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INSURERS INCREASE EFFORTS TO FIGHT INSURANCE FRAUD

 INSURERS INCREASE EFFORTS TO FIGHT INSURANCE FRAUD
 OAK BROOK, Ill., Oct. 19 /PRNewswire/ -- Insurers are increasing


their efforts to fight fake claims and other forms of insurance fraud, according to a new Insurance Research Council survey of property- casualty insurers.
 Insurers representing about two-thirds of the property-casualty insurance market now have Special Investigative Units (SIUs), up from about 50 percent in 1983. These SIUs investigate suspicious claims and train claims people to identify claims that should be given a closer look. The survey showed that many companies without formal SIUs carry out fraud investigations in other ways. Insurance fraud can take many forms and insurers are tackling the problems using many different methods.
 The Council estimates that property-casualty insurers as a group spend well over $200 million per year for fraud deterrence.
 "Fraud control is embedded in many aspects of an insurance company's operation," said Elizabeth Sprinkel, the Council's assistant director. Insurers cite fraud training of personnel, SIU investigations, support of claim management, public awareness, media attention and centralized index databases as the major factors contributing to their success in fraud detection and deterrence.
 "No one really knows how much fraud and exaggeration cost insurers and the insuring public, but nearly everyone agrees it is significant and that we need to make greater efforts to reduce the burden," said Sprinkel.
 When asked what further steps could be taken to improve fraud detection and deterrence, insurers suggested increased training of claims personnel, consolidated claim index systems, tougher criminal penalties and prosecution, and tougher civil fraud penalties.
 Insurers are looking beyond their own companies in their fight against fraud. Industry support organizations, such as the National Insurance Crime Bureau and index bureaus, assist insurers in their fight against fraud.
 The report also documents the growing presence of state fraud bureaus. Thirteen states currently have legislated fraud bureaus, five of which were established since 1990. Four more states have started other fraud-related programs, and several others are considering establishing antifraud programs.
 Copies of the report, Fighting Fraud in the Insurance Industry, are available from the Council at 1200 Harger Road, Suite 310, Oak Brook, Ill., 60521; Phone:708/572-1177. The cost is $5 per copy in the U.S., $10 elsewhere.
 -0- 10/19/92
 /CONTACT: Donald W. Segraves or Elizabeth A. Sprinkel, 708-572-1177, for the Insurance Research Council/ CO: Insurance Research Council ST: Illinois IN: INS SU:


LD -- NYFNS3 -- 1300 10/19/92 07:31 EDT
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Date:Oct 19, 1992
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