The National Insurance Crime Bureau (“NICB”) has released an analysis that examines the impact that organized crime groups have on insurance fraud. Covering the period from January 1, 2008, through June 30, 2012, analysts reviewed 13,014 questionable insurance claims (“QCs”).
The insurance policy type most represented in the analysis was “personal automobile,” accounting for 10,659 referrals. The NICB said that this suggested a rather strong correlation between the kinds of alleged fraud schemes most perpetrated by “organized group/ring activity” (“OGA”): staged and caused accidents. Moreover, according to the NICB, this was further evident when looking at these QCs by loss type.
The referral reason most often coupled with the OGA referral was by far “staged/caused accident.” It was indicated 4,347 times. The loss type with the most referrals was bodily injury with 4,401 referrals.
The results of this QC analysis correlated with what NICB agents and analysts are seeing in their cases—particularly in the no-fault, personal injury protection (“PIP”) states like Florida, Michigan and New York, according to the NICB.
The top five states that generated the most were: Florida (3,530), California (2,679), Michigan (1,080), Texas (1,050) and New York (765). The top five cities generating the most were: Los Angeles (752), New York (595), Miami (575), Detroit (545) and Tampa (545).
QCs are claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain up to seven referral reasons. For this report, just QCs with a referral reason of OGA were identified.
The NICB defines organized crime groups as “any specific group made up of entities and/or individuals who systematically and repeatedly conduct pre-planned activities for the purpose of generating fraudulent insurance schemes.”
Read more: here and www.nicb.org.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].