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CONSUMERS, INSURERS AND GOVERNMENT AGENCIES LAUNCH NEW CAMPAIGN TO FIGHT INSURANCE FRAUD; AUTO INSURANCE FRAUD STUDY RELEASED

 WASHINGTON, June 3 /PRNewswire/ -- Because insurance fraud is a primary cause driving higher insurance rates, consumer groups, government agencies and insurance companies are launching a new campaign to combat the growing incidence and cost of insurance fraud.
 The campaign will be led by a new organization, the Coalition Against Insurance Fraud, which will aggressively promote initiatives to help prevent and detect insurance fraud by insurers, policyholders and others seeking to rip off the insurance system.
 "The most conservative estimates of insurance fraud suggest that it costs the country tens of billions of dollars each year," said Stephen Brobeck, executive director of the Consumer Federation of America and co-chair of the new coalition. "By reducing this fraud even modestly, consumers can achieve significant premium savings."
 "The increasing levels of fraud are weakening the integrity of the insurance system in this country," said Adrian Tocklin, executive vice president of Continental Insurance who also serves as co-chair of the coalition. "Unless the rate of insurance fraud is curbed, consumers will face skyrocketing insurance costs and insurance company failures may become commonplace."
 The first initiative of the coalition is the release of a study on the costs of auto insurance fraud and potential solutions to it. According to the study's findings:
 -- Auto insurance fraud is increasing and now costs at least $8 billion annually.
 -- Anti-fraud programs potentially can reduce auto insurance fraud by about $2 billion annually.
 -- Key elements of effective anti-fraud programs include inspecting automobiles before insurance is issued, creating special investigative units, installing fraud hotlines and developing consumer education programs.
 On the federal level, the coalition will push for passage of a federal proposal to punish insurers that defraud consumers or provide false information to insurance regulators.
 "We need better policing and stricter penalties for insurers who violate the confidence of consumers," Tocklin said. "There are far too many fly-by-night, poorly capitalized insurers that are feeding off the good faith of honest citizens."
 The coalition not only will aggressively advocate new federal and state anti-fraud legislation and regulation, but also will inform the public about the societal costs of insurance fraud and try to change public attitudes that are "all too tolerant of this crime," according to Tocklin. She cited research where nearly a third of respondents said it was acceptable to lie when applying for insurance in order to reduce premiums. Another 14 percent said it was acceptable to pad insurance claims, she said.
 The coalition represents a partnership of 17 consumer groups, government agencies and insurance organizations. In addition to CFA, coalition members include the National Association of Insurance Commissioners, the National District Attorneys Association, the National Association of Consumer Agency Administrators, Consumer Fraud Watch, the International Association of Insurance Fraud Agencies, Office of Attorney General in Minnesota, National Urban League, the National Insurance Crime Bureau, and the American Insurance Association.
 Insurance company members are: Aetna Life & Casualty, The Continental Corporation, Fireman's Fund, ITT Hartford Insurance, Nationwide Insurance, State Farm Insurance Companies, and The Travelers Insurance Companies.
 The coalition appointed Dennis Jay to serve as executive director. Jay, formerly vice president of communications for the National Association of Professional Insurance Agents, has extensive experience in developing consumer/industry initiatives. Other staff will be appointed later this summer to implement the coalition's communications and legislative strategies, according to Jay.
 -0- 6/3/93
 /NOTE: A full press kit containing the auto insurance fraud study and a report detailing the scope of insurance fraud in the United States can be obtained by calling 202-828-7105./
 /CONTACT: Dennis Jay, 202-828-7105, or Jack Gillis, 202-737-0766, both for the Coalition Against Insurance Fraud/


CO: Coalition Against Insurance Fraud ST: District of Columbia IN: INS AUT SU:

DC-TW -- DC018 -- 4953 06/03/93 11:47 EDT
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Publication:PR Newswire
Date:Jun 3, 1993
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