Texas Gov. Signs Insurance Fraud Legislation

June 20, 2005

The Texas Committee on Insurance Fraud reported that Gov. Rick Perry has signed legislation making it tougher on criminals who commit insurance fraud in Texas. All three bills were strongly supported by the committee.

Senate Bill 871 by State Sen. Eddie Lucio of Brownsville gives prosecutors a stronger hand in sentencing criminals who intentionally, knowingly or recklessly commit insurance fraud.

House Bill 2388 by State Rep. Senfronia Thompson of Houston will help state officials determine how bad insurance fraud is in Texas. HB 2388 calls for every insurance company in Texas to report their cases of insurance fraud to the Texas Department of Insurance Fraud Unit. For the first time fraud investigators will know how prevalent the crime is, its cost and where it is taking place. This will allow the insurance commissioner to pinpoint his resources in fighting insurance fraud cases.

HB 3376 by State Rep. Larry Taylor of League City extends the statute of limitations in fighting insurance fraud from three to five years, increases penalties, more clearly defines the act of insurance fraud and strengthens the money laundering statute.

The Texas Committee on Insurance Fraud also supported legislation that addressed workers’ compensation fraud. The insurance fraud language that Committee members had sought can be found in HB 7, which was signed June 1 by Gov. Perry.

Texas Committee on Insurance Fraud Chairman Craig Sparks said the legislation is the committee’s first step toward reducing what is believed to be a billion dollar crime in Texas.

“Giving Texas prosecutors the right tools to fight insurance fraud will benefit every Texan,” Sparks said. “States that have had success in fighting insurance fraud have seen reduced insurance rates.”

Sparks added, “In the past repeat offenders have found insurance fraud as an easy way to make money. We’re hoping this legislation will help bring this criminal activity to a screeching halt.”

The Texas Committee on Insurance Fraud was created in 2003 in an effort to bring state regulators and the insurance industry together to help fight insurance fraud. The committee’s participants include every major insurance company in Texas, the Texas Department of Insurance, the Texas District and County Attorney’s Association, the International Association of Special Investigative Units, the National Insurance Crime Bureau, the Coalition Against Insurance Fraud, the Independent Insurance Agents of Texas, the Texas Association of Business, AARP and the Office of the Attorney General.

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