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Vermont Lawmakers Pass Bill Making Insurance Fraud a Specific Crime

NAMIC Supported the Legislation

INDIANAPOLIS (May 17, 2006) — Vermont lawmakers have approved industry-supported legislation to make insurance fraud a specific crime.

Passage of the bill (H-150), which is expected to be signed by Gov. Jim Douglas, is the culmination of a multiyear advocacy effort during which the National Association of Mutual Insurance Companies (NAMIC) provided testimony and met with lawmakers in support of the proposal.

"Passage of this bill recognizes the serious nature of insurance fraud," commented Paul Tetrault, NAMIC’s state affairs manager for the Northeast. "Legislation specifically addressing insurance fraud as a unique crime sends a powerful message to the law enforcement community, prosecutors, and the public at large that insurance fraud is a significant issue."

Enactment of the legislation would leave just three states that have not made insurance fraud a specific crime, according to the Coalition Against Insurance Fraud.

The bill would criminalize fraudulent claims, fraud in the sale of insurance, claim inflation by public adjusters, and theft of client premiums by producers. In addition, the bill requires insurers to create anti-fraud plans which must be submitted to the Insurance Department if requested.

Recognizing that Vermont has not witnessed fraud issues on the scale seen in some other states, the Coalition referred to the bill as a "preemptive strike" against insurance fraud and suggested it would give prosecutors an important tool to pursue insurance schemes when they do arise.

NAMIC published an Issue Brief on the status of insurance-fraud legislation as of March 2005. Insurance Fraud: Most States Act to Curb the Abuses, But Adequate Statutory Remedies Still Lacking in a Few States can be read at NAMIC Online.

For further information, contact
Rick Nelson, APR, CAE
(317) 875-5250 Tel
(317) 879-8408 Fax

Paul Tetrault, Esq.
(978) 969-1046 Tel
(978) 969-1066 Fax

Posted: Wednesday, May 17, 2006 12:00:00 AM. Modified: Wednesday, May 17, 2006 2:35:24 PM.

317.875.5250 - Indianapolis  |  202.628.1558 - Washington, D.C.

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