California Considering Protecting Insurers from Defamation Lawsuits

May 15, 2009

The California Senate is considering a bill that would “immunize” insurers from potential defamation lawsuits when they meet to discuss fraud trends with insurance regulators and prosecutors, the Coalition Against Insurance Fraud said.

According to the bill text, “existing law generally provides for the prevention, detection, and investigation of insurance fraud. Under existing law, insurers are required to disclose to an authorized governmental agency information relative to incidents of workers’ compensation fraud, as specified. SB 156 would authorize the Department of Insurance or a district attorney to convene meetings with insurers to discuss emerging trends and schemes involving insurance fraud and would provide that any person sharing information pursuant to that authorization would be protected from civil liability, as specified.”

“This legislation will be an excellent tool for fraud fighters in their ongoing efforts against insurance schemes. Allowing more dialogue about fraud trends will help focus more resources against these crimes,” the Coalition wrote to Sen. Wright, the bill’s sponsor,

However, the Coalition cautioned that SB 156 faces an uncertain future, noting trial lawyers oppose the measure.

The bill currently sits in the Judiciary Committee, which often serves as a graveyard for bills, the Coalition said.

Sources: California Legislature, CAIF

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