* The calendar says August, yet new legislation dealing with contractors abusing assignment of insurance benefits already was filed for 2018. Florida lets homeowners assign their insurance benefits to contractors who repair damaged homes after storms. That lax environment has fueled a surge of abuses that are driving up homeowner premiums in many areas of the state. Contractors are duping homeowners in letting contractors take effective ownership of the claim — elbowing the homeowner out of the picture. The contractors then freely inflate repair claims, and often sue the insurer behind the unknowing homeowner’s back. A bill blocking contractor abuses was halted this session. Florida’s new CFO compares the AOB issue to a “Category 5 hurricane.”
* High temperatures, wildfires and thunderstorms have caused large home damage in Arizona thus summer. Many homes were flooded by rain runoff from mountains deforested by fires. Their homeowner policies may not cover the water damage. Dishonest public adjusters are advising homeowners to file bogus smoke-damage claims instead. The adjusters pocket their 10-30 percent commission from the settlement, then often walk away without ensuring the repairs are completed. The Arizona fraud unit is alerting homeowners about adjuster schemes, and is using Coalition consumer alerts about shady adjusters to encourage honest claims. It’s too early to determine if a legislative fix is needed during the 2018 session.
* The Coalition’s government affairs committee meets in mid-September to finalize our 2018 legislative agenda. Please contact Howard Goldblatt if you have ideas for issues and states to consider.
* Fraud fighters had a high-profile week of influence — the U.S. Senate and 2 national organizations took up this $80-billion crime. The Coalition was at the table with a voice.
• U.S. Senate. Thwarting America’s fraud epidemic will require a concerted public-private effort, Dennis Jay urged a Senate subcommittee in testimony Fraud News Weekly readers saw just a week ago.
• State regulators. That call to action and strong messages by colleagues who also testified were prime news for the NAIC’s anti-fraud committee just a week later. We also must stay alert to what’s happening in the courts, the Coalition added. Datamining an Ohio suspect’s pacemaker and defending EUOs in Kentucky are important cases helping reshape the fraud fight, the Coalition also said in a legal update. … Note also the NAIC webinar for government investigators on mining social media for clues, Sept. 27.
• State legislators. Fraud moved well up the ladder for state legislators — possibly opening new pipelines for fraud legislation. Their national organization began studying this crime as part of a new insurance task force. Insurer use of technology and consumer attitudes about fraud would be instructive issues for their December meeting, the Coalition recommended to the National Conference of State Legislatures.
* A pathway for turning the corner on insurance fraud — delivered straight to the U.S. Senate by the Coalition … New York, Florida and Ohio are trying to keep sleazy contractors from duping desperate homeowners. Any progress? … What’s keeping Michigan from creating an automobile-fraud agency nearly everyone agrees the state urgently needs? Plenty of answers and insights in the newest issue of Advocate — the Coalition’s online quarterly covering all things legislation and regulation
* Can the feds and private insurers partner against fraud yet keep the time-honored firewall separating them? “Going forward, Congress and the White House should keep in mind three mantras,” the Coalition’s Matthew Smith urges in this week’s FraudBlog. “First, stay keenly aware of the high cost insurance fraud imposes on consumers and the American economy. Second, make sure any federal legislation meets the ‘do no harm’ test of not unduly burdening or hindering state anti-fraud efforts. And third, be vigilant in identifying where federal involvement will help combat fraud at all levels.”
* Turning the corner on insurance fraud requires stepped-up prevention and deterrence against schemes such as organized rings that are spreading, the Coalition told a key Senate subcommittee today. “Our nation will never arrest or convict its way out of insurance fraud. More efforts must focus on prevention and deterrence. Public-outreach messages can help convince consumers they’ll pay a high price for cheating on insurance,” executive director Dennis Jay told the Subcommittee on Consumer Protection, Product Safety, Insurance & Data Security. … Collaboration among private insurers and the public sector is crucial as well, Jay added. One model is the Healthcare Fraud Prevention Partnership (HFPP). Public and private health plans and others share data about medical schemes. Yet property-casualty insurers aren’t allowed because of HIPAA restrictions. “This is a lost opportunity because many medical providers who defraud property/casualty insurers also file false claims against government health programs, and vice versa,” Jay said. Sen. Jerry Moran (R-KS), chair of the subcommittee said he was interested in learning more to find a legislative solution.
* Life insurers would have tighter standards for selling policies on juveniles in Maryland with a measure undergoing early discussions in Annapolis. A state delegate and the Maryland Insurance Administration are crafting legislation for 2018 session, according to Coalition sources. The language so far is based on a Washington state law protecting juveniles from being murdered by parents or guardians for life insurance. The Washington law doesn’t define the guidelines. It simply requires insurers to craft them. The concerns in Maryland surfaced after a Northern Virginia man murdered his 15-month-old infant for more than $500,000 of life insurance.
* Why wait for a conviction before recovering stolen insurance money? That’s what Kentucky insurers are asking as the state insurance-fraud advisory committee continues meeting to set its 2018 legislative agenda. Current law requires a schemer to be convicted before insurers can go after their money. An evolving draft removes the provision. What will take its place is being worked out. The Coalition is a member of the advisory committee.
* The California Senate continues working on a bill clarifying that liens filed by medical providers convicted of workers-comp fraud are stayed from the conviction date until adjudication. The goal is to keep liens in place until appeals are exhausted. The Assembly passed the bill in late May.
* Thwarting runners hired by crash rings will be on the docket as the National Conference of Insurance Legislators meets this week in Chicago. The lawmakers will vote on re-adopting a Coalition-crafted state model bill making it a specific crime to recruit passengers for staged-crash rings. Drivers would have their licenses suspended for using a vehicle to commit fraud. NCOIL first adopted the model in 2006. The Coalition assisted NCOIL in writing the model, which also will be voted on for potential adoption.
* The Coalition’s government affairs team is working with members to identify fraud issues to pursue in states for the rest of this year, and the 2018 sessions. If you have suggested states and issues, please contact Howard Goldblatt.