Flood Outlines Fraud-Fighting Needs at TCIF

February 12, 2004

Elliott Flood, vice president of special investigations for Texas Mutual Insurance Company, addressed the Texas Committee on Insurance Fraud (TCIF) recently. Flood discussed workers’ compensation fraud, one of several types of insurance fraud covered at the meeting.

“Of course, we need to strengthen existing laws, but we also need the means to enforce the law,” said Flood. “To do that, we need three things: money, resources and expertise.”

Flood noted that one of the biggest stumbling blocks to enforcement is that some district attorneys are reluctant to prosecute insurance fraud. This is especially true when the case involves health care provider fraud or premium fraud, the two most costly types of fraud in the workers’ comp system.

“To be fair to these district attorneys, they often don’t have the technical knowledge to handle white-collar crimes,” commented Flood. “Unlike so-called regular crimes, prosecuting insurance fraud, especially premium fraud or health care provider fraud, may require intensive record reviews and an in-depth understanding of [Texas Workers’ Compensation] Commission fee guidelines and rules. We need prosecutors who are dedicated to fighting insurance fraud.”

Reps. Jack Stick and Larry Taylor also attended the meeting. Both men said they supported TCIF’s efforts.

“The continuation of insurance reform will be a critical element in the next session,” said Stick. “Insurance fraud is a priority.”

Taylor agreed with Stick and added that a big part of TCIF’s mission will be educating the public and his fellow legislators on the high cost of insurance fraud. TCIF Chairman Craig Sparks said insurance fraud costs an estimated $120 billion per year, nationally.

Other TCIF speakers included Insurance Commissioner José Montemayor, Dennis Pompa of the Texas Department of Insurance, Dave Hennings of the National Health Care Anti-Fraud Association, Beverly Boone of the Automobile Insurance Agents of Texas, Thomas Dixon of the National Insurance Crime Bureau, Howard Goldblatt of the Coalition Against Insurance Fraud, Jay Thompson of the Association of Fire & Casualty Companies of Texas, and Mark Hanna of the Insurance Council of Texas.

TCIF began as an informal discussion between the Insurance Council of Texas and the fraud unit of the Texas Department of Insurance. The committee hopes to lead a more coordinated assault on insurance fraud at every level by working with insurance carriers, state and county agencies, and national organizations.

TCIF will meet again on April 21 at the Texas Department of Insurance in Austin.

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