NAIC Starts Campaign To Combat Fake Insurance
NU Online News Service, March 17, 11:14 a.m. EST?The National Association of Insurance Commissioners announced it is rolling out a public-awareness campaign to combat fraudulent insurance sales and teach consumers how to identify unauthorized insurance activities.[@@]
"Fraud is an enormous problem in all lines of insurance, and we are very pleased that the NAIC is launching this campaign," commented Nevada Insurance Commissioner Alice Molasky-Arman during the NAIC spring meeting that ended yesterday in New York.
NAIC said its campaign will focus on public education about the sale of unauthorized insurance policies in all lines and will encourage consumers to call their state insurance department if they suspect illegal activity or if they have questions before purchasing an insurance policy.
Ms. Molasky-Arman said that a centralized campaign that encourages consumers to contact their state insurance departments is extremely important. "It also will aid regulators in locating and taking action against these elusive, bogus insurance entities, with consumer input," she said.
NAIC observed that fraudulent insurance plans are becoming more commonplace in every line of insurance and have cost consumers billions of dollars in unpaid claims.
One reason many consumers fall prey to fraudulent, unauthorized insurance sales is that they are looking for affordable solutions for their families and their employees that address these costs?fake insurance sales often involve rates much lower than those of licensed policies, NAIC said.
In most cases, the reason for these bargain rates is that the policies do not provide sufficient benefits, if any, NAIC cautioned.
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