Florida leads the country with 458 criminal convictions and 771 cases referred for prosecution, in 2002. New York was second with 389 convictions and New Jersey third with 302.

New Jersey's attorney general, Peter C. Harvey, told National Underwriter that when the civil and criminal actions are combined the state is number one in enforcement nationally.

He noted that the increase in enforcement stems from the reorganization of the Insurance Fraud Prosecutor's office to become a more effective investigative and prosecutorial tool as well as cooperation from insurance companies.

He said carriers were asked and responded to the attorney general's office's request for summaries of the evidence companies had collected, including the type of scheme, amount of money involved and the parities involved. Where the state could not prove a case of explicit fraud, it has pursued civil actions that might involve such acts as overbilling and overcharging of carriers.

"I think we are making inroads now [into insurance fraud]," observed Mr. Harvey. "I think there will come a point where we will expose enough fraud where it will really result in rate stabilization. That is our goal."

He added that, "We may not get our consumers a rate discount, but what we might be able to do is stop rates from increasing as quickly as they might without this aggressive enforcement.

The reason for that, he continued, is that "when people engage in fraud they are taking money out of the system. If they take enough money out of the system it has to be made up some way, and that way is [premium] rate increases."

In a statement, Tom Gallagher, the chief financial officer for the state of Florida, whose department heads up the state's insurance department, said the department accomplished the feat with a staff and budget two-thirds smaller than that of some other states.

New Jersey leads with the number of open investigations, 4,986, in 2002 compared to Florida, ranked third, with 2,019. California is second with 2,237.

The Coalition said, overall, fraud convictions have increased by one-third from 2001 to 2002; this is despite budget restraints.

Many fraud bureaus saw their budgets flatten or drop in 2003, according to the study. The average budget fell slightly over the last two years. Nine of 10 fraud bureaus said lack of resources is their biggest challenge, the Coalition said. Overall staffing declined for the first time in seven years?down to 1,331 in 2002 compared to 1,377 in 2001.

Earlier this month, in a fraud crackdown, the Louisiana Insurance Fraud Task Force said two employees in the state's Department of Insurance licensing division were arrested for allegedly selling insurance licenses to unqualified agents.

The state's fraud task force, working with law enforcement officials in Louisiana and the Arkansas Department of Insurance, accused nine individuals of illegally purchasing licenses to sell insurance in Louisiana. Another eight legally licensed agents were arrested for allegedly participating in a scheme to obtain licenses and continuing education credits illegally.

In 2002, according to the Coalition's report, Louisiana had 112 open investigations and 31 criminal convictions. Its fraud bureau budget ranked number eight at $1.8 million, compared to New Jersey's $30 million budget, ranking it number two, and Florida's budget of $11.2 million, ranking it third. California was on top at more than $34 million. Criminal conviction numbers were not available for the state.