Publications

The Assembly voted in favor of the bill in May. Both chambers passed the measure unanimously. The proposed law authorizes a District Attorney or their designated Assistant District Attorney to convene meetings with insurers and self-insured employers to discuss specific information about fraud. It protects persons sharing such information from civil liability for libel, slander or any other relevant cause of action if there is a good-faith basis to suspect insurance fraud. The Senate version contained amendments which the Assembly approved as well. The bill will now go to the governor for expected signing into law. Another bill introduced this year clarifies the duty to report suspected insurance fraud. It also passed the Assembly this week, and is now being returned to the Senate to concur in June amendments. 

State Farm has agreed to pay the federal government $100M for potential liability over its handling of flood insurance claims after Hurricane Katrina, news reports say. That settles a lawsuit that two whistleblowers filed against the insurer more than 16 years ago. Two independent adjusters — who also are sisters — filed the suit in Mississippi in 2006. The U.S. Supreme Court unanimously agreed with the Rigsbys in 2016 that State Farm defrauded the National Flood Insurance Program by charging it for flood damage to a policyholder’s Biloxi home when wind caused the destruction. State Farm’s policy was supposed to cover the wind damage. The insurer was ordered to pay $750K, triple the amount of the claim State Farm made to the flood program, and $2.9M in attorney’s fees and expenses for the Rigsbys. Winning that fraud case opened the door for the Rigsbys to examine thousands of other State Farm claims for fraud after Hurricane Katrina. The settlement means State Farm will pay restitution to the federal government, not individual policyholders, over any liability the insurer may have faced for its handling of other flood insurance claims.
 

Long term care insurance remains a major issue for consumers and regulators alike for many reasons — including insurance fraud. Issues with LTC coverage also create problems for insurers as John Hancock Life & Health Insurance Company learned after a compliance review by the New York Department of Financial Services. Superintendent Adrienne A. Harris announced this week the insurer will return more than $21M to consumers or their beneficiaries, and pay another $2.2M to the state Medicaid program along with a $2.5M penalty for violating New York’s Insurance Law. “When New Yorkers get older, many will need long term care services which are often not covered by regular insurance and can be costly. It is critical that these companies operate in full compliance with the law to provide New Yorkers with the care and benefits they deserve,” Superintendent Harris stated.

If you want to better understand market-destabilizing lawsuits by Florida roofers attempting to stop useful anti-fraud laws enacted this year and in 2021, read a recent blog posted by Coalition member Lisa Miller & Associates. Both lawsuits ask the court to stop enforcement of laws as violating roofing contractors’ rights of free speech, and alleging denials of equal protection and access to the courts. The Coalition supports both bills and opposes the lawsuits, which remain at the trial court level at this time. 

Also in the Sunshine State, tropical storm activity is forecasted to increase as autumn approaches. Natural disasters unfortunately bring increased insurance fraud activity in their wake. To help better inform consumers, Florida’s Insurance Consumer Advocate Tasha Carter teamed up with Logan McFaffen, APCIA’s Vice President of State Government Relations, for a story in the Tampa Bay Times warning about contractor fraud. “More storms mean more opportunities for dishonest contractors and fraudsters to prey on homeowners in need of repairs. … Illegitimate contractors’ deception and deliberate schemes have a far-reaching impact on Floridians and the insurance market. Fraud drives up costs and leaves consumers to cover the shortage,” both authors correctly note. The story is part of a larger consumer-awareness campaign that the Advocate and APCIA have launched (See Outreach & Insight below). 

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Note: Texts of anti-fraud bills are available on the Coalition’s website here.

"… After 15 months we produced a first-ever report that measured the amount of workers’ comp fraud in America,” former workers comp prosecutor and leading expert Dominic Dugo says in previewing the upcoming report in the newest edition of the Coalition’s FraudPod.

The latest Coalition FraudPod is out with a new look and feel. In this episode, the Coalition touches upon why the Data Ethics Study Survey is so vital to giving everyone a voice on how their personal information can potentially be used. The Coalition extended the deadline until August 31st, in order to gather as much feedback as possible because we want as many of you to personally complete this confidential survey that takes less than 10 mins. The Coalition is giving you a chance to speak up now before others make the final decision for you. Another very important part that we cover is the Astellas vs Federal Insurance case currently going on. We take you through the story of how Astellas created two fraudulent non-profit foundations, got busted, their deal with the DOJ and how they played the system to recoup a $100M fine when a judge ruled in their favor and what it means to the industry if Federal Insurance loses their appeal. The Coalition has played a role by filling an amicus curiae brief to help bring true justice to this case. Also, in this FraudPod, you’ll meet three of the WC Task Force members who will briefly introduce themselves, discuss the new report and invite our members to the upcoming WC Webinar which currently has north of 600 confirmed attendees scheduled for Sept. 8th at 2pm (EDT). And to top it all off a friendly reminder for the Annual Meeting.

Unlicensed agents stealing consumer premiums are enough of a problem that the California insurance department is sending out video public service announcements statewide. Unlicensed activity costs Californians tens of millions of dollars every year. For example, Californians have paid thousands of dollars for vehicle extended warranties illegally sold by unlicensed companies —  only to have their claims improperly denied and then having to pay again for expensive repairs. Individual losses of several thousand dollars per victim can add up to massive fraud. “We have all gotten those phone calls trying to sell us an extended vehicle warranty,” Insurance Commissioner Ricardo Lara says in one PSA. “What a lot of people don’t know is that’s illegal in California. The Department of Insurance is here to protect you and stop these illegal practices.”  

With hurricane season approaching peak months in Florida, two groups are teaming to warn vulnerable homeowners how to avoid being fooled by shady, door-knocking contractors. The campaign centers around a guide listing red flags, Don’t Be a Victim! Prevent Contractor Fraud & Abuse. Homeowners should especially stay alert to contractors who go door to door after storms, trying to pressure consumers into signing contracts. Florida’s hurricane is forecasted to be stronger than normal — increasing the need for early consumer education before the damaging funnels touch down. The state’s Insurance Consumer Advocate and Coalition member APCIA have launched the effort. They held a twitter chat this week to help crank up the campaign (@TeamAPCIA).

Chalfont Collision Center was a direct repair center for Erie Insurance and numerous others. The insurers verified Chalfont’s credentials. The shop was authorized to write estimates, complete repairs, and send estimates and billing documents for insurer payment. This sped up repair time for customers. Erie, Nationwide, CSAA and Liberty Mutual identified 289 estimates with more than $426K of artificial or inflated damages. Body shop owner John Pau Reis is charged with insurance fraud and other felonies. 

A restaurant employee suffered severe injuries while operating kitchen equipment, yet allegedly had no workers comp coverage. The Texas insurance department alleges this scam: Allison Clem and her wife LeAnn Mueller run the restaurant la Barbeque in the Austin, Tex. area. Clem and Mueller found out about the injury that day. Clem bought workers comp coverage from Paychex Insurance four days later. They hadn’t bought coverage for two years. Clem didn’t disclose her employee’s injuries to the agent, but asked that the new policy be backdated to three weeks before the employee was hurt. Mueller then submitted a signed application claiming the business had no prior losses. The policy was approved by Travelers Casualty. The insurer paid the employee more than $350K in medical and indemnity benefits. The insurer is also responsible for lifetime care of the injured employee. Clem and Mueller could have to pay restitution plus double the amount Travelers has already paid in benefits to the injured worker.
 

An agent stole the IDs for several people to open a new agency in the Los Angeles area, the California insurance department says. Here’s allegedly why: Francis Okyere’s suspected scheme was busted when an ex-relative filed a complaint. His new agency was called Cyber Access Insurance Agency. Okyere also used two of the stolen IDs to falsify documents to secure nearly $40K of pandemic business loans. He earlier stole at least $65K of workers’ comp and liability premiums from four small business owners and used the money for personal benefit. Okyere left his clients uninsured in case of potentially catastrophic claims. 

A former employee is suing Quincy (Pa.) Township, claiming officials harassed and fired him for telling law enforcement about alleged fraud by the now-deceased elected township Supervisor. Corey Kaiser brought the whistleblower action. Then-Supervisor Kerry Bumbaugh received $100K from Quincy’s insurer after forging a document claiming the township agreed to assume liability for damage from the installing of a water line on his property. He then directed township employees to do several weeks of full time work demolishing a damaged wall on his property — instead of using the earmarked insurance money. Bumbaugh also hired a contractor to rebuild and repave his driveway. Then he falsified invoices to make it appear the work was a part of a state-funded road improvement project. Impeachment proceedings were underway, though Bumbaugh was found dead at the town’s offices last December. 

Will freedom beckon for Laura Troiani, who was recommended for parole after serving 38 years for having her Marine husband murdered for $95K of life insurance in 1984? Troiani lured Carlo to a secluded dirt road in San Diego County. She phoned him, lying she had car trouble. Fellow Marine Mark Shulz shot the Vietnam vet in the back and neck with a .357 pistol, then ran over him with a car. Troiani stood and watched Carlo’s murder take place, around 1 a.m. She then got their two children and drove to a friend’s house for the night, saying she was coming home from a Tupperware party and had a flat tire. Troiani showed no emotion when detectives visited after finding Carlo’s body. She also repeatedly told a neighbor she wanted him dead. Even the group of Marines who helped her plot talked openly to others. Troiani also told conflicting stories about being abducted by five men on motorcycles, then by three men who forced her to call Carlo to the eventual murder scene. However, she finally convinced the parole board she was reformed and no longer a public threat. Laura was having an affair with at least one of five Marines who helped set up Carlo’s murder. “I am working to be the best me I can possibly be. I love myself today. And I am able to see others, that there is a light in them. I am able to see that they are human and they, too, matter. This is something I didn't have prior to having Carlo killed,” Troiani said during her latest parole hearing. The parole board agreed — though the governor still must approve the recommendation. She originally received life in prison, which was commuted to 35 years to life. 
 

Medova Healthcare was ordered to stop selling illegal health insurance in Washington state. Medova sold unauthorized health plans called Lifestyle Health Plans to about 140 small businesses and their 1.4K employees through chambers of commerce in Washington state. Medova misrepresented the coverage and who was financially responsible for paying claims. Medova marketed the plans as complete health benefits packages similar to traditional employee insurance plans. In truth, the plans were self-funded ERISA health benefit plans. They’re regulated by the federal Department of Labor and not Washington state. Under an ERISA plan, the employer pays for its employees’ claims and the insurer that sold the coverage only administers the plan. Medova also improperly handled and accounted for the employers’ premium funds. For example, Medova collected premiums from the small businesses. Then instead of keeping each employer’s premium and paying their claims individually, it pooled the money and doled out claim payments for each employer group from that source of money. Some claim payments were delayed, and others are still unpaid. Under an ERISA plan, the employer is financially liable for any unpaid claims. 

As we know, inflated towing bills are no surprise to many Pennsylvania residents, especially in urban areas. Getting into a collision is, at best, an unpleasant situation. No one wants to think it may cost thousands of dollars to get your vehicle back from a towing company. While most towing companies in Pennsylvania are honest, hardworking and bill correctly, some will charge over $4K for basic towing and storage fees. Inflated invoices contain exorbitant charges for things like administration fee, gate fee, case management, fuel surcharge, “down time” and $225/day storage. Earlier this year, the IFPA began a Know Your Tow campaign. The goal is to educate consumers on towing companies and steps they can take to protect themselves when involved in an accident. The IFPA’s goal is to raise public awareness among all Pennsylvanians including law enforcement and politicians (both local & state level) regarding inflated towing and storage invoices. The IFPA partners with police departments and the PA Office of the Attorney General, Insurance Fraud Section, in combatting this issue. Another great initiative is that a task force is being established and law enforcement is working on a number of different ways to address the problem. Finally, they are hoping to increase legislative support and have a more uniformed approach regarding tow bills in the Commonwealth. Since 1995, the IFPA has been responsible for assessing the scope of Pennsylvania’s insurance fraud problem, and working to prevent and prosecute insurance fraud crimes. Funding comes from annual insurer fraud assessments, and is distributed in grants to state and local law enforcement agencies. Twelve grantees investigate and prosecute insurance fraud crimes. The IFPA’s public awareness campaign educates Pennsylvania residents about the types of insurance fraud and damage this crime inflicts on consumers throughout the Commonwealth.

As September quickly approaches, we prepare to kick off IASIU’s Annual Conference in San Diego. We’re excited about all that the conference has to offer members like you. From our Opening Keynote speaker, Dr. Kelly Richmond Pope to the Closing Keynote speaker Michele Stuart, the topics will be thought-provoking and informative. You’ll find no shortage of brilliant minds to listen, learn and discuss the ever-growing topics of fraud-fighting. Top experts will share their knowledge, expertise and tactics to help create stronger and more well-informed fraud-fighting professionals. Speakers will include investigators, technology experts, insurance executives, medical professionals, attorneys and so many more. Education and networking remain at the forefront of IASIU’s mission. You’ll find it reflected at the Annual Conference. So, if you’re looking to take a deeper dive into the sessions, check out the agenda today. We look forward to experiencing this conference with you in sunny San Diego!