New York State Insurance Frauds Bureau's 2008 Annual Report

Recently posted to the New York State Insurance Department's website is the 2008 Annual Report of the New York State Insurance Frauds Bureau.

 The report cites the following 2008 highlights:

• Investigations conducted by the Frauds Bureau resulted in 755 arrests in 2008, the highest number recorded since 2004.
  

• The number of criminal convictions obtained by prosecutors in Frauds Bureau cases totaled 402 during 2008.
  

• The Bureau’s Major Case Unit handled complex cases involving no-fault, commercial rate evasion, health care fraud and workers’ compensation premium fraud. The Unit effected 126 arrests in 2008.
  

• New York State received more than $9 million in refunds and $78,551 in fines from five health care providers who inappropriately billed United HealthCare, administrator of the Empire Plan.

• Arrests for auto give-ups spiked by 35% over the past year, up from 96 in 2007 to 130 in 2008. Fraud experts believe that high lease payments and the downturn in the economy may be factors.

• No-fault fraud referrals increased by 10% from 2007 to 2008.  At the same time, the Bureau posted 154 no-fault arrests, a 52% year-to-year increase.

• A 19-month investigation led to the indictment of 62 individuals accused of staging more than 40 auto accidents over a three-year period. The investigation was conducted by the Frauds Bureau and other members of the FBI New York Health Care Fraud Task Force.

Compiled data from the report include:

IFB Reports Received

IFBs Received	2004	2005	2006	2007	2008
Auto Unit Totals^	19,580	17,124	14,344	15,813	4,406
Workers Comp Unit Totals	1,027	1,118	1,034	1,472	1,428
Medical/No-Fault Unit Totals^^	2,301	2,279	1,624	1,457	14,142
Arson Unit Totals	565	499	491	605	654
General Unit Totals	2,209	2,553	2,545	2,732	2,424
Unassigned	1,597	2,372	2,846	0	0
Grand Total	27,279	25,945	22,884	22,079	23,054

^  Data prior to 2008 reflects Auto and No-Fault Unit totals.
^^  Data prior to 2008 reflects Medical Unit total only.

IFB Investigations Opened

Investigations	2004	2005	2006	2007	2008
Auto Unit Totals^	200	268	349	479	323
Workers Comp Unit Totals	669	624	440	219	445
Medical/No-Fault Unit	71	71	78	77	262
Totals^^
Arson Unit Totals	133	93	84	87	118
General Unit Totals	108	123	150	210	219
Total	1,181	1,179	1,101	1,072	1,367

The report also sets forth the following "Directions for 2009": 

A.  Auto Give-Ups/Auto Arson

Arrests in cases involving auto give-ups spiked by 35% over the past year in New York State, up from 96 in 2007 to 130 in 2008. Fraud experts believe that the downturn in the economy may be a factor in the uptick, as owners abandon their cars or in many cases arrange to have them burned and then report them stolen in an effort to collect the insurance payout. As the economy worsens, car owners can see give-ups as a means to avoid steep car payments or alleviate general debt. The Frauds Bureau will carefully monitor the auto insurance market during the coming year to keep abreast of fraud trends.

B. Special Investigations Unit Examinations

The Frauds Bureau’s examiner staff performed a targeted audit of the SIU of a large auto insurer in 2008 and a Report on Examination will be issued in 2009. The Bureau will continue its examination of SIUs in the coming year. Insurers are selected for targeted examinations from those that have filed a Fraud Prevention Plan with the Department and have a history of complaints and/or concerns pertaining to their SIU operations and Fraud Plans.

The Frauds Bureau also supports and assists the Life, Health and Property Bureaus with market conduct examinations as requested by those Bureaus. The Frauds Bureau will continue to assist the regulatory bureaus with examinations in 2009.