Preventing Insurance Fraud

Legislation was introduced this session aimed at addressing insurance fraud issues in the state. Currently, Minnesota has one of the highest rates of insurance fraud in the country, costing the average family more than $1,400 a year in higher insurance premiums, and higher costs of goods and services purchased from businesses that also suffer from fraud.

The legislation has three components. Current law allows for the immediate release of accident report information to third parties. This legislation would still allow the information to be available to the public, but providers would not be able to contact accident victims until 30 days had passed from the time of the accident. Furthermore, this legislation prevents insurers from settling a claim within 30 days unless they give the insured person written disclosure that they are eligible for legal counsel.

The second provision enables the Commerce Department to bring civil penalty charges against fraudulent actors. Lastly, the bill gives the Commissioner of Commerce or another relevant licensing body the authority to remove a person’s authorization to receive insurance payments if they are found to have committed fraud. An amendment was adopted to clarify that five years after the date of conviction, the charged individual could apply to the court to remove this penalty.

Several other states have enacted similar provisions to help curb fraud, and proponents maintain that this legislation is an important step in anti-fraud work here in Minnesota. The legislation has the support of the National Insurance Crime Bureau, the Coalition against Insurance Fraud, All State and American Family Insurance, and the Ramsey County Attorney’s Office.

STATUS: The bill is in the Judiciary Committee. (S.F. 782)

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