-damage liability coverage. The new system would take effect Jan. 2, 2021 if enacted. Similar efforts have failed in past years. … A proposal to remove attorney fee recovery from Florida’s often-abused assignment-of-benefits system failed to move forward. Still, it was “temporarily passed,” meaning it can be revived after the legislative session opens March 5.

* Bills would expand funding to boost efforts to reduce auto fraud and theft in New Mexico, and stiffen penalties. HB 529 would create an Auto Theft Prevention Fund. An annual insurer assessment would fund the effort. Fees would range from $1 to $10 per vehicle an insurer covers in the state. The money would fund ongoing and expanded efforts to combat auto fraud and theft in New Mexico. Another bill would make it a felony to dismantle a stolen vehicle, run a chop shop or sell stolen vehicle parts. New Mexico created the Automobile Theft Prevention Authority in March 2018. It’s part of the state’s Insurance Fraud Act. The latest bills would build on the agency’s success in its inaugural year.


* Insurer examinations under oath may be limited by a bill in Washington state. Insurer ability to investigate claims also would be restricted, many insurers say. EUO rights must be spelled out in policies … conducted within 90 days of receiving proof of loss … and be based on a reasonable expectation of questions about the claim. Insurers also must pay the claim, deny coverage or issue a reservation of rights within 60 days after the EUO. And at their own expense, insurers must provide insureds EUO transcripts within 30 days or 48 hours before the next EUO, whichever deadline is shorter. A similar measure failed in committee several years ago. The current version’s initial hearing came on Thursday. The Senator sponsoring the bill spoke in favor. Representatives of APCI and the Washington Defense Trial Lawyers spoke against the bill. After opposing the 2017 bill, the state insurance department’s rep advised the committee the DOI is neutral on the current bill.

* Legislators are proposing an assignment-of-benefits bill in Kansas. The Senate measure would let homeowners assign repair claims to a contractor as co-payee. However, the assignment must be in writing and allow a 5-day period for cancellation. Contractors also couldn’t promise that insurance will fully cover the claim.

* New York continues its fast opening pace with 2 more fraud bills introduced this week in the Assembly. AB 4205 would criminalize being a recruiter for an attorney or healthcare provider. Hiring runners would also be a crime. The bill goes after a wide range of bad actors such as medical rings and bogus slip-and-fall operators. Penalties would range from misdemeanors to felonies for repeated violations. … AB 4347 would grant the insurance department authority to investigate New York drivers who:

  • falsely garage their vehicle in another state or New York locale to illicitly lower their auto premiums.
  • use fake insurance cards or registrations.

  • 2/1/2019

    * Will New York finally make staging accidents a specific crime after years of stalling in Albany? A strongly-worded Senate bill is called “Alice’s Law” — named for Alice Ross. She was a grandmother who died when targeted by a staged crash in 2003. Staging an accident would be a 2nd-degree felony — and 1st-degree felony if an innocent victim dies or is seriously injured. Similar bills have stalled in prior years. Setup crashes are a significant problem that helps raise auto premiums in New York. Alice’s Law could be an effective tool for taking down crash rings, and their leaders. The question is whether last November’s elections will usher in a new dynamic in Albany that pushes this bill into law.

    * Fraud victims could receive a restitution award from the Montana insurance commissioner if a bill is enacted this year. The commissioner would hold a hearing, set restitution, and can award interest. Fraudsters then would pay up, or could appeal to the state courts.

    * New York might see a rise in fraud referrals under a bill allowing whistleblowers to receive up to 40 percent of fraud recoveries. The bill is open-ended about line of insurance and type of scam. The whistleblower must report an insurance ruse that occurred or is about to take place. There also must be a conviction. The referral can go to the state AG, DA or fraud bureau. The judge will make the award, based on the AG’s or DA’s recommendation.

    * Facial recognition software is a hot topic in the world of insurance-fraud investigation. And Minnesota is the 1st state to consider facial recognition to prevent driver-license fraud. Each driver license or ID-card application or renewal would use the tech to help ensure scammers aren’t issued multiple licenses or bogus ID cards. This will help prevent ID fraud, and tamp down related insurance scams. Persons driving with fake IDs don’t normally have legit insurance or insurance cards. Persons with false ID’s often hide their real ID when staging crashes. Fraudsters also steal a person’s ID, create a fake license, and claim injury in accidents by trying to use that person’s auto coverage.


    * Will this be the year New Yorkers finally are protected from storm-chaser scams? Homeowners would gain much-needed protections against shady contractors under a state Senate bill. Among the provisions: Written contracts are required for roofing, siding, gutters and downspouts. … Contractors cannot pay or rebate deductibles. … Consumers can cancel contracts within 3 days. … Contractors must carry liability and workers-comp insurance. … Contracts must disclose the contractor’s liability insurer and policy limits. Partisan bickering has stalled reforms for several years despite widespread contractor scams of homeowners after storms. The bill is before the state Senate’s Consumer Protection Committee. The Coalition is part of an alliance pushing for passage.

    * Washington state legislators are moving to fund the fraud bureau with a new policyholder surcharge to replace regular budgeting. The goal is to add more investigators. Projected operating costs would determine the assessment, and each insurer would pay based on its premium volume in the state. Excess funds would roll into the ensuing year, lowering that year’s surcharge. Insurers can show policyholders the specific policy surcharge, or just roll it into their rates. The assessment would be effective July 1. The bill has insurer and consumer support, and has passed the House Consumer Protection and Business Committee.

    * A Coalition consumer member is calling for federal legislation to protect consumer data privacy while avoiding pre-empting state laws. The Consumer Federation of America issued the action call. CFA also favors creating a new data privacy agency … limits on collection, use and disclosure of sensitive personal data … and preventing manipulative marketing. The Coalition also is monitoring important and recent privacy laws in California, South Carolina and Ohio. The Coalition supports protecting consumer privacy — while preserving full access to data and other info needed to fight fraud. We’d also work to avoid inadvertent privacy requirements to disclose this data while investigations are ongoing.

    * An automobile-fraud authority would be created in Michigan under a Senate bill. The agency would be overseen by a board of insurers, state officials, law enforcement and the public. The authority would work closely with state police, maintain detailed metrics, and file an annual report with the legislature. Regulatory fees and insurer assessments would fund the unit. The Coalition is determining how the agency would interact with the multi-line fraud bureau the outgoing governor created by executive order late last year. … The new state AG also named Detroit anti-fraud attorney Keisha Glenn to the newly created position of Auto Insurance Fraud Specialist.