fraud rings. If the public were fully aware
of how much of their hard-earned money is spent on illegitimate claims, there
would be outrage. These expenses go well
beyond just premiums, as there is an embedded tax on goods and services as a result of rising costs associated with fraud
against merchants. This doesn’t even include the hidden litigation tax that consumers are hit with to pay for the cost of
In most jurisdictions, insurance fraud
is a crime prosecuted by the state. In
some states it is classified as a felony, in
others a misdemeanor. There are some
circumstances when it can rise to a federal crime under federal mail or wire
transfer statutes. A good first step would
be to increase the severity of insurance
fraud to a felony across the board and
then provide significant fines, penalties
and forfeiture laws.
Given the interstate dealings of many
insurers, increased use of the internet,
and the transfer of funds, perhaps more
cases should be pushed to the federal
court system with investigating agencies such as the Department of Justice,
Treasury Department, Federal Bureau
of Investigation and U.S. Immigration
and Customs Enforcement given wider
latitude in investigating and prosecuting
With insurance fraud on the rise, it is
essential that more focus be put on this
epidemic. It will take a collective effort
between the insurance industry, consumer groups, elected officials and federal,
state and local law enforcement to effectively bring about meaningful change.
While some states have taken initial steps
to stem this problem, far more needs to
be done. The time is now to work together to bring about meaningful tort and legal reforms.
Christopher Tidball is a claims consultant
and author of multiple books including
Swoop & Squat and Re-Adjusted:
20 Essential Rules to Take Your
Claims Organization From Ordinary to
Extraordinary. His career has spanned
more than 25 years in adjusting,
management and executive roles for
multiple top ten P&C carriers. To learn
more, please visit www.christidball.com
form a significant amount of medically
unnecessary procedures, up to and including surgery. The insurance carrier is
then billed for substantial medicals, and
oftentimes accepts the bills as incurred
when settling personal injury claims.
Given the propensity of hard and soft
fraud, and the challenges in prosecuting
such claims, what is an insurer to do? A
good first step would be for the industry
to collectively demand that lawmakers
take critical steps to reign in fraud. There
need to be serious penalties for commit-
ting insurance fraud, and law enforce-
ment and insurers need to be given the
teeth to take a bite out of this crime.
There should also be an educational
outreach to the public, who are generally
unaware of the vast network of criminal
syndicates behind organized insurance
STATEMENT OF OWNERSHIP,
MANAGEMENT AND CIRCULATION
(Required by 39 U.S.C. 3685)
1. PUBLICATION TITLE: Claims.
2. PUBLICATION NO. 0895-7991
3. DATE OF FILING: September 28, 2015
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14. Issue Date for Circulation Data Below: September 2015.
15. EX TENT AND NATURE OF CIRCULATION:
Average No. Copies Each Issue No. Copies of Single Issue Published
During Preceding 12 Months Nearest To Filing Date
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4. Rate Distribution Outside the Mail 1,255 1,294
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F. Total Distribution (Sum of C and E) 13,608 13,599
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I. Percent Paid and/or Requested Circulation
(C divided by G times 100) 90.78% 90.48%
17. PUBLICATION OF STATEMENT OF OWNERSHIP: Publication Required. Will be printed in the November 2015 issue
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Sheila Hyland, Business Director