Driven by an annual fraud loss of $30 billion, the nation's property and casualty insurance companies are taking aggressive action based on a two-year, industry-wide review of their fraud fighting efforts, the National Insurance Crime Bureau said.
The NICB said that while individual insurance carriers continue to refine and expand their aggressive anti-fraud processes into their claim-handling procedures, today's more sophisticated criminals continue to mutate their approaches. Fraudsters will simultaneously target numerous companies with multiple fraudulent claims generating millions of dollars in bogus payments. This kind of criminal enterprise, the NICB says, requires more than an individual company is able to withstand.
With that in mind, various committees were created by the NICB and staffed with industry professionals who were charged with identifying weak spots in existing fraud-fighting efforts. These groups recently completed their work and found that the industry's approach to fraud was fragmented and inadequate. While there are isolated examples of effective anti-fraud programs, the NICB says that a nationwide, coordinated effort on multiple fronts is necessary to reduce the crime.
They have identified five “pillars” as being critical components to an effective fraud-fighting structure. They are:
- Public Awareness
- Legislative Advocacy
- Training
- Data Analysis
- Investigations
The NICB board of governors has been tasked to develop an Integrated Business Plan (IBP) for a new fraud fighting organization incorporating these five pillars. Overseeing the effort is an executive steering committee staffed by Mark C. Russell, vice president and chief administrative officer, Grange Insurance; Susan Q. Hood, claims vice president, State Farm Mutual Automobile Insurance Company; William J. Breslin, senior vice president, claims service, USAA; Robert M. Bryant, president and chief executive officer, NICB; and Dennis Jay, executive director, Coalition Against Insurance Fraud.
The five committees representing each of the pillars will be staffed with professional law enforcement officers, state insurance regulators, prosecutors, insurance executives, researchers, legal experts and consumer advocates. They will examine the current practices within each of the five areas looking for successful operations, as well as missing elements and/or weaknesses. This will be followed by a process of incorporating best practices into each committee's deliberations and, finally, producing a report of findings and recommendations, the NICB said.
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