Publications

The Nominating Committee of the New Mexico OSI recently announced the appointment of Alice Kane as Superintendent of Insurance. Diane Denish, Chair of the Nominating Committee, shared that "Alice Kane's wealth of leadership, insurance, and regulatory experience, along with a commitment to the well-being of consumers, made her a strong candidate to lead the OSI." Superintendent Kane brings over 35 years of insurance experience to the OSI. Her background includes leading regulatory operations and serving as general counsel for major companies, ensuring compliance with state and federal laws. Superintendent Kane said, "As Superintendent of Insurance, I am committed to enforcing critical consumer protections while creating a vibrant marketplace that provides equal access to quality, affordable insurance." As Superintendent of Insurance, Kane will lead New Mexico OSI's ongoing consumer education and agency strategic initiatives, ensuring that insurance companies offer essential coverage, maintain reasonable rates, and are represented by qualified and trustworthy agents.

The Coalition sent initial comments to the NAIC Privacy Protection Working Group on the proposed revision to their new privacy model. The National Association of Insurance Commissioners (NAIC) Privacy Protection Working Group (PPWG) previously sought feedback on certain sections of their updated privacy model draft. The Coalition provided initial comment and may add to that now that the full version of the Consumers Privacy Protections model draft was made available on July 11th. The Coalition strongly supports NAIC's effort to maintain a balance between the need for information by those conducting the business of insurance and the consumers' need for fairness. We also believe that it is equally important to ensure that the investigation of insurance fraud by all involved parties is not restricted. Last year, the Coalition outlined our perspective on consumer data privacy and provided additional insights into the topic within The Ethical Use of Data to Fight Insurance Fraud Study. The NAIC PPWG will be accepting further comments per their work plan until July 28, 2023. If you'd like to discuss this issue further, please reach out to the Coalition's Director of Government Relations, Brent Walker, at brent@insurancefraud.org. 

The North Dakota Insurance Commissioner reports an increase in insurance fraud cases. North Dakota Insurance Department Commissioner Jon Godfread said his office has seen an uptick in insurance fraud cases. Commissioner Godfread detailed that the dipping economy has caused this spike in fraud, especially in North Dakota healthcare. Commissioner Godfread also said that the increase in fraud cases has created heavy workloads for the three investigators handling those cases, but the department is supported by an additional investigator focused on insurance agents and a number of memorandums of understanding with local states' attorneys to help them prosecute insurance crimes. Commissioner Godfread added, "We pay higher premiums because the more fraud there is, the more we have to pay in insurance premiums… We want to make sure people know that insurance fraud is not a 'victimless crime,'… If you're out there committing fraud, you will be prosecuted for it." Following the news story, the Coalition reached out to the Commissioner's office, and the North Dakota Insurance Department will soon be partnering with the Coalition's Creative Services on an anti-fraud public service announcement in that state. Stay tuned! 

The Coalition is looking to build a "coalition" in Arizona to combat auto glass fraud. For the past few weeks, the Coalition has been seeking member interest in pursuing anti-fraud legislation to combat auto glass fraud in Arizona, similar to the recently successful "Fix the Cracks" campaign in Florida. In addition, the Coalition's Government Affairs Committee met this week and discussed the potential for anti-fraud legislation in Arizona dealing with auto glass fraud. There was notable interest from that group as well. Momentum seems to be building, and key conversations are being held. If your organization is interested in exploring an auto glass fraud effort in Arizona, please reach out to Brent Walker at brent@insurancefraud.org. 

One of the more important issues today concerning litigation in America is funding. Whether it be high verdicts, claim value drivers, or fraudulent claims, we are all affected. Vince Gerbino founding partner of Bruno, Gerbino, Soriano and Aitken, will moderate the webinar's distinguished panel that will provide insight into this important concern from a broad range of perspectives. We will hear from Dennis Kass regarding his experiences with verdicts and claim values, Eric Schuller with his industry perspective, Matt Lehman concerning regulatory efforts and finally from Kenneth Klein, a law professor and author with his consumer-based research perspective. Do not miss this very informative webinar, and please join us to learn and understand better the growing world of litigation funding and see the good, the bad, and the ugly side of it all. We look forward to seeing everyone on July 20, 2023, at 2 pm EST. Register here. 

Coalition member Farmers Insurance begins the process of reducing policies in Florida. On Tuesday, Coalition member the Florida Office of Insurance Regulation reported receiving a "market reduction notice" from Farmers Insurance Group. Hurricanes Ian, Nicole and the South Florida flooding have presented challenges to the companies that write property insurance in the Sunshine State. Now, Farmers Insurance joins a growing list of companies that have decided to reduce exposure. A Farmers spokesperson, Trevor Chapman, confirmed it is discontinuing Farmers-branded home, auto, and umbrella insurance – a total of 100,000 policies, most of them homeowners policies. "This business decision was necessary to manage risk exposure effectively. There is no impact to 70% of policies currently in force for customers in the state, including Bristol West… and Foremost-branded policies," he said. Under Florida law, carriers have to give the state at least 90 days' notice of their intent not to renew policies. Additionally, state law demands that carriers provide at least 120 days' notice to policyholders for an effective date of nonrenewal or cancelation. If a consumer receives a nonrenewal notice from Farmers Insurance Group or any carrier, they are encouraged to contact their agent immediately to seek alternate coverage.

New research begins to show an unfortunate pattern amidst rising inflation. According to Clyde & Co's research, today's economic and legal climate has created a perfect breeding ground for fraudulent claims. Whenever there's a challenging economic environment, there's inevitably a spike in the cost of fraud, as we saw back in 2008 when there was a rise of 17% in the incidence of fraudulent claims. Essentially, the challenge for insurers and compensators is that fraudulent claims are so extensive. Borne out of the explosion of Personal Protection Insurance (PPI) claims, this issue continues to reach into all sorts of product lines and new parts of the market. It is being driven by opportunistic individuals, organized activity from companies pushing more claims into the system, and professional enablers who are seeking to maximize the value of and financial returns from claims. Looking ahead, spurious activity in consumer claims appears set to grow, particularly around consumer mis-selling. Instances of people – particularly vulnerable groups – being targeted by claims companies in new ways, such as via social media, are also likely to increase. As society continues to feel the effects of the inflationary squeeze, which shows no signs of abating in the short to medium term, the impetus for claimants to be encouraged to maximize their financial return will stay strong, and something as simple as the exaggeration of an otherwise genuine claim will remain prevalent.

The insurance claims sector is tapping into technologies such as machine learning and artificial intelligence to increase efficiency, improve outcomes and detect fraud. Whether it is a simpler version of AI that can be used to automate back-office processes or the newer generation AI, which can be used to analyze policyholders' claims history and policy preferences, these new technologies are becoming more widely used in the industry. "There are a lot of policies that are written and a lot of claims that occur, which all have data around them," said Stan Smith, founder, and CEO of Boston-based Gradient AI, which provides AI services for the insurance industry. "As I looked into it, claims were more of a challenge than underwriting. There was a lot of focus on how to get our claims costs under control." While the term AI is used broadly, it encompasses various platforms and processes. Automation and AI, for example, are sometimes used interchangeably, but they do differ.

Fraud fighters from across the Sunshine State and the nation gathered this week in Orlando for the 31st Florida Insurance Fraud Education Committee (FIFEC) Conference. Three days of in-depth courses spanned the ever-widening scope of insurance fraud investigation. Many Coalition Associate Members also supported FIFEC by being exhibitors. Wednesday's opening session kicked off with a keynote address by Florida Chief Financial Officer Jimmy Patronis, along with comments from Colonel Simon Blank as head of the Division of Investigative and Forensic Services. Coalition Executive Director Matthew J. Smith, Esq. also spoke, outlining key findings from the Coalition's recent Ethical Use of Data and Who Me? Who Commits Insurance Fraud & Why psychology study. At Thursday's luncheon, Smith was also honored as the recipient of FIFEC's highest honor, the Jerry Zappolo Distinguished Service Award. Plan ahead as FIFEC will be back again in its new location at the Renaissance Orlando at Seaworld from June 26-28, 2024. 

Debra Faulkner, a funeral insurance salesperson, has been arrested on felony charges. The allegations against her: Faulkner was embezzling money by forging fake contracts to get commissions totaling over $11K. Faulkner, who lists no prior criminal history, had been creating forged documents for her own financial gain while selling insurance at a funeral home for Coalition member TruStage. Faulkner would meet with potential clients and attempt to sell them a plan, and while speaking to them, would obtain their personal information. When the people would tell her they didn't want a plan right then, she would allegedly use their information to fill out a contract in their name. She used a fake Social Security number and fake bank account information for the billing. She would then forge the signatures on the contracts and list that a check for the payment of the plan was being mailed. The contract was sent in, the system accepted it, and Faulkner was then issued commissions on the sales. After 30 days, when the checks did not arrive, TruStage would contact Faulkner, who would say that she was going to contact the customer to "see what the problem is," allowing her to "push the contract out for a while longer." After a time, the contracts would be voided for nonpayment, but Faulkner had already received the sales commissions. Faulkner, who lists no prior criminal history, was released later that day on a $10K bond and is set to appear July 18 in Garland County District Court.

Things heat up to the fourth degree in the felony arson case. A Lucas County woman, Heidi Benrholtz, was found guilty of fourth-degree arson and will be sentenced at the end of July. Bernholtz was accused of starting a fire on July 2, 2022. She was accused of starting the fire with the purpose of defrauding an insurance policy. Benrholtz has previously pleaded not guilty but withdrew her previous plea and entered a guilty plea to the offense of fourth-degree arson Monday in court. The court accepted the plea and scheduled sentencing for July. Bernholtz will have to register as an arson offender as a result of the guilty plea.

A new class action lawsuit has been filed against a company touting to be America's No. 1 marketplace health insurance. The suit alleges Ambetter Health has a pattern of racketeering and a scheme to defraud its customers across 26 states. Despite having Ambetter Health, "it's basically like I have no insurance at all," Alex Woodward, a Duluth resident and mother of two, said. "You think twice about making (doctor) appointments. I thought about my kids. Could I find some other way to get them the care that isn't going to cost me $400 today?" Woodward has been paying for doctors' visits mostly out of pocket this year. She can barely afford to keep the visits, but she can't afford to miss them either. Multiple complaints and posts from the Better Business Bureau show some families are having difficulty getting their medical bills paid by Ambetter or finding a provider in their network coverage. Woodward contacted the doctors listed on Ambetter's site within her 20-mile radius as she tried to book an appointment. "I called all 25," she said. "None of them took Ambetter. Some of them never did." The lawsuit accuses Ambetter and parent company Centene of intentionally under-delivering its in-network coverage to defraud customers. Boley is alleging the company of "an illegal scheme to capture consumers as they move out of Medicaid by promising them provider coverage that is actually, in fact, egregiously insufficient and inaccurate. The consequences that flow from that are devastating." Ambetter denies the allegations, and the company's lawyers have requested the case be dismissed.

As Greg Lindberg faces legal trouble, a judge has ruled that he must partially pay his policyholders. Tens of thousands of people whose money has been in limbo since 2019 as the state tussles with the billionaire accused of fraud may get some of their investments back soon. Last week a Superior Court judge overseeing part of the case ordered one of the companies involved to pay annuity holders 25% of their policies, which is expected to total about $444M. The decision affects about 65,000 annuity contracts held by Colorado Bankers Life Insurance Co. He also faces federal charges of financial fraud and a Securities and Exchange Commission complaint accusing him of setting up complex transactions to mask that he was spending insurance company money as if it were his own. Lindberg has denied the accusations against him. His long-time attorney didn't immediately respond to an email Monday seeking comment on the latest development, but Lindberg's legal team didn't try to block the motion to order partial payments at Colorado Bankers Life, signaling that they will go forward.

A British man tried to pass off as the son of a dead man, stealing thousands of pounds from his real family. Jack Reece, from the Welsh city of Flint, appeared at Chester Crown Court on Thursday for sentence after previously pleading guilty to two counts of fraud, one of theft and one of providing false information. The crimes he is admitting to: Between January and February of 2020, Reece claimed he was the son of the late David Hughes and intended to gain a life insurance policy to the value of over £3K. He also tried illegally accessing the deceased's bank account, stealing almost £1K. Reece also pleaded guilty to claiming he was the stepson, illegally registering the death of David Hughes at Flintshire Registrar Office, and stealing a £500 motor car belonging to Mr. Hughes. 

A Georgia woman claimed almost $40K on her mother's insurance policy, despite not having been possible. The allegations against her: Douglas County officials are searching for Ashlarene Wells after she has been charged for claiming thousands of dollars in her dead mother's name. The allegations against her: Wells submitted 13 claims under her insurance policy and the policy of her dead mother. When Wells filed the claims, she submitted multiple documents showing that her mother received care on an impossible range of dates. The dates of care listed on the documents came after the date of her mother's death. The care facilities also denied seeing Wells on the dates listed for her own personal claims. Wells obtained over $39K from the false claims. On July 5, warrants were taken out against Wells in Douglas County. She is still wanted at this time.

This fraudster couldn't just stop at filing just one false injury claim. Kenesha Daniels has been criminally charged after submitting a traffic injury claim. The crimes she allegedly committed: Daniels was involved in a traffic accident and filed an automobile injury claim with her insurance company, according to a news release. She submitted an invoice for treatment at a local hospital as evidence. Special agents from the Office's Criminal Investigations Division reached out to the hospital to verify the authenticity of the invoice and confirmed Daniels did not receive treatment at their facility during the claimed period. The hospital did not have any invoices matching the one submitted by Daniels. In May 2021, Daniels was involved in a second traffic accident and submitted another forged invoice in an attempt to receive an insurance payout, according to the release. Warrants were taken out against Daniels on June 30 in Columbia County, according to the release. She is still wanted as of Friday.

Congratulations on the 30th Anniversary of the founding of the Coalition Against Insurance Fraud. Travelers Insurance is proud to be a founding member of this wonderful organization, and I had the honor of representing Travelers and the industry. As I have said many times, I continue to be amazed by the wonderful work done by the Coalition with such a small staff. A true credit to the leaders of the organization as well as the members. I wish you continued success going forward, and congratulations on 30 years of service and awareness of insurance fraud and its impact on society.

Ken Jones, Vice President | Travelers Investigative Services (retired)

Michelle shares that nine months out of college, she answered a blind ad placed by a company looking for college graduates to process insurance claims. The $11 hourly rate being offered intrigued her as it was more than she was making at the sales job she had accepted as a new graduate. 

When she answered that ad, never in her wildest dreams could she have ever imagined it would lead her to a 32-year career in state government, the investigative career she always dreamed of, a job she absolutely loved going to each and every day, the opportunity to travel and see our beautiful country, the ability to meet, learn from and collaborate with extremely talented professionals from all over the world, invitations to lead working groups, task forces and organizations, life-long professional and personal relationships and most importantly, her husband, with whom she's built a beautiful family. 

In May and June, Michelle thought a great deal about that ad as she made the decision to retire from the Ohio Department of Insurance and state government effective this past June 30th. She is proud to have served as a public servant for more than three decades and will be forever grateful to the leaders who gave her the opportunity to grow and become the fraud-fighting professional she is today. 

As Michelle enjoys the summer making memories with family and friends and assisting the Coalition with its amazing efforts, she looks forward to seeing what's in store for the next chapter of her stellar professional career, especially since the first chapter had such an amazing impact on her life! 

The Coalition thanks Michelle for her many years as an insurance fraud fighter, and we all wish her the best in her retirement and the next amazing chapter in her life.

The International Association of Special Investigation Unit's mission is to bring the world's fraud-fighting community together through education, awareness, and networking. This is accomplished year-round through in-person and virtual events held regionally, nationally, and internationally. As we prepare for our upcoming Annual Conference in Dallas, IASIU is also excited about the local seminars and events that are scheduled throughout the country. Classes focused on water damage investigations, arson, worker's compensation, vehicle thefts, and so much more. To stay up-to-date on these events, visit the IASIU website. The site provides the most accurate and current information regarding the IASIU chapter and International events, as well as events sponsored by some of our strategic partners. So be sure to check it regularly for event descriptions, dates, locations, and registration details. These chapter and partner events offer a great chance to connect with local and industry-specific SIU professionals, providing targeted discussions and insights specific to your region or area of expertise. So stay informed and don't miss out on the great educational and networking events. IASIU – fighting fraud together!