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1 Insurance Fraud Dennis Pompa, Associate Commissioner Texas Department of Insurance Fraud Unit.

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Presentation on theme: "1 Insurance Fraud Dennis Pompa, Associate Commissioner Texas Department of Insurance Fraud Unit."— Presentation transcript:

1 1 Insurance Fraud Dennis Pompa, Associate Commissioner Texas Department of Insurance Fraud Unit

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3 3 Insurance Fraud Insurance fraud is an intentional deception committed by applicants, policyholders, claimants, providers, agents/adjusters and company employees It frequently occurs during the process of buying, using, selling and underwriting insurance Insurance fraud is usually motivated by greed

4 4 Source: Coalition Against Insurance Fraud Insurance Fraud Insurance fraud is the second most costly white-collar crime after tax evasion More dollars are lost to insurance claim fraud that in all armed robberies

5 5 $120 billion per year – costs each US family $300-$1,000 per year! The Cost of Claim Fraud Source: Coalition Against Insurance Fraud

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7 7 Fraud Unit Established pursuant to Texas Insurance Code, Chapter 701 Investigates fraudulent insurance acts for referral to district attorneys and federal prosecutors Employs certified peace officers, prosecutors, certified fraud examiners, certified internal auditors and criminal analysts

8 8 What the Fraud Unit Does Receives reports of suspected insurance fraud Coordinates investigations with law enforcement and state agencies Interviews suspects and witnesses Acquires and analyzes financial, business and legal documents Documents the flow of money transactions Prepares comprehensive investigative reports for submission to a prosecuting agency

9 9 Types of Insurance Fraud Investigated Agent/adjuster Company officer Unauthorized/ unlicensed entity Claim Health insurance Life insurance Arson Provider fraud Disability Workers compensation Application fraud

10 10 Laws That Govern Insurance Fraud in Texas Texas Labor Code (penal violations) Texas Insurance Code (penal violations) Texas Penal Code Chapter 35 Theft statutes Misapplication of fiduciary funds Federal statutes 18 U.S. Code Section 1033, 3034 Mail fraud Wire fraud

11 11 TDI Fraud Unit Liaison Initiative Dallas County District Attorney Police departments District attorneys Texas Department of Public Safety Sheriffs departments Attorney General FBI IRS United States attorneys Texas state agencies Postal inspection service Department of Labor Food and Drug Administration Insurance company special investigative units National Insurance Crime Bureau

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13 13 Reporting Fraud Consumers may report insurance fraud by calling Insurance Fraud Hotline Sponsored by Texas Department of Insurance Online Reporting Available Follow link to Insurance Fraud

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