PIANJ Praises DOBI Effort to Fight ID Card Fraud

In a comment issued to The New Jersey Department of Banking and Insurance, the Professional Insurance Agents of New Jersey Inc. said it wholeheartedly supports the DOBI’s endeavor to reduce insurance identification card fraud by proposing changes to pertinent rules on identification cards. But, the association says, the proposed approach may inadvertently make it more difficult for law enforcement to detect fake cards and make it harder for consumers to obtain temporary cards.

“Insurance producers process these cards on a daily basis, therefore the proposed changes are of the utmost importance to PIANJ members,” John D’Agostino Jr., PIANJ president, said. “However the approach the department has taken to combat this problem raises some concerns.”

The DOBI’s proposal would allow insurance companies to produce their own ID cards, which may be a favorable move for the companies, but would reportedly create a multitude of looks and formats. PIANJ says this will cause a huge logistical challenge for agents, who will have to produce a variety of different sizes, weights and colors of ID cards, and have to duplicate every anti-counterfeiting method each company chooses. PIANJ expressed concern that companies may develop and issue permanent cards but not temporary cards, which agents issue to customers when insurance is purchased. If agents can’t issue temporary cards, consumers will lack required proof of insurance and be subject to hefty fines.

PIANJ also told the department that a variety of ID cards could cause havoc for law enforcement.

“While producers certainly will encounter difficulties if insurance companies use different ID cards, the difficulties for law enforcement and motor vehicle inspection stations may be even greater,” D’Agostino said. “The new proposal would require law enforcement and motor vehicle personnel to be retrained to recognize a variety—maybe dozens—of ID cards.”

As a solution to these problems, PIANJ suggested that producers be able to use an alternative identification card, such as the standard ACORD 50 form, rather than company cards. This would allow agents to continue to quickly and efficiently meet consumers’ needs for proof of insurance.

Finally, the association suggested that attention be focused on upgrading tools and technology to fight insurance ID card fraud.

“This is a great opportunity for the DOBI to move forward with technologies that can truly combat uninsured motorists and ID card fraud,” D’Agostino commented, referring to an electronic database that could be used to verify insurance coverage. This database was authorized by legislation several years ago and still has not been put into place. “Certainly, the future in uninsured motorist and fraud detection lies in paperless technology.”