INDIANA STRENGTHENS INSURANCE FRAUD LAWS
In May, Governor Mitch Daniels signed HB 1403, which widens Indiana’s anti-fraud dragnet by covering more insurance crimes and imposing harsher penalties. According to the Coalition Against Insurance Fraud, Indiana had some of the nation’s weakest insurance fraud laws.
The Coalition asserts that Indiana’s previous fraud law was so vague that it criminalized only bogus claims. But HB 1403 clarifies that other scams, such as theft of client premiums by agents and sale of fake coverage by phony insurers, are now insurance crimes in Indiana.
Penalties have also increased significantly. The former law imposed only 18 months maximum in state prison plus up to just $10,000 in fines-no matter how large and damaging the swindle. The new bill imposes up to eight years in jail and up to $100,000 in fines, depending on the size of the swindle.
Howard Goldblatt, the Coalition’s director of government affairs, explains that some 46 states have laws which make insurance fraud a specific crime. Strong fraud laws, he says, are crucial tools in a state’s anti-fraud efforts. They can ensure that more fraud cases are tried, increase the rate of convictions, and impose tougher punishment. Prosecutors have more incentive to try cases if strong fraud laws increase the odds of conviction and serious jail time, according to Goldblatt.
Area news
State Farm lowers homeowners and auto rates
Earlier this year, State Farm Fire and Casualty Company reduced rates by an average of six-tenths of one percent for Illinois homeowners policyholders, the result of increased discounts for customers whose plumbing, electrical and heating/airconditioning systems in the home are less than seven years old. State Farm Mutual Automobile Insurance Company has lowered its overall rate level in Minnesota (an average of 4.7%), in Ohio (an average of 1.7%), Wisconsin (an average of 3.7%) and in Indiana (an average of 5.7%).
In Michigan, State Farm now offers the Steer
Clear driver safety program. Completion of the program and meeting additional criteria could result in as much as a 15% discount for drivers who are under 25 years old.
Fox becomes AMS Users’ Group president
Jerry Fox, vice president of James M. King & Associates, Inc., of Bloomington, Minnesota, was elected president of The AMS Users’ Group earlier this year. Since joining The Users’ Group in 1989, he has been involved locally as well as nationally, having served “in almost every capacity, on every committee” according to The AMS Users’ Group. Jerry has received numerous industry honors, including being named “Agent of the Year” by the Minnesota Independent Insurance Association in 2003 for his work in technology education.
Credit scoring allowed
Earlier this year, Michigan Circuit Court Judge James Fisher ruled that the Office of Financial and Insurance Services overstepped its authority because it attempted to rewrite Michigan Insurance Code through administrative rulemaking, according to the Property Casualty Insurance Agents of America. With the ruling, Michigan’s current credit scoring law remains in effect and insurers can continue to use insurance scores only to discount premiums.