Ind. Fraud Bill May Get Facelift

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Strengthening Indiana’s weak insurance-fraud law will raise Indiana’s fraud statute to a par with other states, the Coalition Against Insurance Fraud told key legislators in testimony recently.

“This bill will help reduce pressure on premiums, and reduce a crime that is harming consumers and businesses around the state. The bill should be passed this year without further delay,” the Coalition’s director of government affairs Howard Goldblatt told the committee.

According to the Coalition, Indiana’s insurance-fraud law is one of the weakest in the U.S. because it covers only bogus claims, and imposes just one penalty for all insurance cons, no matter how much money is stolen.

HB 1403 would make premium and application scams specific insurance crimes in Indiana. It also would increase jail terms to eight years, up from the current one year, for insurance frauds that steal more than $2,500.

Some 45 states have insurance-fraud laws on the books, reports the Coalition. But Indiana’s law is one of just a handful that doesn’t address premium and application scams, two significant sources of fraud losses, Goldblatt said.

“The coalition also strongly believes the criminal penalty should depend on the amount of the fraud. This change will give more teeth to anti-fraud efforts in the state,” Goldblatt added.

Massachusetts passed a tough bill cracking down on widespread staged accidents late last year, and there are widespread projections that the new law will help reduce upward pressure on auto premiums, Goldblatt noted.

“We would expect a similar impact on premiums for various lines in Indiana if the state boosts its own anti-fraud efforts with a tougher law,” Goldblatt said.

HB 1403 will give prosecutors better tools to convict all insurance swindlers. The threat of longer jail sentences and larger fines also will help deter many would-be con artists, Goldblatt said.

The bill has broad support in the state, and was initiated by the Indiana chapter of the International Association of Special Investigation Units.

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