WWW.BOOK.DISLIB.INFO
FREE ELECTRONIC LIBRARY - Books, dissertations, abstract
 
<< HOME
CONTACTS



Pages:     | 1 |   ...   | 2 | 3 || 5 |

«Insurance Fraud Bureau: Does Wisconsin Really Need One? Nathan L. Taarud Abstract Wisconsin is one of nine states without an insurance fraud bureau. ...»

-- [ Page 4 ] --

Of course, increasing prosecutions by 24 raises several questions. Would convicting 24 more fraudsters each year justify an increased effort on behalf of insurance companies and DAs? Would this really have a significant or noticeable impact on Wisconsin residents? If prosecutors in most counties in Wisconsin are bogged down with current case loads, then detecting and reporting more insurance fraud may make little difference.

The clerks of courts who provided data for this research were often shocked at the results they found. In one county, the clerk asked if her query could be right.

She found no insurance fraud convictions, going all the way back to 1992. While the insurance fraud law may not be that old, the research revealed that most counties did not prosecute any cases of insurance fraud in 2005.

Public Awareness and Insurance Fraud Bureaus

The public would become more aware of insurance fraud if there were an IFB.

Besides prosecuting insurance fraudsters, IFBs also educate the public about insurance fraud. They perform the public service of raising awareness of various fraud schemes, which can save potential victims from falling into the hands of caused-accident artists. Hotlines are set up and tips solicited by the general public. This community-government involvement is very important in reestablishing trust between government and the communities they serve.

Soft Fraud

Soft fraud is the biggest contributing factor to the increases in insurance premiums, as it costs the insurance companies the most. It is committed by otherwise honest people, who take advantage of an ostensibly legitimate claim.

For example, claimants rear-ended in minor accidents, resulting in little or no damage to their vehicles, claim serious neck and back injuries which are costing policyholders billions each year. While it may be difficult for the plaintiff to convince the jury of these alleged injuries, asserting they committed fraud would be even more difficult and likely not possible. Injury attorneys are often at the helm of such claims, flooding accident “victims” with direct mailings intended to convince them an injury claim could be worth millions of dollars. While most attorneys act in their clients’ best interests, some just want a share of what insurance claimants are receiving.

www.jecm.org Journal of Economic Crime Management Fall 2006, Volume 4, Issue 2 There are many padded (soft) claims that could be easily proven in court as fraud. In one case this researcher worked a few years ago, the insured’s home was legitimately burglarized or so it seemed. Instead of claiming the actual loss of contents estimated at about $2000 worth, he inflated his claim to over $40,000. Instead of claiming his old 27” TV, he claimed a 60” plasma TV and so on. The investigation concluded with the insured providing a taped confession of how he made up the story regarding most of the stolen property. In the end his claim was denied, based upon misrepresentation. His policy was not renewed due to this matter, but nothing further happened. He committed a $40,000 felony in Wisconsin and faced no punishment for his crime. This represents just one claim out of thousands of fraudulent claims committed in Wisconsin each year.

Residents of Wisconsin should not be expected to subsidize such crimes through insurance premiums. That case could have been easily proven in court, without the need to sort through hundreds of documents. This case seemingly would have been easier to prosecute then many others that DAs work through.

Many fraudulent claims are filed every day in Wisconsin. Often the claim is denied or simply dropped by the insured. Unfortunately, the fraudster becomes wiser the next time and may even seek out an adjuster or insurance company perceived to be soft on fraud.

The Value of Punishment When discussing the court system often one will ask if there is any deterring value in punishing someone for a certain crime. For instance, many opponents of the death penalty will argue that states that legalize the death penalty for murder often have the highest murder rates. This issue here, though, is not whether prosecuting insurance fraudsters will deter them, but if they should be prosecuted and sanctioned. The imposition of civil penalties, i.e. restitution to the victim, may be beneficial and has been in many states.

Costs

The costs associated with funding a state fraud bureau vary. According to the CAIF’s statistical study of fraud bureaus from 1995-2002, the average per capita spending by states with IFBs was 48 cents. The cost ranged from seven cents to $3.48. Texas, Georgia and South Carolina spend seven cents per capita, while New Jersey spends $3.48 per capita. California spends about $0.97 per capita and has the largest budget at over $34 million. Iowa’s costs are just 10 cents per capita. Funding a bureau should not burden tax-payers. Given the above costs, it seems more costly to ignore the problem.

–  –  –

Recommendations It is the recommendation of this researcher that Wisconsin consider undergoing a serious evaluation of the extent of insurance fraud. Legislators should encourage the reporting of suspected cases of insurance fraud by law enforcement and insurance companies. They should not assume because law enforcement sees very little of it, that it is a trivial matter or that the prevalence of insurance fraud is exaggerated. The best source regarding the level of insurance fraud or suspected insurance fraud is insurance companies that insure in Wisconsin.





The creation of an insurance fraud bureau in Wisconsin is justified and may be the best offense against current fraud and the best defense against future frauds.

At a bare minimum, Wisconsin residents need to be educated about insurance fraud and provided an incentive and a hotline to report suspected fraud.

Someone must take the lead in Wisconsin to foster relationships with district attorneys about this issue. Prosecutors who have already prosecuted insurance fraud in their jurisdiction can be a wealth of information to other attorneys who are either reluctant or uninterested in prosecuting such a case.

If an insurance fraud bureau is created in Wisconsin, then it should have dedicated prosecutors as well, unless additional staff can be funded in prosecutor offices across the state. Efforts between insurance companies and an IFB should be seamless. Neither the insurance company nor the IFB should rely too heavily on the other for the investigations. The insurance company SIU should do its best investigation and present the case to the IFB in an easily understood format. While it should be required that all insurance companies report suspected fraud to the IFB, the reporting procedures should be straightforward and not labor intensive.

The wheel need not be reinvented in this endeavor. Most states have already created a central agency of one sort or another to combat fraud. The CAIF can be an invaluable resource in getting this process underway.

Wisconsin does not have to be just like every other state, but it must do something to combat this ever increasing crime. Researching the amount of insurance fraud in Wisconsin may be the first step, coupled with education and awareness campaigns throughout the state. The next question may be who can best do this.

Further Research More research in this area must be done. Of greatest importance would be to research the amount of fraud occurring in Wisconsin. NICB statistics show that 501 questionable claims in Wisconsin were reported to them in 2005 alone.

www.jecm.org Journal of Economic Crime Management Fall 2006, Volume 4, Issue 2 Clearly not all of these claims are necessarily fraudulent. However, it should be remembered that those reporting such cases work claims daily. Insurance adjusters can easily work up to a thousand or more claims in a year.

Considering the number of fraudulent claims that escape notice, 501 claims is a very low number and represents a minutia of all fraudulent claims.

Not all questionable claims or even claims known to be fraudulent are reported to NICB or law enforcement. Some believe it is more cost-effective and simpler to just pay a claim, especially if it is just a few hundred or a few thousand dollars.

Even still, it would be interesting to know how many cases SIUs in Wisconsin investigate and how many of those investigated were believed to be fraudulent, whether provable or not. While it should never be the motivation of an SIU to deny as many claims as possible, it would be interesting to know how many are denied based upon misrepresentation. Furthermore, it is common for fraudsters to simply drop a claim and move on, especially when a proactive insurance adjuster and or investigator starts asking probing questions. Because some companies may not wish to be viewed as tough on fraud, it may be helpful to conduct a survey where the company name is protected.

Researching the reasons insurance companies do or do not pursue criminal charges against insureds and claimants would also be very interesting. Are there certain protections that must first be afforded before a company signs its name to a complaint? Is an insurance company viewed negatively by the public for taking a stand against fraudsters? Is the culture still such that the insurance company is viewed as Goliath, while the individual fraudster is viewed as David? Is the fraudster likened, in public perception, to Robin Hood? What success have insurance companies had in seeking prosecution of fraudsters in jury trials?

Further research should focus on whether or not insurance fraud is being prosecuted under different statutes in Wisconsin. This research revealed no cases. Several theft by deception charges were looked into further by this researcher. No insurance companies or agents of a company were mentioned as a plaintiffs. No restitution orders were found made out to insurance companies. Furthermore, many of the theft by deception charges were for amounts generally well under the usual $250 or $500 deductibles most insurance policies have.

It would also be interesting to research what it is that district attorneys believe would be needed for insurance fraud to be taken more seriously. Would greater cooperation by the insurance companies help? Would law enforcement be receptive to insurance fraud training by the insurance company?

There is much research remaining in the area of insurance fraud. When the public is educated on the subject, it is believed more proactive steps can be taken to fight insurance fraud in Wisconsin. Left unchecked, insurance fraud can

–  –  –

spiral out of control as it already has in other states. Hopefully Wisconsin will take this seriously before legislators are forced to scramble for solutions.

© 2006 Journal of Economic Crime Management About the Author Nathan Taarud earned his Master of Science in Economic Crime Management from Utica College in New York. He earned his Bachelor of Science from Minot State University in North Dakota. He is currently employed as a senior special investigator for American Family Insurance Company in Madison, WI. American Family is the nation's third largest property and casualty mutual company.

Prior to the insurance industry Nathan was enlisted in the United States Air Force, stationed in Minot, ND, Aviano, Italy and Dhahran, Saudi Arabia.

Afterward, he was fortunate enough to work as a state trooper for the North Dakota Highway Patrol, one of the smallest, but also one of the most professional, state patrol agencies in the US. It was in Minot, ND that Nathan met Kristie, his wife of nine years. At home are also three young children, Isaac, Sophia and Ella.

–  –  –

Questionnaire for Law Enforcement (active and former)

1. Wisconsin prosecutes/convicts fewer insurance fraudsters than most other states in the U.S. When compared with IA for instance, WI convicts half as many fraudsters per capita. Why do you think this is?

2. In your ______ years of law enforcement, how many cases of insurance fraud have you investigated?

3. Do you believe the number of cases you investigated, if any, accurately represents the amount of insurance fraud being committed by consumers in Wisconsin? Why or why not?

4. It has been estimated that of the health & property/casualty insurance premiums every household pays, about $900 per year is due to fraud. What do you think is the best way to reduce this?



Pages:     | 1 |   ...   | 2 | 3 || 5 |


Similar works:

«# 0919 Evolving Preferences and Policy Advice in Democratic Society by Viktor Vanberg Max Planck Institute of Economics The Papers on Economics and Evolution are edited by the Evolutionary Economics Group Evolutionary Economics Group, MPI Jena. For editorial correspondence, Kahlaische Str. 10 please contact: evopapers@econ.mpg.de 07745 Jena, Germany Fax: ++49-3641-686868 ISSN 1430-4716 © by the author #0919 Evolving Preferences and Policy Advice in Democratic Society ∗ by Viktor J. Vanberg...»

«Document de travail 04/5 Série internationale Chaire de politique et économie forestière Département des sciences environnementales Ecole polytechnique fédérale de Zurich Les forêts: témoins des besoins du passé et espaces de développement futur Franz Schmithuesen Source: Journal Forestier Suisse 155 (2004) 8: 328-337 Zurich 2004 Working Papers International Series Forest Policy and Forest Economics Series Editor Prof. Dr. Franz Schmithüsen Department of Environmental Sciences Swiss...»

«Selbstwahrnehmung und Embodiment in der Körperpsychotherapie Vom Körpergefühl zur Kognition Deutsche Übersetzung und Bearbeitung von Helmi Boese Bearbeitet von Alan Fogel 1. Auflage 2013. Buch. ca. 384 S. Hardcover ISBN 978 3 7945 2965 0 Format (B x L): 16,5 x 24 cm Weitere Fachgebiete Psychologie Psychotherapie / Klinische Psychologie Zu Inhaltsverzeichnis schnell und portofrei erhältlich bei Die Online-Fachbuchhandlung beck-shop.de ist spezialisiert auf Fachbücher, insbesondere Recht,...»

«Darf's ein bisschen mehr sein? (Heather Wells #1) Meg Cabot Heather Wells Rocks!Or, at least, she did. That was once ahead of she left the pop-idol lifestyles at the back of after she won a costume measurement or and misplaced a boyfriend, a recording contract, and her lifestyles discount rates (when mother took the cash and ran off to Argentina). Now that the glamour and glory days of unending mall appearances are within the past, Heather's completely proud of her new measurement 12 form (the...»

«CLIENT PUBLICATION PROJECT DEVELOPMENT & FINANCE January 13, 2014 México Projects Part II: Off to the Races! On December 12, 2013, Mexico’s Federal Congress passed historic If you wish to receive more information on the topics covered Constitutional reforms opening both the oil and gas and electricity sectors in this publication, you may to private investment. Within 96 hours, the required 16 state legislatures contact your regular Shearman & Sterling contact affirmatively supported the...»

«Conciseness Considerations on Logics of Action Costas Koutras,' Athena Gaga 2 and Pavlos Peppas 3 ' Department of Computer Science and Technology, University of 2 th Peloponnese, Tripolis, Greece; 28 of October 7, Agia Paraskeui, Athens 15231, Greece; Department of Business Administration, University of Patras, Patras 265 00, Greece ABSTRACT In recent years a number of formal results have been established on the correctness of some well-known logics of actions. Correctness however is only one...»

«2_KAHNEMAN.DOCX 5/8/2013 12:18 PM SPEECH Behavioral Economics and Investor Protection: Keynote Address Daniel Kahneman Transcribed and Edited by Michael J. Kaufman It is a pleasure to be here. I think it is sort of a mixed pleasure to be embarrassed by introductions, but I find them embarrassing. Anyway thank you very much. I won’t surprise you by anything I say, certainly not those who have read my book. Actually not many people have read my book. Many people are reading my book, which is a...»

«OC09117 – Accounting/Finance Financial Profiling for Detecting Operational Risk by Data Mining Ali Serhan Koyuncugil, PH.D. Capital Markets Board of Turkey, Turkey Nermin Ozgulbas, PH.D. Baskent University, Turkey Abstract Basel II Capital Accord has been the center of attention of credit companies, banks and firms. Under Basel II banks will from now on not only consider financial risk of firms but also operational risk thereof before they grant loans to firms. Nowadays, measuring and...»

«Global Journal of Human Resource Management Vol.2, No.3, pp. 28-36, September 2014 Published by European Centre for Research Training and Development UK (www.eajournals.org) EMPLOYABILITY OF TERTIARY EDUCATION GRADUATES IN NIGERIA: CLOSING THE SKILLS-GAP Dr. (Mrs.) O.O. Sodipo Department of Business Administration, McPherson University, Seriki-Sotayo, Ogun State ABSTRACT: The issue of graduate unemployment has been in the front burner of discourse in the nation in recent years with the churning...»

«EAST-WEST Journal of ECONOMICS AND BUSINESS Journal of Economics and Business Vol. XVII – 2014, No 2 Emigrants’ remittances and economic growth in small transition economies: The cases of Moldova and Albania Anastasia Blouchoutzi, Christos Nikas University of Macedonia, Thessaloniki, Greece ABSTRACT: The breakdown of the socialist system and the following collapse of the Balkan and Eastern European economies led to large-scale emigration outflows. These flows in turn, led to massive inflows...»





 
<<  HOME   |    CONTACTS
2016 www.book.dislib.info - Free e-library - Books, dissertations, abstract

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.