Model insurance fraud act
Summary of provisions
Rationale of provisions
Definitions
Fraudulent insurance act
Unlawful insurance act
Criminal penalties
Restitution
Administrative penalties
Civil remedies
Exclusivity of remedies
Cooperation
Immunity
Regulatory requirements
Model language
Preamble
Section 1. Definitions
Section 2. Fraudulent Insurance Act
Section 3. Unlawful Insurance Act
Section 4. Criminal Penalties
Section 5. Restitution
Section 6. Administrative Penalties
Section 7. Civil Remedies
Section 8. Exclusivity of Remedies
Section 9. Cooperation
Section 10. Immunity
Section 11. Regulatory Requirements
Background
Insurance fraud in the United States — whether committed by claimants, providers, employees or insurers — is pervasive and expensive; its cost to consumers, the insurance industry and governments in 1996 was an estimated $85.4 billion. Direct or indirect costs attributable to insurance fraud amounted to more than $1,000 per American family.
Insurance fraud increases premiums, thus decreasing consumer capital for other goods and services, and overall lowers our nation's standard of living. Businesses have been forced to reduce staff, restrict growth and in some cases, relocate because of high levels of fraud. Further, a high percentage of insurance company insolvencies have been linked to internal fraud, and have left claimants in financial ruin. Insurance fraud is perceived to be a high-reward, low-risk endeavor; without substantive penalties, it's viewed as an easy way to make a buck.
The coalition believes the effort to combat insurance fraud must be a partnership among consumers, the insurance industry and government. Currently, states vary in their statutory efforts to fight insurance fraud. A total of 44 states currently define insurance fraud as a specific crime, and 37 states further define certain classifications of insurance fraud as a felony.
Insurance fraud laws are essential to combat the increasing effect of fraud on the cost of insurance. There are three major categories of fraud: claims fraud, applications fraud, and fraud committed by employees in the insurance industry including agents, adjusters, brokers or persons claiming to be in the business of insurance. Any comprehensive insurance fraud act should address all three categories. Then, strict enforcement will help restrain prices and keep the insurance system financially sound. Also, enforcement brings fairness to the system so honest consumers don't subsidize, through unnecessarily high premiums, those who cheat the system.
This legislation establishes insurance fraud as a specific crime and as a felony in felony cases. It attacks insurance fraud at the source and can be used as a framework for additional laws, such as creating an insurance fraud bureau. The model will help reduce fraudulent claims paid by insurers. Since the model also covers fraud committed by insurers and those who purport to be insurers, it would curtail fraud committed against consumers and lessen financial disruption of the insurance industry.
Specifically, the model includes a cohesive attack on fraud with both civil and criminal penalties for committing what's defined as either a fraudulent insurance act or an unlawful insurance act. The model addresses all forms of insurance fraud, including claims fraud, underwriting fraud, deceptive sales practices and scams by insurance operators.
The fraudulent act is an act based on an intent to defraud someone, whether an insurance company or a consumer. The unlawful insurance act requires a lower standard of proof and is designed to attack scams such as medical mills and fraud rings in which the leaders often are able to shield themselves from prosecution under current laws.
The model significantly expands the definition of insurance fraud that currently exists in state laws and other models, as well as the remedies available to both the consumer and insurer when defrauded. The bill affords the consumer an additional level of protection particularly when it comes to shutting down the bogus insurance companies. The bill also sets strict penalties for licensed practitioners who are found in violation of the fraud act.
The legislation puts insurers on the front line in the fight against fraud. Insurers would be required to cooperate with law enforcement in cases of suspected fraud. In return, the model contains the broadest civil immunity for anyone who shares information about suspected fraud. The model also requires insurers to draft anti-fraud plans and to place fraud warnings on applications and claims forms, but avoids micro-management of anti-fraud efforts by insurance departments.
Since the coalition first proposed this model in 1995, several states have utilized its provisions in their efforts to enact anti-fraud legislation. Tennessee enacted this model as a workers compensation fraud law in 1996. Colorado utilized the fraud plan provisions in enacting its fraud law in 1996. Arkansas utilized the fraud plan language in writing its regulations to meet the requirements of the 1997 state law requiring anti-fraud initiatives. Nevada utilized the practitioner penalties provisions in drafting its 1997 law requiring license review; and New Jersey enacted in 1998 very strict medical provider sanctions similar to the coalition’s model language. New Mexico, Maine and Virginia all used elements of the model in enacting stricter anti-fraud laws in 1998.
Rationale of the Provisions
Model Insurance Fraud Act
(Adopted March 2, 1995; amended September 20, 1995)
Section 1. Definitions
This section defines terms used in the legislation, including “insurance
transaction” and “insurer.” The term “insurer“
includes anyone purported to be in the business of insurance as
well as those authorized to do business in that state.
The bill also defines “practitioner” as any individual
who is, or is required to be, a licensee of the state and whose
services are compensated in whole or part by insurance proceeds.
This includes medical providers, lawyers, agents, building contractors,
adjusters and automotive repair shops.
These definitions are written to cover all forms of insurance fraud,
as discussed above, as well as those who are most likely to commit
fraud, and are designed to establish greater consistency from state
to state.
Section 2. Fraudulent Insurance Act
A fraudulent insurance act is defined as an act committed by anyone
who, knowingly and with intent, defrauds another person for gain.
A fraudulent act includes claims fraud, application fraud and the
legislation has a separate provision dealing with insurer fraud.
Individuals who conspire, aid and/or abet a fraudulent act also
are covered by the definition. A conviction under these provisions
must meet the criminal burden of proof beyond a reasonable doubt.
Among the actions that fall under the fraudulent act is the preparation
and presentation of false information affecting:
• the application for any insurance policy;
• an insurance claim pursuant to any policy;
• any payments made pursuant to any insurance policy.
The actions that would fall under the insurer fraud elements of the fraudulent act include:
• the solicitation for sale of any policy or purported policy;
• an application for certificate of authority;
• misrepresentation of the financial condition of any insurer.
This section makes all forms of insurance fraud, as
well as attempts to commit fraud, a specific crime. Without definite
language targeting attempts, conspiracies, and aiding or abetting
fraud, an insurer often must pay false claims before a crime can
be said to be committed; even then, others involved in the fraud
may go free. The provision protects consumers from unscrupulous
operators by expanding the definition of fraud to include schemes
perpetrated by insurers or those who claim to be in the insurance
business.
Section 3. Unlawful Insurance Act
An unlawful insurance act is defined as an act committed by anyone
who commits or allows to be committed an act with “an intent
to induce reliance.” Unlike the fraudulent insurance act, “intent
to defraud” is not required; the act utilizes a form of recklessness
standards. Convictions under this section must meet the civil standard
of proof, which requires a preponderance of evidence.
The legislation separates the definition for unlawful insurance actions affecting claims and applications fraud from fraud committed by insurers. Actions falling under the claims/applications fraud portion of the unlawful act include:
• the application for any insurance policy;
• an insurance claim pursuant to any policy;
• payments made in accordance with the terms of any policy.
Actions falling under the insurer fraud portion of the unlawful act include:
• an application for certificate of authority;
• misrepresentation of the financial condition of an insurer;
• the solicitation for sale of any policy or purported policy.
This section expands the legal definition of insurance
fraud into an entirely new arena. Those who have shielded themselves
from the actual act of fraud—signing a false claim form, for
example—can be charged through a civil action, which requires
a different standard of proof. This provision is designed to punish
individuals who create a fraudulent scheme, such as a medical mill,
but have underlings execute it as the schemers reap the bulk of
the illegal reward. Like the provisions against fraudulent acts,
this section also protects consumers from unscrupulous operators
by expanding the definition of fraud.
Section 4. Criminal Penalties
The criminal penalties only apply to those persons charged with
committing a fraudulent insurance act. The penalties use a stepladder
approach and increase based on the amount defrauded and/or previous
convictions for fraud. The provisions are meant to dovetail with
the existing penalties already in place in the states for other
similar crimes. The penalties would allow the courts and the prosecution
to segregate or aggregate the economic loss suffered by the persons
defrauded. The highest felony charge includes those charged with
committing a fraudulent insurance act where the offense places anyone
at risk of death or serious bodily injury.
Criminal sanctions must be severe enough to act as
a deterrent rather than be treated by perpetrators as part of the
cost of doing the business of fraud. The commonly used stepladder
approach deters repeat offenders as well as particularly egregious
forms of fraud; states are left free to define those levels as the
legislature sees fit.
Section 5. Restitution
Anyone convicted of committing a fraudulent act would be required
to make monetary restitution for any financial loss due to the violation.
The legislation grants the court the ability to order the restitution
to be paid in a lump sum or installments.
Restitution for victims is codified both for the purpose of providing
justice and as a way to seize perpetrators’ ill-gotten gains.
Also, by allowing the court to decide the payment schedule, you
assure that the person involved has the financial ability to give
restitution to the victims of the fraud.
Section 6. Administrative Penalties
The legislation includes language requiring notification of the
appropriate state licensing authority if any practitioner is found
guilty of a fraudulent insurance act. The licensing authority would
be required to hold a hearing to consider whether administrative
sanctions (including license revocation) are in order against practitioners
convicted of a fraudulent insurance act. Practitioner is defined
in the act to include all individuals who are licensed by the state
and compensated through the insurance system.
Appropriate sanctions against licensed practitioners
are included because depriving them of their primary livelihood
is an additional deterrent, especially against repeat offenses.
By mandating licensing authorities to have hearings on those practitioners
who have violated this act, you assure that the public will be protected
from those individuals who through their fraudulent activity violate
the public trust.
Section 7. Civil Remedies
Individuals charged with an unlawful insurance act face these provisions.
Anyone defrauded by an unlawful insurance act can recover the profit
or payment lost as a result of the violation, plus reasonable attorney
fees and legal fees not to exceed $5,000.
These provisions also can be used against those charged
with a fraudulent insurance act. The state attorney general or any
appropriate prosecuting agency would have the authority to conduct
civil proceedings on behalf of the state insurance department and
the victims of a fraudulent insurance act. If the court finds the
person has committed the fraudulent act, a $5,000 fine for each
violation would be assessed. Victims can recover the profit or payment
lost because of the violation, reasonable attorney fees and court
costs, and all other economic damages resulting from the violation.
The legislation also allows victims to recover treble damages if
there’s clear evidence the offense was part of a pattern or
practice of violations of the fraudulent insurance act.
The legislation also would allow the states to set
a statute of limitations either based on the amount of years after
the commission of the act or the amount of years after the act was
discovered.
Civil remedies may be sought in cases where it’s
difficult to prove charges beyond a reasonable doubt; this is often
true for acts defined as “unlawful.” Attorney and legal
fees in these cases are limited to $5,000 to eliminate any profit
motive, which should deter frivolous suits. In criminal cases, civil
penalties and the threat of collecting treble damages is an additional
deterrent. This provision also makes it easier for prosecutors to
bring charges against anyone who commits a fraudulent act. Again,
victims are assured of restitution and recovery.
Section 8. Exclusivity of Remedies
The legislation restricts the civil remedies provisions so they
may not be used in conjunction with, or in addition to, any other
remedies available under law.
The exclusion avoids the potential for a plaintiff to bring actions
under more than one statute for the same act, a kind of double jeopardy.
Section 9. Cooperation
Insurers are required to disclose information about suspected insurance
fraud to any court, law enforcement agency or insurance department.
The bill allows a disclosing insurer to have the right to receive
case-related information from the agency to which the insurer submitted
material. The legislation would protect any information that is
privileged. Also, the provision would preclude anyone from receiving
restitution if they fail to cooperate with the request for information.
This section prevents insurers from simply paying
fraudulent claims and then passing the costs on in the form of higher
premiums. Under this provision, suspected cases could no longer
be ignored. To assist insurers in their in-house attempts to curtail
fraud, government agencies in turn would have to disclose relevant
information about reported cases.
Section 10. Immunity
The bill grants civil immunity to anyone who, in the absence of
actual malice, furnishes information about insurance fraud. The
bill allows exchange of information between insurers and any other
organization if it’s for the purpose of detecting and deterring
insurance fraud. The section further allows for recovery of reasonable
legal fees if any action is brought against any person in which
they have been found to be immune from liability.
This section encourages reporting of suspected fraud.
It allows anyone who has that information to report it without fear
of being sued for defamation, libel, slander or similar offenses,
which has had a chilling effect in many cases. Also, many frauds,
especially organized rings, are uncovered only when insurers discover
the same claims are filed with multiple insurers, or the same names
or addresses appear in many claims. This provision protects insurers
who share information among themselves as long as the information
is used exclusively for the prevention, detection and prosecution
of fraud. The restrictions helps protect individual privacy and
help deter abuses of using such information.
Section 11. Regulatory Requirements
All insurers have six months after the law’s effective date
to prepare, implement and maintain an anti-fraud plan. The legislation
establishes a framework for the plan that includes procedures to:
• prevent and detect all forms of fraud;
• educate appropriate employees on detection and the anti-fraud plan;
• hire or contract for fraud investigators;
• report fraud to the appropriate authorities for investigation and prosecution.
The anti-fraud plan may be reviewed by the insurance
commissioner and he or she may examine the insurer’s compliance
with its anti-fraud plan. The anti-fraud plans that are submitted
to the insurance department would be exempt from the state’s
public records act. Insurers also are required to print or attach
fraud warnings on all applications and claims forms no later than
six months after the effective date of the law. Insurers face a
fine for failing to prepare, implement, maintain and submit an anti-fraud
plan to the insurance department.
There’s considerable evidence showing that
insurers who invest in an active fight against fraud receive a substantial
return on the investment. However, not all insurers fight fraud
voluntarily; their customers bear that cost. By requiring all insurers
to have a plan to fight fraud, and then ensuring they comply with
that plan, the playing field is leveled. All insured consumers will
benefit. Also, printed fraud warnings are a reminder against illegal
acts and will help deter claims fraud.
Model
language: Model Insurance Fraud Act
(Adopted March 1995; amended September 1998)
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ________________________
The legislature finds that insurance fraud is pervasive and expensive, costing consumers and the business community of this state millions of dollars each year. Each family spends in excess of several hundreds of dollars each year in direct and indirect costs attributable to insurance fraud. Insurance fraud increases premiums, places businesses at risk and is a leading cause of insurance company insolvencies. Insurance fraud reduces consumers ability to raise their standard of living and decreases the economic vitality of this state.
Therefore, the legislature believes that the state of __________ must aggressively confront the problem of insurance fraud by facilitating the detection, reducing the occurrence through stricter enforcement and deterrence, requiring restitution and increasing the partnership among consumers, the insurance industry and the state in coordinating efforts to combat insurance fraud by enacting the following Act.
Table of Contents
Section 1. Definitions
Section 2. Fraudulent Insurance Act
Section 3. Unlawful Insurance Act
Section 4. Criminal Penalties
Section 5. Restitution
Section 6. Administrative Penalties
Section 7. Civil Remedies
Section 8. Exclusivity of Remedies
Section 9. Cooperation
Section 10. Immunity
Section 11. Regulatory Requirements
As used in this act, unless the context requires otherwise, the following terms have the meaning ascribed to them in this section.
Actual Malice. “Actual Malice” means knowledge that information is false, or Reckless disregard of whether it is false.
Conceal. “Conceal” means to take affirmative action to prevent others from discovering information. Mere failure to disclose information does not constitute concealment. Action by the holder of a legal privilege, or one who has a reasonable belief that a privilege exists, to prevent discovery of privileged information does not constitute concealment.
Insurance Policy. “Insurance Policy” means the written instrument in which are set forth the terms of any certificate of insurance, binder of coverage or contract of insurance (including a certificate, binder or contract issued by a state-assigned risk plan); benefit plan; nonprofit hospital service plan; motor club service plan; or surety bond, cash bond or any other alternative to insurance authorized by a state’s financial responsibility act. Insurance Policy also is any other instruments authorized or regulated by the department of insurance.
Insurance Professional. “Insurance Professional” means sales agents, managing general agents, brokers, producers, adjusters and third party administrators.
Insurance Transaction. “Insurance Transaction” means a transaction by, between or among: (1) an Insurer or a Person who acts on behalf of an Insurer; and (2) an insured, claimant, applicant for insurance, public adjuster, Insurance Professional, Practitioner, or any Person who acts on behalf of any of the foregoing, for the purpose of obtaining insurance or reinsurance, calculating insurance Premiums, submitting a claim, negotiating or adjusting a claim, or otherwise obtaining insurance, self-insurance, or reinsurance or obtaining the benefits thereof or therefrom.
Insurer. “Insurer” means any Person purporting to engage in the business of insurance or authorized to do business in the state or subject to regulation by the state, who undertakes to indemnify another against loss, damage or liability arising from a contingent or unknown event. “Insurer” includes, but is not limited to, an insurance company; self-insurer; reinsurer; reciprocal exchange; interinsurer; risk retention group; Lloyd’s insurer; fraternal benefit society; surety; medical service, dental, optometric or any other similar health service plan; and any other legal entity engaged or purportedly engaged in the business of insurance, including any Person or entity which falls within the definition of “Insurer” found within the _______________ Insurance Code §__________.
Pattern or practice. “Pattern or practice” means repeated, routine or generalized in nature, and not merely isolated or sporadic.
Person. “Person” means a natural person, company, corporation, unincorporated association, partnership, professional corporation, agency of government and any other entity.
Practitioner. “Practitioner” means a licensee of this state authorized to practice medicine and surgery, psychology, chiropractic or law or any other licensee of the state or Person required to be licensed in the state whose services are compensated either in whole or in part, directly or indirectly, by insurance proceeds, including but not limited to automotive repair shops, building contractors and insurance adjusters, or a licensee similarly licensed in other states and nations or the licensed practitioner of any nonmedical treatment rendered in accordance with a recognized religious method of healing.
Premium. “Premium” means consideration paid or payable for coverage under an Insurance Policy. “Premium” includes any payments, whether due within the Insurance Policy term or otherwise, and deductible payments whether advanced by the Insurer or Insurance Professional and subject to reimbursement by the insured or otherwise, any self insured retention or payments, whether advanced by the Insurer or Insurance Professional and subject to reimbursement by the insured or otherwise, and any collateral or security to be provided to collateralize obligations to pay any of the above.
Premium Finance Company. “Premium Finance Company” means a Person engaged or purporting to engage in the business of advancing money, directly or indirectly, to an Insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, including but not limited to loan contracts, notes, agreements or obligations, wherein the insured has assigned the unearned Premiums, accrued dividends, or loss payments as security for such advancement in payment of Premiums on Insurance Policies only, and does not include the financing of insurance Premiums purchased in connection with the financing of goods and services.
Premium Finance Transaction. “Premium Finance Transaction” means a transaction by, between or among an insured, a producer or other party claiming to act on behalf of an insured and a third-party Premium Finance Company, for the purposes of purportedly or actually advancing money directly or indirectly to an Insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, wherein the insured has assigned the unearned Premiums, accrued dividends or loan payments as security for such advancement in payment of Premiums on Insurance Policies only, and does not include the financing of insurance Premiums purchased in connection with the financing of goods and services.
Reckless. “Reckless” means without reasonable belief of the truth, or, for the purposes of Section 3(c), with a high degree of awareness of probable insolvency.
Withhold. “Withhold” means to fail to disclose facts or information which any law (other than this act) requires to be disclosed. Mere failure to disclose information does not constitute “withholding” if the one failing to disclose reasonably believes that there is no duty to disclose.
Section 2. Fraudulent Insurance Act
Any Person who, knowingly and with intent to defraud, and for the purpose of depriving another of property or for pecuniary gain, commits, participates in or aids, abets, or conspires to commit or solicits another Person to commit, or permits its employees or its agents to commit any of the following acts, has committed a Fraudulent Insurance Act:
(a) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, claimant or applicant to an Insurer, Insurance Professional or Premium Finance Company in connection with an Insurance Transaction or Premium Finance Transaction, any information which contains false representations as to any material fact, or which Withholds or Conceals a material fact concerning any of the following:
(1) The application for, rating of, or renewal of, any Insurance Policy;
(2) A claim for payment or benefit pursuant to any Insurance Policy;
(3) Payments made in accordance with the terms of any Insurance Policy;
(4) The application used in any Premium Finance Transaction;
(b) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an Insurer, Insurance Professional or a Premium Finance Company in connection with an Insurance Transaction or Premium Finance Transaction, any information which contains false representations as to any material fact, or which Withholds or Conceals a material fact, concerning any of the following:
(1) The solicitation for sale of any Insurance Policy or purported Insurance Policy;
(2) An application for certificate of authority;
(3) The financial condition of any Insurer;
(4) The acquisition, formation, merger, affiliation or dissolution of any Insurer;
(c) Solicits or accepts new or renewal insurance risks by or for an insolvent Insurer.
(d) Removes the assets or records of assets, transactions and affairs or such material part thereof, from the home office or other place of business of the Insurer, or from the place of safekeeping of the Insurer, or destroys or sequesters the same from the Department of Insurance.
(e) Diverts, misappropriates, converts or embezzles funds of an Insurer, an insured, claimant or applicant for insurance in connection with:
(1) An Insurance Transaction;
(2) The conduct of business activities by an Insurer or Insurance Professional;
(3) The acquisition, formation, merger, affiliation or dissolution of any Insurer.
It shall be unlawful for any Person to commit, or to attempt to commit, or aid, assist, abet or solicit another to commit, or to conspire to commit a Fraudulent Insurance Act.
Section 3. Unlawful Insurance Act
Any Person who commits, participates in, or aids, abets, or conspires to commit, or solicits another Person to commit, or permits its employees or its agents to commit any of the following acts with an intent to induce reliance, has committed an Unlawful Insurance Act:
(a) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, claimant or applicant to an Insurer, Insurance Professional or a Premium Finance Company in connection with an Insurance Transaction or Premium Finance Transaction, any information which the Person knows to contain false representations, or representations the falsity of which the Person has Recklessly disregarded, as to any material fact, or which Withholds or Conceals a material fact, concerning any of the following:
(1) The application for, rating of, or renewal of, any Insurance Policy;
(2) A claim for payment or benefit pursuant to any Insurance Policy;
(3) Payments made in accordance with the terms of any Insurance Policy;
(4) The application for the financing of any insurance Premium;
(b) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an Insurer, Insurance Professional or a Premium Finance Company in connection with an Insurance Transaction or Premium Finance Transaction, any information which the Person knows to contain false representations, or representations the falsity of which the Person has Recklessly disregarded, as to any material fact, or which Withholds or Conceals a material fact, concerning any of the following:
(1) The solicitation for sale of any Insurance Policy or purported Insurance Policy;
(2) An application for certificate of authority;
(3) The financial condition of any Insurer;
(4) The acquisition, formation, merger, affiliation or dissolution of any Insurer;
(c) Solicits or accepts new or renewal insurance risks by or for an Insurer which the Person knows was insolvent or the insolvency of which the Person Recklessly disregards.
It shall be unlawful for any Person to commit, or to attempt to commit, or aid, assist, abet or solicit another to commit, or to conspire to commit an Unlawful Insurance Act.
A Person who violates Section 2 of this Act is guilty of:
(a) A Class A misdemeanor if the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is less than _____;
(b) A Class B misdemeanor if:
(1) the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is _____ or more but less than _____; or
(2) the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is less than _____, and the defendant has been previously convicted of any class or degree of insurance fraud in any jurisdiction;
(c) A Class C misdemeanor if the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is _____ or more but less than _____;
(d) A felony in the third degree if:
(1) the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is _____ or more but less than _____; or
(2) the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is less than _____, and the defendant has been previously convicted two or more times of any class or degree of insurance fraud in any jurisdiction;
(e) A felony in the second degree if the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is _____ or more but less than _____
(f) A felony in the first degree if:
(1) the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is _____ or more but less than _____; or
(2) the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is less than _____ and the defendant has been previously convicted two or more times of any degree of felony insurance fraud in any jurisdiction; or
(3) the greater of (i) the value of property, services or other benefit he wrongfully obtained, or attempted to obtain, or (ii) the segregate or aggregate economic loss suffered by any Person or Persons as a result of his violation of Section 2, is less than _____ and his violation of Section 2 of this Act placed any Person at risk of death or serious bodily injury.
Drafting Note: It is the intent of the coalition that the criminal penalties for fraudulent insurance acts should track the existing criminal penalties for fraud.
A Person convicted of a violation of Section 2 of this Act shall be ordered to make monetary restitution for any financial loss or damages sustained by any other Person as a result of the violation. Financial loss or damage shall include, but is not necessarily limited to, loss of earnings, out-of-pocket and other expenses, paid deductible amounts under an Insurance Policy, Insurer claim payments, cost reasonably attributed to investigations and recovery efforts by owners, Insurers, Insurance Professionals, law enforcement and other public authorities, and cost of prosecution.
When restitution is ordered, the court shall determine its extent and methods. Restitution may be imposed in addition to a fine and, if ordered, any other penalty, but not in lieu thereof. The court shall determine whether restitution, if ordered, shall be paid in a single payment or installments and shall fix a period of time, not in excess of _______, within which payment of restitution is to be made in full.
Section 6. Administrative Penalties
(1) (A) Any Practitioner determined by the Court to have violated Section 2 shall be deemed to have committed an act involving moral turpitude that is inimical to the public well being. The court or prosecutor shall notify the appropriate licensing authority in this state of the judgment for appropriate disciplinary action, including revocation of any such professional license(s), and may notify appropriate licensing authorities in any other jurisdictions where the Practitioner is licensed. Any victim may notify the appropriate licensing authorities in this State and any other jurisdiction where the Practitioner is licensed, of the conviction.
(B) Upon notification of a conviction of the crimes enumerated in Section 2 of this Act or a substantially similar crime under the laws of another state or the United States, this State’s appropriate licensing authority shall hold an administrative hearing, or take other appropriate administrative action authorized by state law, to consider the imposition of the administrative sanctions as provided by law against the Practitioner. Where the Practitioner has been convicted of a felony violation of Section 2 of this Act or a substantially similar crime under the laws of another state or of the United States, this state’s appropriate licensing authority shall hold an administrative hearing, or take other appropriate administrative action authorized by state law, and shall summarily and permanently revoke the license. It is hereby recommended by the legislature that the
An error occurred while processing your request.
|
||||||||||