Insurers in New York are scratching their heads at the upsurge in fraudulent claims. According to the recently released New York State Insurance Department's Frauds Bureau Annual Report for 2009, the state has seen a 24% increase in insurance fraud-related convictions.
Convictions include the owner of a Westchester County pizzeria, a Monticello insurance underwriter, a Monroe County podiatrist and an Erie County woman who bought insurance to fix a car that had already been wrecked, notes the report.
Insurance Superintendent James Wrynn admits that insurance fraud is on the upswing. “Fighting this crime is among the Insurance Department's highest priorities,” he said. “The Department is committed to working closely with local authorities to investigate and prosecute these cases. Insurance fraud is serious because it unnecessarily drives up the cost of insurance for honest New Yorkers.”
The annual report notes sharp increases in virtually all of the areas under the Bureau's responsibility. For example:
• A total of 499 people were convicted of insurance fraud or related crimes as a result of Bureau investigations in 2009, a 24% increase from the previous year. There were 738 arrests, slightly fewer than the 755 arrests in 2008.
• The Bureau received 24,920 reports of suspected fraud, an increase of more than 8%
• A total of 1,707 new cases were opened for investigation, up nearly 25%
• There were 184 arrests for workers' compensation fraud, up 16 %
• The Bureau's General Unit recorded 110 arrests in 2009, up from 69 the previous year.
The Bureau investigates a range of insurance-related crimes. These include complex investigations, such as those involving the Monticello underwriter, who was convicted of stealing $22.5 million in premiums, or the Monroe County podiatrist convicted of submitting $750,000 in fraudulent medical billings for treatments he never provided to nursing home patients.
Other cases involve those such as the pizza parlor owner who was assessed a $97,000 fine after failing to provide workers' compensation coverage for his employees, or the Erie County case, where a woman tried to buy insurance to cover car damages that had already occurred.
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