Insurance fraud costs Oklahomans $400 million dollars annually,
according to Insurance Commissioner John Crawford's office. That is
a lot of fraud, and the simple fact is it results in higher
premiums for everyone.
To combat this, Sen. Howard Hendrick, R-Bethany, introduced an
anti-insurance fraud bill early in the legislative session. It is
based on model acts of two national insurance groups.
Primarily, SB 4 is patterned after the model act of the National
Coalition Against Insurance Fraud. According to the commissioner's
office, however, it has been modified to suit Oklahoma's needs. The
legislation does not affect the workers compensation fraud unit in
the attorney general's office.
Crawford requested the bill, similar to one introduced in the
House in 1995 that ultimately died in the Senate. Partisan bickering
between Crawford, a Republican, and the Democratic controlled State
Senate prevented it from passing. Steps are being taken this year to
avert a similar gridlock. The result, however, may be a weakened
version of the bill.
Hendrick said last week he will step aside as primary author, and
turn the bill over to Sen. Brad Henry, D-Shawnee, in an effort to
help it along. With a Democrat as author, it likely will get a more
favorable hearing from the Senate Judiciary Committee where it was
assigned. That Committee, chaired by Henry, will consider it
Tuesday. The move also insures the Senate leadership more control
over the measure. The committee staff is working on a substitute for
the original that will be presented at the meeting. Some important
alterations affecting the reporting of incidents of fraud will be
As introduced, Section 6 of the bill mandates any person engaged
in the business of insurance, who has knowledge or a reasonable
belief of the occurrence of fraud, to provide the commissioner that
information within 60 days. The new language changes the word
"shall" to "may" allowing the person an option of reporting the
fraud. Coupled with changes in the next section of the bill, the
entire concept of requiring fraud reporting may be eliminated.
As introduced, Section 7 of the bill provides immunity from civil
liability for any person furnishing information concerning
anticipated or completed insurance fraud under certain conditions.
There is immunity if the information is provided to, or received
* The insurance commissioner or his employees, agents or
* Federal, state or local enforcement or regulatory officials.
* A person involved in the prevention and detection of insurance
* The National Association of Insurance Commissioners or its
agents, employees or representatives.
Immunity would not apply where statements were made with actual
malice, and in actions for libel, slander or other relevant tort,
prevailing party would be entitled to attorney's fees and costs. …