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Cargo Theft January FBI announced Cargo Theft data element has been January FBI announced Cargo Theft data element has been adopted in the National UCR Program adopted in the National UCR Program - Next steps - 18 to 24 months for State UCR Programs to implement software changes Co-Chair the National Cargo Theft Task Force Co-Chair the National Cargo Theft Task Force - National Cargo Theft Summit, 10/20/2010, Washington D.C. - Organizing follow-up meetings on U.S. Capitol Hill Partnered with ISO to design CargoNet, a data network that will Partnered with ISO to design CargoNet, a data network that will improve information sharing between insurers, transportation improve information sharing between insurers, transportation companies and law enforcement companies and law enforcement 2

National Health Care Reform How does Health Care Reform impact property/casualty insurance? 3

Health Care Fraud Sophisticated enterprise Attacks both public and private … to include P&C Criminal conspiracies do not discriminate Organized Medical Fraud Rings in health care, property/casualty insurance and government programs – see no firewalls Some companies and industry are risk averse Take advantage of the fact we are reluctant to share information Huge dollar losses continue to grow and fraud is rampant 4

Health Care Reform Anti-Fraud Recommendations A dedicated federal staff to execute a national anti-fraud program in conjunction with state and local law enforcement * An increase in prosecutorial and investigative resources to fight fraud * * Strong and effective criminal penalties * * Expansion of database technologies to improve fraud detection * Litigation protection for citizens and organizations that provide information or otherwise cooperate with the anti-fraud program Creation of a public-private partnership centered around an organizational mechanism (Council) to guide anti-fraud strategy * * Mentioned in health care legislation 5

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In a Weakening Economy... The professional thieves become more aggressive Some citizens are looking at insurance fraud as an alternative to solve their financial problem Final Thoughts 7

This is a protracted conflict & the enemy: outnumbers us is more flexible and nimble than we are is taking advantage of our weakness sees insurance fraud as “easy money” 8

WE HAVE A SHARED RESPONSIBILITY TO WIN THIS CONFLICT NICB, member companies, law enforcement, and anti-fraud organizations must present a united front to protect the American people and insurer investment. 9

Questions? 10