Fraud Bill Weakened?
Pitts, William O., THE JOURNAL RECORD
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 insurance 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 made. 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 suspected, anticipated or completed insurance fraud under certain conditions. There is immunity if the information is provided to, or received from: * The insurance commissioner or his employees, agents or representatives. * Federal, state or local enforcement or regulatory officials. * A person involved in the prevention and detection of insurance fraud. * 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, the prevailing party would be entitled to attorney's fees and costs. …