On February 17, the Washington State Office of the Insurance Commissioner reported that an insurance fraud modernization bill, Senate Bill 6031, passed the Washington state Senate that day by a unanimous 49–0 vote. It now moves to the House of Representatives for consideration before potentially becoming law.
In Washington state law, SB 6031 would define “insurance fraud” as its own crime, classified as a Class B felony. Unlawful conduct would include billing an insurance company or consumer for services not provided, impersonating others in insurance-related claims or transactions, and stealing insurance premium payments or premium financing loans.
The Office of the Insurance Commissioner’s Criminal Investigations Unit (CIU), created by statute in 2006, has not had its authorizing law updated since then. Commissioner Patty Kuderer said SB 6031 would give the CIU “modern tools to investigate modern fraud” and would shift the CIU’s focus from simple scams such as crashing a car and then buying a policy toward more complicated schemes that exploit loopholes to steal large amounts in smaller denominations to avoid prosecution.
The Washington state Insurance Commissioner’s bill would also expand the statutory definition of victims of insurance fraud to include insurance consumers and insurance beneficiaries, making them eligible for criminal restitution, and would broaden statutory reporting of suspected insurance fraud to the Insurance Commissioner by adding regulators of health care or financial services professions, and other law enforcement and public safety agencies, as required reporters. The Office of the Insurance Commissioner links these measures to the wider problem of insurance fraud, which it said costs insurance companies $300 billion a year and is passed along to consumers in the form of higher premiums.
