Forward of subsequent week’s particular legislative session, Florida’s chief monetary officer is asking lawmakers for $6.5 million to fund 23 new investigative positions and to launch a public schooling marketing campaign, a part of his proposal to fight insurance coverage fraud and cut back losses for insurers.
CFO Jimmy Patronis, whose Division of Monetary Companies oversees insurance coverage fraud investigations and public adjusters, is also urging legislators to tweak state legislation to permit whistleblowers to get well damages in insurance coverage fraud circumstances. One other a part of his five-point plan would grant $25,000 rewards to individuals who present info resulting in the arrest, not the conviction, of individuals engaged in alleged fraud.
“Florida communities are beneath assault by fraudsters who’re prepared to strive something to recreation the system. They’re stealing from us all!” Patronis mentioned at a information convention final week. “To win this struggle, we’d like the troops, the weapons, and a full dedication to the mission.”
The funding supply could be as much as the Legislature however may come from the state’s Insurance coverage Regulatory Belief Fund, which is funded partly by insurer funds, or from the state’s basic fund, a spokesman for Patronis mentioned. DFS doesn’t but have a sponsor for a funding invoice however is working with legislative employees, communications director Devin Galetta mentioned.
Some $3 million would go to the schooling marketing campaign and $3.5 million could be wanted for 3 extra anti-fraud squads, bringing the overall variety of DFS fraud groups to 5. The brand new squads would come with 15 detectives and three supervisors; three attorneys and an administrator to prosecute circumstances; and an analyst to expedite investigations, DFS defined.
Some lawmakers and insurance coverage trade leaders have questioned why DFS has not pursued insurance coverage fraud extra aggressively already, since fraudulent roof and water-damage claims have been cited as a number one reason for loss prices and loss adjustment bills. The DFS obtained greater than 1,700 ideas or experiences on suspected insurance coverage fraud in 2021, however simply 14 folks had been convicted, Tampa TV station WFLA reported final week.
“So we began at 1,700 and we held accountable 14 convictions. That considerations me a bit of bit,” mentioned state Rep. David Smith, R- Seminole.
At a legislative committee listening to final fall, the DFS fraud staff director mentioned that house owner insurance coverage fraud is troublesome to show and time-consuming to prosecute. Patronis additionally mentioned that state legal guidelines don’t particularly outlaw some practices. Statutes prohibit contractors from providing to pay an insured’s deductible, however there are methods round that and proving intent might be difficult.
“I can at all times use extra assist however the assist that we actually want is with the Florida Legislature to shut the loopholes which might be permitting the gaming of the system. That’s what’s driving your insurance coverage charges up,” Patronis instructed WFLA information.
Gov. Ron DeSantis known as the particular session for Might 23-27, after the common session of the Florida Legislature this spring did not cross vital measures addressing the insurance coverage disaster within the state. Three property insurers have turn into bancrupt this yr and a 3rd will wind down operations quickly. Policyholders throughout the state have seen premiums improve sharply as insurers blame storm harm, fraudulent roof claims and excessive quantities of claims litigation for mounting losses.
In his proclamation convening the session, DeSantis outlined a number of proposals that might be on the agenda. A type of is appropriations and one other mentions the state Workplace of Insurance coverage Regulation. OIR is housed beneath DFS, however the governor’s proclamation didn’t particularly identify the Division of Monetary Companies.
Patronis stunned many throughout Florida on the information convention final Thursday when he mentioned that the session must also ban the bundling of task of advantages agreements.
“We can’t enable legislation companies, or public adjusters, to get within the enterprise of bundling AOBs and promoting them for revenue like a safety,” Patronis mentioned in an announcement. “I wish to deter a feeding frenzy of unhealthy actors from going after shoppers to promote AOBs on the open market.”
He didn’t present additional details about the bundling practices, who’s engaged in it, or the way it works. A employees member didn’t present additional particulars by Monday morning.
The observe of bundling monetary devices and promoting them as investments reared its head throughout the U.S. housing bubble of the mid-2000s. Funding banks bundled hundreds of residence mortgages, referred to as collaterized debt obligations or CDOs, and bought them to buyers.
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