PIP Insurance Fraud The Subject Of A Tampa Press Conference By CFO Sink And Pending Legislation
Staged accidents, phony billing, and other types of personal injury protection (PIP) insurance fraud continue to be a major problem in Florida and the investigation and prosecution of PIP fraud is a high priority for the state’s Division of Insurance Fraud. Those were the main messages of a March 5, 2010, press conference held in Tampa by Florida Chief Financial Officer Alex Sink along with representatives of the City of Tampa and Allstate Insurance Company. As CFO, Sink oversees the Department of Financial Services’ Division of Insurance Fraud. According to a press release from the CFO’s office, the Division has arrested 240 people for PIP fraud since July 2009, resulting in 156 convictions. Every Florida driver pays higher insurance premiums because of PIP fraud and the CFO said the Division is “getting more and more referrals, which means we’re putting many of these scammers behind bars.” Last year, PIP accounted for 30 percent of the fraud referrals to the Division, making it the most reported type of fraud. Tampa was a fitting place to hold the press conference as it is ranked number two nationally in questionable auto insurance claims according to the National Insurance Crime Bureau (Brooklyn, New York ranked first).
The legislature is also working on the issue of PIP fraud. 2010 Florida House Bill 1447, filed by Rep. Bryan Nelson, is a comprehensive insurance fraud package currently at the committee level. It addresses PIP fraud on a number of fronts, ranging from crash reporting forms to health care clinic licensure and PIP claims payments, the latter containing a “fraud in part, fraud in whole” provision that allows an insurer to withhold a PIP claim payment in its entirety to a person engaging in PIP fraud, even if a portion of the claim is not fraudulent or false. The proposed legislation also allows carriers to limit sinkhole coverage, hold back the difference between actual cash value and replacement cost under a replacement cost policy until the property is repaired or replaced (see Travis’s March 1 post for a complete discussion of this important issue), and adds new requirements and penalties for fraud related to mitigation discounts, among other changes. We will continue to monitor this important legislation as well as the CFO’s ongoing efforts to combat insurance fraud.