Legislators OK fraud-prevention bills

PROVIDENCE – State lawmakers recently passed legislation intended to prevent insurance fraud, including a requirement that insurers institute measures to detect and report fraudulent acts.
The legislation – H 7605A and S 2401A – adopts a model insurance fraud prevention act recommended by the National Association of Insurance Commissioners and already in place in 30 states. It also will require insurers to have fraud warnings on claims and applications.
The bills – sponsored by Rep. Brian Patrick Kennedy, D-Hopkinton, and Sen. Joshua Miller, D-Cranston – now go to Gov. Donald L. Carcieri for his signature.
A Statehouse press release on the measure said the Insurance Information Institute estimates that 10 percent of property and casualty insurance industry losses and loss adjustment expenses are due to fraud, which costs about $30 billion a year nationally.
Kennedy and Miller said requiring insurers to have an anti-fraud plan and to take enforcement action against its licensees will help protect the public from the consequences of fraud.
The R.I. Department of Business Regulation had earlier listed the legislation as a priority for this session.