California Report Details How to Reduce Fraudulent Insurance Claims

Following a meeting with his Advisory Task Force on Insurance Fraud, Blue Ribbon Review Committee, California Insurance Commissioner Steve Poizner announced that he will implement five actions to help reduce fraudulent claims, including creating a fusion center for insurance fraud investigations so law enforcement can share information more efficiently and quickly to identify emerging trends and crime patterns.

“Insurance fraud is not a victimless crime,” said Commissioner Poizner. “The costs are passed onto consumers to the tune of $500 a year for every man, woman and child and that’s why I have made fighting insurance fraud one of my highest priorities.”

The Task Force also released “Reducing Insurance Fraud in California,” a report that detailed a number of recommendations to reduce fraudulent claims in California. While many of the recommendations require regulatory changes, legislative action or additional funding, the commissioner was able to adopt a number of recommendations immediately, including:

– Create a fusion center for insurance fraud investigations so law enforcement can share information more efficiently and quickly to identify emerging trends and crime patterns.

-Better training for the Special Investigation units (SIU) on the recognition, documentation, and reporting of suspected insurance fraud claims.

-Recognize insurance companies that go beyond compliance for their greater commitment to fighting fraud.

-Increase the outreach efforts of CDI about the consequences of fraud, how the public can recognize it and report it.

-Adopt more aggressive recruiting and retention practices, including pay upgrades, so that CDI can recruit and retain qualified investigators.

The Task Force was created by Commissioner Poizner to bring together public and private sector experts to develop innovative methods to combat insurance fraud. The inaugural Task Force meeting was held in May 2007.

“I can and will immediately enact five of these recommendations and have directed my staff to examine the remaining proposals to determine what steps need to be taken next,” Poizner said.

Blue Ribbon Review committee members included Mike Brown, California Business, Transportation & Housing Agency chief deputy secretary for public safety; Frank Scafidi, National Insurance Crime Bureau president and CEO; Steve Cooley, Los Angeles County district attorney; Bonnie Dumanis, San Diego County district attorney; Richard Holober, Consumer Federation of California executive director; The Honorable Harry Low, Justice (Ret.), California Appellate Court and former California Insurance Commissioner; John McGinness, Sacramento County sheriff; Tom Rankin, California Labor Federation, AFL-CIO, president emeritus; Jan Scully, Sacramento County district attorney; David Snowden, City of Beverly Hills chief of police; and Allan Zaremberg California Chamber of Commerce president and CEO.

A copy of the report can be found at www.insurance.ca.gov.

Source: CDI