Insurance industry and attorney general team up to fight fraud

Jennifer Coleman

Thursday, March 11, 1999 | 10:10 a.m.

CARSON CITY, Nev. - Attorney General Frankie Sue Del Papa and the insurance industry want to join forces to fight insurance fraud, from scheming doctors and lawyers to car owners who pad claims for fender benders.

Two bills approved by a Senate panel Thursday are intended to stamp out fraud that bilks insurance companies and Nevada consumers out of thousands of dollars a year.

SB224 and SB225 would allow the attorney general's office to prosecute insurance fraud, financing the fraud unit by charging insurance companies a yearly fee.

Insurance officials told lawmakers they wouldn't mind the fee, based on a sliding scale ranging from $500 to $2,000.

"We feel it's an investment," said Bob Feldman of Auto Insurance America. "My assessment increases by $500 a year, which is about 5 cents a car."

Feldman estimated the average family could save over $130 a year on auto insurance by reducing the amount insurers pay in fraudulent claims.

Most insurance fraud is "soft" fraud, such as exaggerating or padding claims, Feldman said.

But it still must be prosecuted, said Howard Goldblatt of the Coalition Against Insurance Fraud, an alliance of insurance companies and consumer groups working to reduce fraud.

"We also want to go after the mom and pop cases. That case will hit the press and people will see a friend or a neighbor has been charged and will think twice about padding their claims," Goldblatt said.

Staged accidents in Las Vegas are turning into a "cottage industry" due to surrounding states' stricter laws against insurance fraud, Goldblatt said.

But consumers aren't the only ones ripping off insurers, he said.

Unscrupulous doctors, lawyers and labs who bill for services not received will also be targeted by the attorney general's fraud unit.

"We've seen reimbursement for driving services where the person running the car service would have to have been driving 24 hours a day, 7 days a week, for several years. The bill added up to thousands, if not millions of dollars," Goldblatt said.

Fraudulent medical claims often go undetected because consumers don't check their bills when they are covered by insurance companies, he said.

The bills were both amended and passed unanimously Thursday by the Senate Commerce and Labor Committee. They now go to the full Senate for consideration.