Originally published March 14 2005
Florida insurance fraud crackdown fails to lower rates
by Mike Adams, the Health Ranger, NaturalNews Editor
Florida lawmakers increased punishments for making insurance claims for fraudulent medical services in 2001, but the move has failed to curb auto insurance rates. The law has increased investigations and arrests for fraud. Legislators say that a radical revision to the insurance code may be needed in order to curb the incidence of fraud, which is estimated cost Florida motorists $1 billion annually.
The action followed a statewide grand jury report and a December 2000 South-Florida Sun-Sentinel series that identified dozens of unlicensed clinics linked to auto insurance fraud schemes, including ones in Broward, Miami-Dade and Palm Beach counties that paid people hundreds of dollars each to recruit traffic accident patients.
The tougher sanctions led to an increase in fraud investigations and arrests, but have not reduced car insurance premiums significantly, according to findings by Florida's insurance regulators.
The reforms include rigid clinic licensure requirements and revamped laws against soliciting for crash victims and staging accidents.
But state officials and some legislators think more changes are needed and more investigators should be hired.
Changes that legislators are expected to begin deliberating in the 2005 legislative session that starts Tuesday include proposals to end the state's so-called "no-fault" auto insurance system.
Under no-fault laws, insurers must pay up to $10,000 in medical benefits for anyone injured in a crash regardless of who is at fault, and in exchange, crash victims give up some of their rights to sue for damages.
Because legislators have put other insurance issues, such as post-hurricane reforms to the three-year-old Citizens Property Insurance Corp., the state-backed home insurer, high on their 2005 legislative agenda, leading legislators and industry officials say dramatic changes to auto insurance laws likely will wait until next year.
The new state report that's triggering some of the Legislature's interest in auto insurance reforms finds that only weeks after anti-fraud laws went into effect in 2001, state investigators shut down a large Internet-based fraud ring that was marketing fraudulent insurance cards.
Steve Geller, a Hallandale Beach Democrat who has written numerous insurance bills.
"But bringing on significantly more investigators means a greater expenditure of government funds.
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