Insurance fraud in U.S. a $30-billion problem: Deloitte

Property and casualty insurers need to adopt a multi-pronged approach to combat a growing fraud problem in the United States, notes a recent report from Deloitte. The report, A Call to Action: Identifying Strategies to Win the War Against Insurance Claims Fraud, says auto insurance and workers’ compensation are the two biggest sources of an estimated $30 million in insurance fraud. Deloitte also states the National Insurance Crime Bureau (NICB) reported that in 2011 questionable claims for the first time had exceeded 100,000 referrals and had increased by 19% compared to 2009, and specific categories saw even larger increases, such as casualty and miscellaneous claim types. To deal with claims fraud, Deloitte recommends insurers to create an integrated fraud management strategy that rests upon four pillars. Its four pillars of an integrated fraud management program include: •developing a fraud management strategy; •aligning the operating model; •improving information quality; and •leveraging advanced technology tools and analytics. “While many insurers have invested resources in an effort to improve fraud management, few have taken a broad or integrated approach,” Deloitte observes in the report. “Some companies have invested in improving data quality and adopting technology tools, but still lack the business processes, workforce competencies and organizational structure needed to act on the insights gained from data analysis.”

York Regional Police lay 142 charges in alleged auto fraud scheme called "Project Sideswipe"

Forty-six suspects have been charged in connection with an alleged auto fraud scheme called Project Sideswipe involving staged collisions and suspected false medical billings in Ontario. One hundred and forty-two charges have been laid to date, including conspiracy to commit an indictable offence, fraud under $5,000, fraud over $5,000 and obstruction of a police officer, notes a statement from the York Regional Police (YRP). Project Sideswipe involved nine alleged staged collisions that occurred in York Region, as well as suspected associated false medical billings from several medical rehab and assessment centres in Brampton, Toronto and Mississauga, notes a statement from the Insurance Bureau of Canada (IBC). The allegations have not been proven in court. Police believe a ring of recruited drivers and passengers staged collisions to support accident benefit insurance claims. Medical rehab and assessment centres would then use the names, signatures and college registration numbers of medical practitioners, without their proper authorization, and invoice insurance companies for services that were not rendered, the IBC reports. Rick Dubin, vice president of investigation services for the IBC, characterized the efforts as yet, "another step at driving a wedge into one of the alleged sophisticated fraud networks, operating throughout the Greater Toronto Area.” “The potential loss to nine insurers is still being calculated, but it is estimated to be somewhere in the neighbourhood of $5 million,” Dubin notes in the statement. “Insurance premiums are driven by claims costs and right now costs have been driven through the roof in Ontario as a result of fraud and abuse in the system.” Results from a KPMG study estimate the annual cost of auto insurance fraud in Ontario to be in the range of between $770 million and $1.6 billion per year.

FSCO rejects insurer's motion to obtain academic course records of injured woman's daughter/caregiver

A Financial Services Commission of Ontario (FSCO) arbitrator has rejected the motion of an insurer to obtain a copy of the academic course record of the daughter of a woman injured in an auto accident. The insurer in the matter, Security National, argued the course schedule of the daughter, who attended the University of Toronto between 2008 and 2010, was necessary to confirm whether or not the daughter was a full-time or part-time student. This information would then shed light on whether or not the daughter provided housekeeping and caregiving services to her mother as claimed. Mary Anothonipillai was injured in an auto accident on Apr. 21, 2008 and applied for statutory accident benefits. Security National disputed the amount she claimed for housekeeping and caregiving expenses, contending the costs were too high. Security National attempted through correspondence with Anthonipillai’s daughter, Sharel George, to establish George’s status as a student, so it could assess the amount of time she may have taken away from school to provide care for her mother A Financial Services Commission of Ontario (FSCO) arbitrator has rejected the motion of an insurer to obtain a copy of the academic course record of the daughter of a woman injured in an auto accident. The insurer in the matter, Security National, argued the course schedule of the daughter, who attended the University of Toronto between 2008 and 2010, was necessary to confirm whether or not the daughter was a full-time or part-time student. This information would then shed light on whether or not the daughter provided housekeeping and caregiving services to her mother as claimed. Mary Anothonipillai was injured in an auto accident on Apr. 21, 2008 and applied for statutory accident benefits. Security National disputed the amount she claimed for housekeeping and caregiving expenses, contending the costs were too high. Security National attempted through correspondence with Anthonipillai’s daughter, Sharel George, to establish George’s status as a student, so it could assess the amount of time she may have taken away from school to provide care for her mother. George did not supply the information to Security National, which then brought a motion asking FSCO to compel George to provide her academic course schedule during the period at issue (between 2008 and 2010). FSCO did not allow the motion, questioning the relevance and the probative value of the documents. “I am not persuaded that the records are so relevant that their non-disclosure now would prejudice a just and fair hearing so that I should therefore set aside privacy concerns around documents that contain information personal to a third party [George] but none about a party to this proceeding [Anthonipillai],” FSCO arbitrator Jessica Kowalski wrote in her decision. “Nor am I persuaded that the academic schedule is as probative as Security National asserts. That schedule will not disclose how often, or even whether, Ms. George attended her classes.”