The Maryland Insurance Administration has been receiving almost twice the normal number of complaints involving fraud for this year compared to 2008. This may be attributed to the ongoing recession and an increasing popularity of the use of technology.
According to Carolyn Henneman, Fraud Division Head of the Maryland Insurance Administration, their division has recorded around 1,400 reports for the fiscal year 2008. For fiscal year 2009, ending on June 30, more or less 2,600 insurance fraud reports have been received – almost double the previous number.
Current statistics regarding fraud complaints is not an exact value, according to an administration spokesperson. This was due to the fact that as of the time this report was given; exact values were still being computed.
Attendees of the Insurance Roundtable of Baltimore annual seminar were informed by Henneman that the MIA has only been receiving around 1,300 fraud reports per year. A sudden increase in number for past years was observed as taking place partly because of this ongoing economic recession.
As stated by Henneman, what the media says about the effects of recession reveals something to be considered. She said that money is primarily involved in insurance fraud cases. Because of this, people who are under financial difficulty may see their coverage or policy contracts as a potential source of money. It is their idea that they have a right to claim its proceeds because in the first place, they have been paying premiums regularly.
Another reason cited by Henneman is that MIA is a part of a system dedicated to the communication and reporting of electronic fraud. The National Insurance Crime Bureau and the Insurance Services Office paved the way for MIA to adopt this system. The state of Maryland is only one of 46 other states which have made use of electronic systems for filing insurance claims. As part of the program, provider companies simply communicate information about the case to be sent to government agencies tasked with its investigation. Because of its ease of use and obvious reliability, MIA has received around 75% of the total number of cases through its electronic system.
It has been a common fact among insurance fraud cases that claims are fictitious. Owners have begun to deliberately report false car theft reports; even to the extent of causing destruction themselves just so they can claim on a policy. In addition, these are not being done by seasoned offenders – it has been found that ordinary, middle class citizens with no criminal record whatsoever are responsible. The bulk of all cases received by the administration involve false claims and fictitious circumstances.
