New York State
Insurance Department

DEPARTMENT’S YEAR-END FRAUDS STATISTICS SHOW
CRIMINAL CONVICTIONS ALMOST DOUBLED IN 1999

        Superintendent of Insurance Neil D. Levin today announced that the number of criminal convictions in insurance fraud cases almost doubled in 1999 – jumping from 101 in 1998 to 194 in 1999.

        "The Department’s efforts to protect New York State consumers from insurance fraud are working," Levin said. "The partnership between the Department and insurance companies have made the fraud fighting efforts more efficient and effective. We are committed to continuing this trend to eliminate insurance fraud in the coming year."

        The Department's Annual Frauds Report shows that in 1999 there were a record 390 arrests for insurance fraud, this is a 41% increase over 1997 and a 240% increase since 1994. Also, in 1999 the Bureau approved fraud prevention plans for 420 insurers. The insurer prevention plans were in response to the Department’s directive in 1998 requiring all insurers in the state that write a minimum number of specified policies to file a fraud prevention plan with the Department.

        Other 1999 fraud fighting accomplishments include:

• The Bureau expanded its program to increase communication and interchange with staff of insurer Special Investigation Units. Frauds Bureau staff met with about 300 representatives from more than 100 insurance companies during 1999.

• The number of suspected insurance fraud cases the Department received in 1999 dropped to 19,196 from a 21,170 in 1998 and a peak of 23,113 in 1997. The decrease in suspected insurance fraud cases is due to our aggressive fraud fighting efforts coupled with the decrease in crime statewide.

• Currently about 25% of all fraud reports are electronic. The pilot electronic fraud reporting system launched in 1998 allowing insurance companies to file fraud reports on-line has been a success. This will make it easier to track and review fraud case submissions.

        The report outlines the Department's fraud fighting plans for the upcoming year, such as expanding undercover operations and focusing on No-Fault auto insurance fraud. The Department will also be supporting legislation to increase criminal and civil penalties for those who commit insurance fraud.

        A copy of the Insurance Frauds Bureau's report is available on the Department's Web site www.ins.state.ny.us or by calling 1-800-342-3736 to request a copy.