Three States Pass Fraud Bills to Close ‘Fair’ Legislative Session

Fraud measures just passed in New York, Louisiana and Maryland closed out a legislative session that was called “fair, at best” by a Coalition Against Insurance Fraud representative.

Howard Goldblatt, governor affairs director for the coalition, said legislatures around the country were focused on economic issues this session, and that may have impacted the time available to focus on fraud bills.

Mr. Goldblatt praised Louisiana for its activity this session in passing fraud legislation. Earlier in the session, he said, the state passed two fraud-related companion bills.

One measure, Mr. Goldblatt explained, makes it a crime of insurance fraud to market phony insurance documents, such as insurance cards. The second bill makes it a crime to forge insurance documents. “So if you put the two together, it attacks the same problem from two different angles,” Mr. Goldblatt said.

In a third bill, the state extended the state police fraud unit for two years, until 2010.

Most recently, the Legislature passed HB 413, a bill addressing owner “give up” schemes where auto owners arrange to have their vehicles taken and then report them as stolen.

HB 413, sponsored by Rep. Earnest Wooten, R-Belle Chasse, and passed June 23, reads, “A person who alleges that there has been a theft of a motor vehicle shall attest to that fact by signing an affidavit provided by the law enforcement.”

Mr. Goldblatt said that requiring the signing of an affidavit adds possible addition to criminal penalties if it is found that the car was not stolen, but given up.

Mr. Goldblatt also said some people may second guess committing fraudulent actions if they have to sign a legal document.

In Maryland, Mr. Goldblatt expressed disappointment at the state’s decision to repeal a measure restricting outside access to police accident reports.

The Legislature passed a bill to replace the measure, which makes it a crime to use the reports to solicit accident victims for lawsuits, but Mr. Goldblatt said the new bill does not go far enough.

He noted that the purpose of restricting access to accident reports was to give a set time period where only people involved in the accident had access. If claims were filed after that time period, he said, it could be seen as a red flag for a possible fraudulent claim.

Mr. Goldblatt said, “In [the Legislature’s] effort to clarify who could have access to the information, they’ve re-opened the door for unfettered access to accident reports from the time of the accident…This allows for anyone, regardless of whether they were party to an accident, to have access to info that identifies individuals who were in accidents.”

In New York, the Legislature passed a bill (A 10371) recommended by the Insurance Department that extends the deadline, from January to March, for insurers to file reports about their fraud-fighting efforts from the previous year.

“The report deals with the previous year’s information,” Mr. Goldblatt said. “So it gives the insurer a couple of months more to compile and really comprehend what they have to give to the department.”

The state also passed a health fraud related bill that creates a central registry of home health care aides that includes background information and proof of proper training.