Virginia Amends Document Access Law to Assist Fraud Investigations

August 10, 2012

As a result of legislation passed by the 2012 Virginia General Assembly, the Virginia State Police (VSP) will find it a little easier to get the documents necessary to fully investigate insurance fraud referrals.

Effective July 1, 2012, §52-38 of the Code of Virginia, requiring insurance companies and professionals to provide the VSP all requested documents deemed pertinent in the investigation of insurance fraud, has been expanded to include all evidence, documentation and related materials, whether written or electronic, that are located in the Commonwealth or may be accessed electronically by an insurer or insurance professional conducting business in the Commonwealth.

Prior to this amended legislation, the code referenced only documents located in Virginia. Insurance companies and insurance professionals doing business online only or located outside the state, but have documents readily available electronically, will now be required to submit those documents to the Department when requested.

Other sections of the code relating to confidentiality and immunity from liability remained unchanged. Simply put, documents and evidence submitted to the VSP in relation to an insurance fraud case are confidential and will not be available for public inspection. In addition, persons submitting information related to an insurance fraud investigation are immune from liability.

Also unchanged is the section of the code, § 52-40, that refers to the duties of insurers, their employees and insurance professionals, which states if any insurer, any employee of an insurer or any insurance professional has knowledge of, or has reason to believe that insurance fraud will be, is being, or has been committed, they must notify the Department of State Police. The amended legislation should make it easier for insurers to comply with this section of the code.

It’s estimated to add as much as $1,000 per Virginia household to the cost of goods and between $200 and $1,000 per year in increased premiums.

Source: Virginia State Police Insurance Fraud Program

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