Strong laws can help prevent and punish insurance fraud

On Behalf of | Feb 21, 2015 | Insurance Law

One of the difficulties of stopping insurance fraud is the multiplicity of forms that it can assume. From staged auto accidents to fraudulent medical bills, insurance fraud is bounded only by the inventiveness of the fraudsters.

Insurance companies must remain ever vigilant to fake or inflated claims, but it can also help if the state has laws that impose severe penalties for insurance fraud and have other supporting laws that provide strong tools to combat the plague that costs insurance companies and their millions of policyholders every year with higher premiums.

In legislatures across the nation, bills have been introduced to aggressively deal with various aspects of insurance fraud.

One tool to fight fraud is to allow asset forfeiture to be used against insurance fraud rings. With asset forfeiture, a case is filed against the asset that was obtained by fraud or the proceeds received as a result of the fraud. It is a civil action, and there is no need to secure a criminal conviction against those responsible for the fraud before seizing the assets.

In addition to recovering the assets from the fraud, it would drain away much of the incentive for committing the fraud in the first place, as it makes it much more difficult for the fraudsters to profit from their activity.

Medical fraud remains a significant problem, and bills are being considered in numerous states to crack down on medical mills and other medical providers who inflate bills or charge for service not rendered.

Fraud related to auto repair is also rampant, and our neighboring state of Mississippi is considering making installation of a counterfeit air bag a specific crime. In Louisiana, air bag fraud is already a crime.

The impact of insurance fraud can be reduced with the help of strong laws., “GEICO applauds states taking on insurance fraud in 2015,” February 18, 2015