NAII Supports Mass. Bill to Criminalize Insurance Fraud

May 7, 2003

The National Association of Independent Insurers says it is supporting a bill, currently pending in the Massachusetts Senate, that would impose jail time and heavy fines for insurance fraud, indicating that its passage “would help address the Bay State’s huge fraud problem and give prosecutors another tool in their attempt to crack down on this growing concern.”

“Our association was instrumental in drafting S.B. 170 and we’re doing our best to convince legislators of the importance of making insurance fraud a criminal offense,” stated Gerald L. Zimmerman, NAII senior counsel. The Senate Criminal Justice Committee will hear the bill later this week.

“SB. 170 proposes imprisonment for up to 2 and one-half years or a fine of up to $5,000 or both for anyone employing or acting as a “runner” for the purpose of defrauding an insurer. Runners are paid to find clients, patients or customers for fraudulent health care providers, which in turn bill insurers for the alleged service,” said the NAII. “Insurance fraud is a growing concern in Massachusetts. According to the Boston Globe, the illegal runners business is helping to fuel an estimated $80 million in suspected fraudulent personal injury claims, with consumers paying the price in higher premiums.”

Zimmerman indicated that “S.B. 170 will provide one additional and necessary weapon in the fight against insurance fraud and help rein in the improper use of runners. By criminalizing certain aspects of the use of ‘runners,’ the bill will make it harder for unscrupulous lawyers and providers and their affiliates to perpetrate their fraudulent schemes. “

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