INDIANA STRENGTHENS INSURANCE FRAUD LAWS

Rough Notes, Sep 2005

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.

Annual meetings planned

Professional Independent Insurance Agents of IllinoisSeptember 14-16 at the Crowne Plaza in Springfield, Illinois. For more information, go to www.piiai.org.

Independent Insurance Agents of Indiana-November 12-15 at the Westin Hotel in Indianapolis. For more information, go to www.bigi.org.

Identity theft high in two Midwestern states

In 2004, Illinois and Michigan were two of the top 10 states in identity theft, according to the Consumer Sentinel, a data clearinghouse for fraud and theft, and the Federal Trade Commission's Identity Theft Data Clearinghouse. Illinois ranked 5th in the nation, with 11,138 identity theft victims, and Michigan ranked 9th with 7,307 victims.

Minnesota

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.

Michigan

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.

Indiana

Wheeler receives AMS leadership award

At The AMS Users' Group National Conference, Kevin Wheeler of Cardinal Insurance in Indianapolis was presented with the Louie E. Woodbury, Jr., Leadership Award. Kevin is a past president of The AMS Users' Group and currently serves as the organization's treasurer. During his 15-year involvement with AMS, Kevin has chaired a variety of committees, served on the board, and conducted various seminars on automation and insurance around the state and nationally. He has also served on numerous agent's advisory councils and automation committees.