Alliance in Support of S.C. Anti-Fraud Proposal

December 16, 2003

A proposal to create and fund an insurance fraud investigation and prosecution framework in South Carolina reportedly has the support of the Alliance of American Insurers.

The Omnibus Insurance Fraud and Reporting Immunity Act would establish a Fraud Unit within the Department of Insurance to investigate suspected cases. This unit would hand over cases to the Insurance Fraud Division of the Office of Attorney General, which would also continue its efforts to prosecute the cases.

“The Alliance applauds Insurance Director Ernie Csiszar’s efforts to put in place a mechanism to attack the fraud problem in South Carolina,” said Alliance Vice President and Southeast Regional Manager Robert Herlong. “A growing state like South Carolina faces the growing problem of fraud, but Director Csiszar is proactively addressing the issue, and his solution, if implemented, will put a serious dent in crimes related to insurance fraud.”

“The insurance industry spends $650 million annually trying to detect and deter fraud, not including the money paid out for undetected fraudulent claims,” said Kirk Hansen, the director of claims for the Alliance. “Dedicated insurance fraud units have shown dramatic results in the states that have created them so far.

“Insurance fraud is a societal attitude and problem that the insurance industry cannot completely address without adequate resources or authority. Perpetrators of insurance fraud need to be put in jail, not only to get them off the streets, but also to deter others who might be tempted to commit fraud. That’s why an aggressive approach like the one proposed by Director Csiszar is so important.”

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