INSURANCE FRAUD

(Current as of February 2003)

THE ISSUE IS: Reducing the incidence of insurance fraud.

IT’S IMPORTANT BECAUSE: Insurance fraud, in all its forms, costs the American public hundreds of billions of dollars a year and threatens the affordability of insurance in many parts of the country. It is estimated that insurance fraud adds at least $80 billion to the cost of health insurance and over $20 billion to property/casualty insurance each year.

For many years, insurance companies have worked to address the problem of fraud. For example, the industry formed and continues to fund the National Insurance Crime Bureau (NICB). Additionally, various consumer, insurance, and government groups formed the Coalition Against Insurance Fraud in an effort to reduce fraud through public education and the enactment of appropriate state and federal regulations.

NAMIC POSITION: NAMIC supports efforts to reduce, and ultimately eliminate, insurance fraud, and it works closely with legislators, regulators, consumer organizations, and other insurance trade associations to accomplish this goal. NAMIC also endorses heightened penalties for insurance fraud, and it strongly supports efforts to combat crime by the NICB, Coalition Against Insurance Fraud, Attorneys General, and various fraud bureaus.

NAMIC believes the problem of insurance fraud is primarily a state issue, as states have the responsibility of insurance regulation and are in the best position to detect and remedy fraudulent practices. As a strong supporter of the state-based insurance regulatory system, NAMIC is encouraged that many state legislatures and insurance departments have made addressing fraud issues a top priority.

NAMIC is also closely monitoring the activities of Congress and federal agencies to ensure that new federal laws and regulations, such as the establishment of personal privacy standards, do not inadvertently interfere with efforts to combat fraud.

Posted: Wednesday, February 12, 2003 12:00:00 AM. Modified: Wednesday, August 10, 2005 3:17:48 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.