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TEXAS COMMITTEE ON INSURANCE FRAUD POWER POINT PRESENTATION
#1 Slide – Putting a stop to Insurance Fraud
Today, I’m speaking on behalf of a brand new organization. This is a group of people who are meeting for the first time in Austin with one goal in mind – Putting a stop to insurance fraud across all lines of business.
#2 Slide – Insurance Council of Texas and the Texas Department of Insurance
This group is called the Texas Committee on Insurance Fraud. The Texas Committee on Insurance Fraud started out as an agreement between the Insurance Council of Texas, a nonprofit insurance trade organization that represents more than 500 P&C companies in Texas, and the Texas Department of Insurance.
2 #3 Slide – Texas Committee on Insurance Fraud Property & Casualty Workers Compensation Life Health Enforcement Education
To attack insurance fraud in every line of insurance the two groups quickly decided that representatives from life and health needed to be brought in as well as consumer groups, enforcement agencies and lawmakers. Group chairmen were named and the focus was put on P&C, Workers Comp, Life, Health, Enforcement and Education.
#4 Slide – Insurance Co. logos
The Committee reads like a who’s who in battling insurance fraud. Many of the participants are former FBI or hold decades of experience in law enforcement. They represent insurance companies such as State Farm, Allstate, Blue Cross Blue Shield, Prudential, The Hartford, Union Standard and others.
3 # 5 Slide – Governor’s Office Speaker of the House Lt. Governor’s Office
The Governors office, the Speakers office and the Lt. Governors office are all represented.
#6 Slide
AARP Office of Public Insurance Counsel Dallas County District Attorney Travis County District Attorney Texas District and County Attorney’s Association
Consumers groups like the AARP and the Office of Public Insurance Counsel are represented as well as prosecutors from the Dallas and Travis County District Attorneys Offices and the Texas District and County Attorney’s Association.
#7 Slide – Texas Committee on Insurance Fraud
So, why would all of these people come together with just one goal in mind? How bad is the situation?
4 #8 Slide – NICB
According to the National Insurance Crime Bureau, insurance fraud is one of the most costly crimes in America, ranking second to tax evasion. We’re all victims of insurance fraud because we pay for it through higher premiums.
#9 Slide – Ben Franklin with kite
Ever since Ben Franklin was flying kites back in the 1700s, insurance has been sold in the United States and you can bet there were cases of insurance fraud.
#10 Slide – Old drawing of person arrested.
We must not fool ourselves that this is a victimless crime. We all pay for it.
#11 Slide – $$$$
Regardless of who they are, insurance criminals are motivated by one thing – money. It’s all about greed and taking what isn’t rightfully theirs.
5 #12 Slide – Magazine graphics/charts
Insurance industry studies show that ten percent of all insurance claims are fraudulent. That adds up to $30 billion each year just in property and casualty clams. For you and me that adds up to $200 - $300 in higher insurance premiums every year. The other numbers you see represent the amount of premium dollar paid for bodily injury claims for auto policies involving fraud. Fifty percent of insurers see fraud as a serious problem. 38 states have insurance fraud bureaus and insurers spend $650 million each year trying to detect and deter insurance fraud.
#13 Slide – Health care fraud
If you look at fraud in health care, the numbers are staggering. Remember that 10% of all claims are fraudulent. Now figure that Americans spend $1.6 trillion on health care alone. Fraudulent health care claims represent a tremendous amount of money.
6 #14 Slide – Giant with two small people
Insurance fraud comes in many shapes and sizes. Insurance criminals range from organized fraud rings, to dishonest doctors and lawyers, to unscrupulous vehicle repair facility operators, to people in your neighborhood who pad a claim.
#15 Slide – Auto accident
On the P&C side, insurance fraud criminals devise elaborate staged vehicle accidents complete with fake injuries to collect on insurance policies. They intentionally destroy property or vehicles and lie to insurers about the supposed “accident.”
#16 Slide – House Fire
It’s not uncommon for people who are behind on their mortgage payments to set fire to their house. Many of these people get caught when investigators discover that much of the home’s furniture was moved to a storage facility before the fire was set.
7 #17 Slide – Worker on roof
Employers are hit with higher workers compensation insurance because of fake injuries. Oftentimes, employees who already have a low work performance and know they are going to be laid off will fake an injury to receive workers compensation benefits. These people are usually caught because they begin working at other jobs while continuing to cash their benefit checks.
#18 Slide – Investigator with camera
It takes special investigators to check on suspected injured workers to see that they are really telling the truth. Many times reportedly injured workers are caught on tape going to the gym lifting weights, mowing the lawn and enjoying life without having to go to work.
#19 Slide – Cartoon
It is amazing just how many ways people do try to get away with various insurance scams.
8 #20 Slide – Jail
There are all kinds of insurance schemes and if we’re lucky these people wind up behind bars. One man in Texarkana tried the old slip and fall routine in a Texarkana fast food restaurant. After falling to the ground, the man cursed all of the store’s employees saying he would sue. After refusing any assistance, the man went home where he proceeded to slam his knee with a ball peen hammer. His girlfriend who witnessed the event wasn’t too impressed and notified authorities, who placed the man in jail.
#21 Slide – Little White Lies
Normally, honest people sometimes tell their insurance companies “little white lies” to scam a few dollars.
#22 Slide – Odometer
Insurance fraud can come in the form of lowballing how many miles you say you drive so you can get a lower auto premium or
9 #23 Slide – Pix of jewelry/stereo/DVD
Falsely adding a few extra items to a claim when your home is robbed.
#24 Slide – Scanned magazine title – the Crooked Agent Problem
It’s not just consumers who are ripping off insurance companies. More than a couple of insurance agents have inflated premiums by secretly slipping unneeded coverage into policies. Some dishonest agents also pocket your premium checks instead of paying the policies – leaving you dangerously uncovered.
#25 Slide – Texas Dept. of Insurance Fraud shield
Just in the past two years the Texas Department of Insurance has shut down 10 companies and 51 agents for selling unauthorized health insurance.
10 #26 Slide – Insurance scams
TDI alone has more than 300 open investigations going on now against suspected unauthorized insurance scams in Texas. Without being licensed in Texas, these companies sell worthless health insurance policies. Most of the agents who sell these policies know the companies don’t have a license to operate in Texas.
#27 Slide –Life insurance policy
People do get hurt and sometimes killed when it comes to insurance fraud. More than one husband or wife has tried to cash in on a spouse’s life insurance policy after doing away with the better half. It’s not uncommon for people to plan their deaths on the high seas or overseas and then suddenly appear miraculously recovered and alive.
11 #28 Slide – Scanned Magazine graphic – Attitudes toward padded claims
Unfortunately, many people think insurance companies have an unlimited amount of money and they won’t miss a few dollars. Well, a few dollars here and a few dollars there add up. The top line of this chart shows the percentage of people surveyed who think it’s OK to increase the claim amount to make up for their deductible, while the bottom line indicates the percentage of the population who think its OK to increase the claim amount to make up for the premiums they pay. Fortunately, both of these numbers are going in the right direction – down.
#29 Slide – Texas Committee on Insurance Fraud
Members of the Texas Committee on Insurance Fraud are determined to get it across to all Texans that committing insurance fraud is a serious crime that will not be taken lightly. This Committee is looking to place special insurance fraud investigators in the various District Attorneys offices in order to prosecute these cases and if necessary, send these people to jail.
12 #30 Slide – Committee’s priorities Beef up District Attorney’s offices Strengthen penalties Allow investigators more time to catch criminals.
As I mentioned, the Committee is looking at ways to prioritize insurance fraud cases in the various DA’s offices. We know that insurance fraud cases are not as high profile as murder and other violent crimes, but we want criminals to know that they will be prosecuted. We want to strengthen penalties and demand full restitution from criminals who deplete the life savings of their victims through insurance scams or injuries. Oftentimes, it’s not easy catching the crooks who pad health insurance claims or burn their house down in the middle of night. Investigators need to be allowed more time to examine bank records and health reports to determine who is trying to get away with what. Too often, investigators have a deadline and if they haven’t made their case, the bad guy gets the money.
#31 Slide – State Capitol
We are already meeting with lawmakers and prosecutors who say now is the time to do something about insurance fraud.
13 #32 Slide – We are Making it Happen
All of our participants are meeting on a regular basis to fine tune our needs in catching criminals. Insurance is not designed by rocket scientists. Rates are determined by what goes in and what goes out. Winning the war against insurance fraud helps all of us.
#33 Slide – Texas Insurance Fraud Hotline 1-888-327-8818
There are three ways to prevent being a victim of insurance fraud. One is to report insurance fraud if you seeing it happening. Rather than being an accessory to a crime, call the Texas Insurance Fraud Hotline at 1-888-327-8818.
#34 Slide – Contact your agent or the Texas Department of Insurance 1-800-252-3439 www.tdi.state.tx.us
If you suspect that you may be the victim of insurance fraud or you question the validity of an agent or a company, there are places to turn for help. You should first turn to your agent. He is getting paid to help you. And you can turn to the Texas Department of Insurance. They have consumer protection specialists standing by to take your call and they can tell you if an agent or company is licensed to do business in Texas.
14 #35 Slide – Police officer and detective
The third way of preventing Texans from becoming victims of insurance fraud is through education. Letting people know that insurance fraud is a crime and punishable by lengthy jail sentences and restitution should be a deterrent to most people. You don’t want to wind up meeting these people at your front door.
#36 Video – Run video/audio up
To leave on a humorous note, you know I talked about staged accidents. You never know who might be out there waiting to get you.
#37 Slide – Blank
Thank you very much.