TDI to Host Fraud Conference

January 28, 2004

On Jan. 29 and 30, 2004, the Texas Department of Insurance (TDI) will host a statewide insurance fraud conference at its headquarters in Austin, highlighting anti-fraud efforts. The department said an estimated 150 local, county, state, federal and industry investigators will be on hand to hear about the latest insurance fraud schemes and methods to combat them effectively.

“The purpose of the conference is to bring in an array of specialists to explore and discuss insurance fraud in all its many forms,” said TDI Associate Commissioner for Insurance Fraud Dennis Pompa. “We’re going to make sure the word gets out that Texas is not a good state in which to practice insurance fraud.”

According to Pompa, there are two basic types of insurance fraud: opportunistic, when an individual decides to exaggerate losses on a legitimate claim; and organized fraud operations, which can include deceptive practices by insurance agents, fraudulent health insurance schemes, staged accidents and exaggerated injuries, and disability fraud. The two-day conference will cover a variety of fraud topics, including tips for referring fraud cases and best practices in investigating fraud.

The conventional attitude used to be that insurance fraud is a “victimless crime.” Recent studies have shown, however, that the average household pays an estimated extra $200 to $300 a year for its auto and homeowners insurance premiums because of fraud. When life, health, and disability insurance are factored in, the estimated cost to each family is over $1,000 a year in extra premium payments and the cost of goods and services.

Insurance fraud is the second most profitable crime after drug trafficking. In fact, insurance fraud has become so lucrative that it has drawn the attention of organized crime. It’s also drawing the attention of state and federal law enforcement officials.

The TDI Fraud Unit continues to be one of the most effective units in the nation. In 2002, the TDI Fraud Unit secured $12.9 million in restitution from cases submitted for criminal prosecution, the second-highest total in the country. The TDI Fraud Unit accomplished that with only 30 employees, 18 of which are fulltime fraud investigators.

The Texas Department of Insurance maintains a toll-free telephone hotline for reporting insurance fraud: (888) 327-8818.

Online fraud reporting is also available for consumers at, and for insurance companies at

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