More Insurance company fraud

Author Subject: More Insurance company fraud
Del Posted At 16:08:58 05/09/2000
Two HMOs face fines in ongoing claims probe

TALLAHASSEE - As part of an ongoing probe of HMOs, Florida Treasurer and Insurance Commissioner Bill Nelson has announced that two of them face tens of thousands of dollars in fines for not promptly paying claims - and that several others can expect similar penalties. For more information, click here.


Spying incident leads to charges against insurer

TALLAHASSEE -- Florida Treasurer and Insurance Commissioner Bill Nelson has charged one of the state's largest property insurers with attempting to "subvert, manipulate and undermine" insurance regulators and has accused its management with showing a "lack of trustworthiness" when it hired a private investigator to spy on a DOI employee. For more information, click here.


Through extensive research, I've noticed one statistic that stands out. When it comes to workers comp. fraud, an overwhelming percentage of effort is made by individual states to investigate worker fraud, yet very little, or in most cases no effort, is made in respect to employer and insurance company fraud. In fact, only Florida seems to be making any effort.

January 25, 2000


Insurance cases result in more than $52 million restitution

TALLAHASSEE – Florida’s Department of Insurance leads the nation in fraud prosecutions and criminal convictions, according to a new study of the nation’s 44 insurance fraud investigation bureaus.
Conducted by the Coalition Against Insurance Fraud, the study looked at actions taken in fiscal year 1998, when the Department’s Division of Insurance Fraud presented 471 cases for prosecution and contributed to 362 criminal convictions. Florida also held the lead for criminal convictions in the Coalition’s previous study of fiscal year 1997. The state’s fiscal year begins July 1 and ends June 30.
"Over the past four years," said State Treasurer and Insurance Commissioner Bill Nelson, "our convictions resulted in more than $52 million in court-ordered restitution on behalf of consumers and insurance companies."
Since his election as Insurance Commissioner in 1995, Nelson has given high priority to fighting insurance fraud. Florida's insurance department is one of the few to have a sworn law enforcement division, and Nelson hired a director with strong law enforcement credentials. He also roughly doubled the number of investigators.
Additionally, Nelson requested the impaneling of a statewide grand jury to investigate workers' compensation fraud, the collapse of several self-insurance funds, and other forms of insurance fraud. He also persuaded the Legislature to enact new laws strengthening the penalties for certain insurance fraud crimes and giving prosecutors expanded use of the state's racketeering laws in insurance fraud cases.
The Insurance Department earned a Davis Productivity Award, one of state government’s highest public service awards, for a 1997 sting operation dubbed "Operation Cheap Trick," which targeted a deceptive car insurance sales tactic known as sliding. The operation resulted in racketeering-related charges against 30 defendants and an insurance company. The Department gave the Davis award money to the American Red Cross’ Hurricane Relief Fund.

NY does mention briefly, along with other types, insurance company fraud. Their brochure (Adobe .pdf) is here. It says:

    Insurance Carrier Fraud

Occurs when a claims representative purposely misrepresents the truth in order to either deny or support a claim; or offers or accepts any form of consideration for the referral or settlement of a claim.

    Examples of Carrier Fraud

Accepting a gift from a doctor’s office in exchange for an implied promise of patient referrals.
Altering the evidence in a claim in order to support a denial of benefits.

Of course, I've also seen overwhelming evidence that the administrators of New York's work comp system are very corrupt. This includes the WC Director who's charged in a RICO complaint.

Last year at an MLAC meeting, insurance companies proposed an increase in criminal and civil penalties for claimant (worker) fraud. What was missing from this proposal was ANY FINE OR PENALTY WHATSOEVER FOR FRAUD BY INSURANCE COMPANIES.

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