Bill Targets Insurance Shenanigans

TALLAHASSEE - Some Florida state leaders are backing tough new legislation that targets a range of insurance fraud schemes.

Florida Chief Financial Officer Tom Gallagher and two lawmakers are pushing legislation that would increase penalties for motorists who file trumped-up claims, auto insurers who sell bogus policies and companies that fail to buy required workers' compensation coverage.



Legislation proposed by Rep. Dean Cannon, R-Winter Park, and Sen. J.D. Alexander, R-Lake Wales, would impose a two-year minimum mandatory prison sentence for anyone who files a police report on a bogus auto accident to bilk insurers.



House Bill 967 also would require medical clinics to post the department's Fraud Buster hot line number and reward program, which offers $25,000 for the prosecution of anyone who files a bogus claim.



Florida law requires drivers to carry at least $10,000 in personal injury protection and the same amount in property damage coverage. The law was designed to protect accident victims by guaranteeing access to medical care and ensuring that hospitals get paid.



``Instead, fake medical clinics are springing up for the sole purpose of fraudulently billing insurance companies,'' Gallagher said.



State finance officials estimate that bogus auto insurance claims add $250 to every family's auto insurance policy each year.



``Insurance fraud has a direct financial impact on hardworking Floridians, and the legislation we are proposing would go a long way toward stopping these schemes,'' Cannon said at a news conference Monday.



The Department of Financial Services' fraud division has arrested more than 900 people said to be connected to more than $25 million in personal injury fraud in the past five years. More than 70 people face or are serving the minimum prison sentence.



The proposed legislation also guarantees the right to sue operators of bogus insurance operations who sell and collect premiums on policies they won't honor. In the past four years, finance department officials have taken action against more than 200 companies and agents who sold fake insurance resulting in more than $18 million in unpaid claims.



The bill also would toughen criminal charges against employers who do not provide state-mandated workers' compensation coverage. Employers without workers' compensation would face a first- degree felony if an employee is killed on the job. They would face a second-degree felony if someone is hospitalized from a workplace injury.



About 1,800 Florida employers were fined or charged last year for not providing insurance coverage on more than 13,000 workers, according to the state.