Publications

     New Hampshire Insurance Department
     shared insights into agent and broker
     misconduct via webinar and issued a
     bulletin reminding insurers to report
     health care fraud.

 

Last week, the Coalition attended the New Hampshire Insurance Department’s (NHID) webinar, “Identifying Financial Abuse in Insurance,” focused on agent and broker misconduct as a key source of financial abuse and fraud risk in the Granite State’s insurance market. NHID Commissioner Bettencourt began by emphasizing that most agents and brokers in the state operate honestly and serve consumers well. The session provided a comprehensive overview of how financial abuse emerges through deceptive sales of bundled “Frankenstein” products, questionable annuity practices like commission churning, and issues with Medicare Advantage and Medicare Supplement sales. NHID handles about 1,200 consumer complaints and several hundred fraud referrals annually related to such misconduct. Its Enforcement, Market Conduct, and Fraud divisions collaborate to investigate civil, systemic, and criminal violations, resulting in fines, cease sale orders, and ongoing probes. Separately, NHID recently issued a bulletin reminding health carriers and producers to report suspected fraudulent medical billing by health care providers to NHID. Together, these efforts reflect NHID’s proactive leadership and highlight the vital role of timely fraud reporting and strong public-private cooperation in protecting consumers and the insurance marketplace from misconduct that often leads to fraud.

Connecticut announces leadership change as Commissioner Mais retires and Hershman is nominated. Connecticut Governor Ned Lamont has announced that Connecticut Insurance Department Commissioner Andrew N. Mais will retire, after a tenure marked by strong consumer protection and national regulatory leadership. As 2024 NAIC president, Mais championed the theme “Mind the (Insurance) Gap,” urging regulators to remove unnecessary barriers to insurance coverage and expand access to underserved populations. Governor Lamont has nominated former CID Deputy Commissioner Josh Hershman to succeed him in an interim role. Hershman brings experience as a life-insurer CEO, regulatory innovator, and leader during CID’s modernization and data-driven oversight initiatives. Mais and Hershman have both emphasized safeguarding consumers, promoting market stability, and supporting a vibrant, forward-looking insurance industry.

NAIC Antifraud Task Force proposes new mission language and technology priorities for 2026. The National Association of Insurance Commissioners (NAIC) Antifraud (D) Task Force’s proposed 2026 charges reflect an intent to expand its mission and strengthen state-level fraud oversight, while modernizing the infrastructure that regulators use to detect insurance crime. New language defines the Task Force’s purpose as serving the public interest by assisting state insurance supervisors through the detection, monitoring, and referral of insurance crime, both by and against consumers. It also outlines new responsibilities that include maintaining and improving electronic fraud databases, disseminating fraud trend analysis and case-specific insights to regulators, and providing a liaison function with state, federal, local, and international law enforcement as well as antifraud organizations. These updates are in line with several Coalition advocacy efforts with NAIC, including urging the Task Force to create a new Long Term Care fraud category in the Online Fraud Reporting System (OFRS) and calling for stronger NAIC IT investment after delays in the Antifraud Plan Repository. The 2026 proposed charges begin to address these concerns by directing ongoing repository maintenance and enhancing OFRS functionality. The Coalition will also provide an organizational update during the upcoming 2025 NAIC Fall National Meeting in Hollywood, Florida.

     AI isn't just cutting costs – it's rewriting
     the insurance playbook.


 

For years, customers struggled to understand how premiums were calculated. Now, AI offers more transparency. According to José Luis Bernal, chief digital, data and innovation officer at MAPFRE USA, the biggest impact may be trust. “AI is bringing much more predictive predictability into the premiums,” Bernal said. “It can be done much more accurately and, with a new technology, much more firm and being explainable to the end customer.” Bernal said this shift could finally give customers clarity on what they’re paying for – something they’ve long demanded. Alongside greater accuracy, automation continues to drive down operating costs. But Bernal pointed to another win: better fraud detection. “Right now, those third customers are paying the premium of the fraudulent customers,” he said. “Thanks to AI, now we can detect much more accurately.”

Insurance companies face privacy risks while fighting AI fraud. Artificial intelligence (AI) is transforming the way the insurance industry detects insurance fraud, shifting from a reactive system to predictive and real-time prevention. However, as insurance companies automate the random analysis of claims and insurance policies, the need to balance innovation with confidentiality and ethical accountability is becoming increasingly important. According to Rupa Malhotra, Head of Customer and Digital at APAC, Zurich Insurance, this transformation represents a major change in the way insurance companies fight fraud. “AI is moving from static rule-based systems to dynamic learning models. Who can identify suspicious behavior as soon as it occurs.” For Ho Sheng Chia, Senior Customer Success Manager at Shift Technologies, adopting AI is about fulfilling a larger societal purpose. “Our aim here is really for the good of society. This is really about protecting the honest insured and ensuring genuine claims are paid quickly and accurately,” he said, adding that keeping premiums affordable and maintaining a sustainable claim loss ratio is critical to the long-term survival of insurance companies. However, both experts agree that the promise of AI depends on trust. Malhotra said, “AI and data privacy have to evolve along with privacy. One cannot move forward responsibly without the other.”

Callers requesting Social Security numbers from Iowa Medicare beneficiaries. The Iowa Insurance Division’s Senior Health Information and Senior Medicare Patrol Program has issued a fraud alert for calls requesting social security numbers from Iowa Medicare beneficiaries. Callers are identifying themselves as representatives of Medicare plans and tell Iowans their Social Security information is necessary to ensure plan premiums are withheld from Social Security payments. “Anyone calling and asking for your Social Security number or banking information is likely trying to commit fraud,” said Iowa Senior Health Information and Senior Medicare Patrol Director Kristin Griffith. “Be especially vigilant of callers using high-pressure tactics such as threatening to remove services because you are not taking immediate action.” According to the media release, Medicare Advantage Plan providers and Medicare Prescription Drug Plan providers can set up premium withholdings without a Social Security number.

     New York construction firm and it’s owner
     sentenced for insurance fraud.



 

Mahendranauth Khargie, 36, and his company, GC Stud Inc., substantially underreported the total amount of their payroll during three policy periods between April 2019 and March 2022, resulting in premium fraud. As a NYSIF Workers’ Compensation policyholder, Khargie and his company are required to provide financial records concerning income and employee payroll to NYSIF every year the policyholder renews its coverage. Records revealed that large payments to the defendants were made by three different steel and iron fabrication companies during the time of the investigation. The defendants hid the money, deposited the funds in a JPMorganChase account, and did not provide that account to the NYSIF premium auditors. Over the course of the scheme, Khargie underreported his payroll to NYSIF by more than $3.5 million, resulting in underpayments of the company’s Worker’s Compensation policy premiums.

Construction company must pay $725,000 for wage theft settlement. Christian Siding, a construction company that has worked on projects across DC, must pay $725,000 to resolve allegations that the company failed to pay “prevailing wages" to workers on three publicly-funded affordable housing projects and misclassified workers as independent contractors on 13 additional projects. They were not paid overtime wages when they worked more than 40 hours in a week, did not receive paid sick leave, and were not protected by unemployment insurance or workers’ compensation. The Office of the Attorney General (OAG) also alleged that Christian Siding deprived these workers of overtime wages and benefits, like paid sick leave and overtime pay, that they were legally entitled to. Under the terms of a settlement agreement, Christian Siding will pay more than $364,000 to 229 harmed workers, as well as $360,000 in penalties to the District, and will be required to make significant changes to its business practices and submit to compliance monitoring for two years.

California suspects linked to insurance scam involving staged rideshare crashes. A staged crash on the I-215 freeway that targeted a rideshare driver and aimed to defraud their insurance has led to felony convictions for four men, including one from Hesperia, while a fifth suspect from Adelanto remains charged and faces additional counts of pimping, pandering, and false imprisonment. Kalil Davis pleaded no contest to insurance fraud and assault with a deadly weapon. He was sentenced to 180 days in county jail and two years of felony probation. Meanwhile, Deshawn Perater-Nickson was the registered owner of the vehicle used in the staged crash. He was arrested earlier this year and initially charged with insurance fraud and assault with a deadly weapon. However, while in custody, investigators uncovered evidence linking him to additional crimes including false imprisonment, pimping, and pandering. He is expected to appear in court on January 26, 2026.

GEICO alleges a $4 million no-fault pharmacy fraud scheme in Queens. In a filing dated November 26 in the United States District Court for the Eastern District of New York, GEICO set out detailed allegations against United Pharmacy NYC Inc., its owner, Irina Alishayeva, two nurse practitioners, and a series of unnamed “John Doe” defendants. The lawsuit alleges: GEICO alleges the defendants exploited individuals involved in motor vehicle accidents who were eligible for Personal Injury Protection benefits by systematically dispensing certain prescription drugs without regard to genuine patient care.  According to the filing, the defendants submitted more than $4 million in pharmaceutical claims through United Pharmacy under GEICO policies. 

State Farm sued over PHL policies as buyers insurance claim fraud, gutted payouts. The lawsuit, Jason v. State Farm, 25-cv-14507, filed Nov. 26 in Chicago, accuses State Farm of fraud and unjust enrichment, arguing the insurer concealed what it knew about PHL’s condition and the repercussions for policyholders. The allegations: Plaintiffs say they trusted State Farm’s agents and brand, only to discover years later that their promised benefits had quietly shrunk. Three customers bought PHL-issued life insurance from State Farm agents: Jenny Nappo, Patrick McLaughlin and Gordon Jason. Nappo says she expected a $2mn payout when her husband died of cancer but received only $300,000. McLaughlin and Jason each bought policies worth $1.5mn and $500,000, respectively, and now report their benefits capped at $300,000 apiece. PHL’s troubles aren’t new. The Connecticut-based company has dealt with outdated actuarial assumptions, poor investment performance and a decade of balance sheet erosion. Its owner, Golden Gate Capital, tried to stabilise the business using complex risk-shifting transactions, but the fixes didn’t hold. Thousands of policyholders ended up in limbo as PHL’s capital hole widened. Golden Gate didn’t respond to requests for comment. State Farm says it’s aware of the lawsuit but hasn’t been served and can’t comment on the specifics.

Iowa man receives deferred judgment for forging pet insurance claim. Greg Buelow pleaded last Thursday to tampering with records, an aggravated misdemeanor. In his written plea, Buelow admitted “I did falsify, destroy, remove or conceal a writing or record with the intent to injure, deceive or to conceal a wrongdoing.” In addition, he pleaded guilty last week for submitting a forged receipt for pet medications to an insurance company and received a deferred judgment Tuesday. Buelow provided false information to an insurance company for a pet insurance claim. The submitted falsified invoice for reimbursement, purportedly issued by a veterinary clinic, was for prescription medications for his dog. The incident happened June 2, the complaint stated. The complaints don’t include the amount of false reimbursements.

Texas man arrested on organized criminal activity and insurance fraud charges. Jorge Celiz, has been arrested and is currently in custody in Tarrant County, Texas, where he is facing two serious felony charges. The allegations: No additional details regarding the alleged criminal scheme have been released, and it is unclear whether more charges may follow. U.S. authorities have not yet issued a formal statement regarding the circumstances leading to his arrest. Celiz is expected to face court in the coming days as the investigation continues. Records indicate that Celiz has been placed on no-bond hold conditions, meaning he cannot be released until further court proceedings. His current housing location is the Tarrant County Corrections Center, where he remains detained pending legal action.