House representatives in Indiana recently voted 95 to one in approval of HR 1403, a bill strengthening the penalties for insurance fraud committed in the state. The state's Senate will now open debate on the legislation.
Beefing up a previously weak law will allow the state to begin seriously combating one of its most neglected crimes, according to the Coalition Against Insurance Fraud. “Indiana has one of nation's softest fraud laws, and rarely even prosecutes insurance scams,” said Howard Goldblatt, the coalition's director of government affairs. “Finally imposing serious penalties will give prosecutors an effective tool to clamp down on swindles in the state.”
The legislation would increase jail terms for larger insurance fraud schemes, imposing sentences of up to eight years in jail. The current law allows only one year, no matter how large and damaging the fraud. Fines also would increase significantly.
“Stiffer penalties will give prosecutors far more incentive to try these often-complex crimes,” Goldblatt said. “Prosecutors often turn down insurance fraud cases in Indiana because the weak penalties are rarely worth the large effort required to get a conviction.” Stronger penalties also should prove as a deterrent to many would-be scam artists who are not intimidated by Indiana's toothless fraud law, he added.
Premium fraud, such as selling fake health insurance or agent theft of client premiums, also would become a specific crime, encouraging more state prosecutions. The present law covers only false claims.
“Prosecutors greatly increase their chances of earning a conviction for premium scams with a law that's enlarged specifically to include this crime,” Goldblatt said.
The bill has broad support in the state, and was initiated by the Indiana chapter of the International Association of Special Investigation Units.
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