Thursday, November 5, 2009

Anti-Fraud Groups: Abolishing State's Fraud Unit Will Increase Cost of Insurance

national insurance

WASHINGTON, Nov. 5 /PRNewswire-USNewswire/ -- Consumers in Arizona should
expect to pay more for insurance in the future if a budget proposal to axe the
state's fraud bureau goes through, three national anti-fraud groups warned
today. A preliminary proposal being considered in the state would abolish the
fraud unit in the Department of Insurance, and halt the state's investigations
of a wide range of insurance crimes.

The three groups -- the National Insurance Crime Bureau, the Coalition Against
Insurance Fraud and the International Association of Special Investigation
Units -- urged Gov. Jan Brewer to resist the cutback, citing an increased
level of insurance fraud during the current down economy. In the letter to
Gov. Brewer, the groups said the state already has reduced the number of
fulltime employees in the Fraud Unit from 14 to 4. "Since criminals seek the
path of least resistance, any further cuts to the Fraud Unit would put the
economic health of Arizona and its residents at risk," the groups warned.

Organized fraud rings will rush to fill the enforcement void left by the Fraud
Unit's demise, the three groups predicted. "Without question, there will be an
eventual and inevitable rise in insurance costs for Arizona businesses and
Arizona residents," the letter to the governor further warned.

A total of 47 state bureaus around the country have been created to
investigate and prosecute insurance fraud. Several have faced budget cuts this
year, but none have been wholly eliminated. Arizona would be the first.