Protection FRAUD Everyone Pays

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Protection FRAUD Everyone Pays $$. Introduced by:Dennis PompaAssociate Commissioner512-463-6492. Outline. TDI Insurance Fraud Unit Types of Insurance Fraud and Governing LawsCost and Impact of Insurance FraudFraud Trends and Schemes. Extortion Unit. Built up as per Texas Insurance Code, Chapter 701Investigates deceitful protection represents referral to lead prosecutors and government prosecutor

Presentation Transcript

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INSURANCE FRAUD Everyone Pays $$ Presented by: Dennis Pompa Associate Commissioner 512-463-6492

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Overview TDI Insurance Fraud Unit Types of Insurance Fraud and Governing Laws Cost and Impact of Insurance Fraud Trends and Schemes

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Fraud Unit Established compliant with Texas Insurance Code, Chapter 701 Investigates false protection represents referral to head prosecutors and government prosecutors Employs affirmed peace officers, prosecutors, guaranteed misrepresentation inspectors and criminal investigators

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What the Fraud Unit Does Receives reports of suspected protection extortion Coordinates examinations with law requirement and state organizations Interviews suspects and witnesses Acquires and dissects budgetary, business and authoritative records Documents the stream of cash exchanges Prepares extensive investigative reports for accommodation to an arraigning office

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Agent/agent Company officer Unauthorized/unlicensed substance Claim Health protection Life protection Arson Provider misrepresentation Disability Workers' pay Application extortion Types of Insurance Fraud Investigated

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The Cost of Claim Fraud $120 billion every year – costs every US family $300-$1,000 every year! Source: Coalition Against Insurance Fraud

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Laws That Govern Insurance Fraud in Texas Labor Code (punitive infringement) Texas Insurance Code (corrective infringement) Texas Penal Code Chapter 35 Theft statutes Misapplication of guardian assets Federal statutes 18 U.S. Code Section 1033, 3034 Mail extortion Wire misrepresentation

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Current Fraud Trends Mortgage Fraud Disaster Fraud Application Fraud – ID Theft Promissory Note Fraud

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Current Fraud Trends cont'd Theft of Premiums Disability Fraud Disappearing auto's (jettisoning) Provider Fraud Medical history distortion/recipient extortion Unauthorized Property & Casualty Ins.

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Agent Fraud Embezzlement (Theft) Cash surrender burglary Commission plans Phony applications Commission juggling License application mis-portrayal Premium fund extortion

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Adjuster Fraud Kickbacks Referral expenses from merchants Embezzlement or robbery by trap License application deception

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Insider Misconduct Embezzlement (Theft) Corporate wrongdoing Overvalued resources Asset redirection Money laundering

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Workers' Comp Claims Fraud Exaggeration of the degree of wounds Malingering Secondary business Conspiracy with lawyers, therapeutic suppliers, others

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Life/Disability Fraud Faked passings Policy control Exaggerated wounds or ailments Malingering

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Fraud by Unauthorized Entities Individuals, organizations, or associations indicating to be insurance agencies Sales of strategies, yet no installment of cases

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Auto Claims Fraud Petty False Claims Staged Accidents Medical Mills Auto Repair Ditching – proprietor surrender Collusion

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Property Claims Fraud Exaggerated misfortunes Claims for things not possessed by petitioner Overstated misfortunes to cover deductible Arson, deliberate terminate misfortunes

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Health Care Fraud Billing for administrations not rendered Upcoding Unbundling Billing administrations Corporate/establishment misrepresentation

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WHY does it happen? Pain free income Viewed as "harmless" Recoup monies Little hazard Pressure for deals/commissions

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What would we be able to do Industry Establish antifraud plans Know who your client is as well as the hazard you are expecting Regulators Communicate the antifraud message Establish compelling impediments Law requirement Pursue criminal activities against the individuals who abuse the Laws.

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Reporting Fraud Consumers may report protection extortion by calling 1-888-327-8818 Insurance Fraud Hotline Sponsored by Texas Department of Insurance Online Reporting Available www.tdi.state.tx.us Follow connection to "Protection Fraud"

SPONSORS