Georgia Insurers, Incoming Commissioner Plan Fraud Crackdown

Georgia’s insurance industry is teaming up with state authorities to launch an ambitious effort to crack down on the rising number of insurance fraud cases.

Incoming Insurance Commissioner Ralph Hudgens, who takes office in January, said this week he plans to beef up the department’s fraud unit and hire a former prosecutor who can help build criminal cases against fraudsters.

Also, insurance executives announced a new campaign to encourage residents to turn in people who stage fake car accidents or file other false claims. The campaign is putting up 10 billboards across the state that say “Insurance Fraud Costs Everyone” and urge residents to report cases by calling 1-800-TEL-NICB.

“We can’t do it by ourselves,” said FBI Special Agent in Charge Brian Lamkin, whose agency helped coordinate the billboard campaign. “It takes a combined effort and combined partnership to address this issue.”

It’s part of an effort to curb the number of fraudulent claims in Georgia, which officials say can add hundreds of dollars to annual premiums of Georgia policy holders. The number of questionable claims in Georgia has swelled from about 2,1000 claims in 2007 to more than 2,700 in 2009.

Curt Jester of the National Insurance Crime Bureau said he hopes the effort will attract tips from the public rather than relying on law enforcement officials and industry executives.

The industry has also helped train more than 100 police officers on insurance fraud techniques, said Walter Swett, a Nationwide investigator who is also a past president of the Georgia chapter of the International Association of Special Investigation Units.

Hudgens, a Republican who replaces outgoing Insurance Commissioner John Oxendine, likened the billboard campaign to a neighborhood watch program.

“Anything we can do to reduce fraud, we’re all the beneficiary of that, because your premiums will go down,” Hudgens said. “And the more bad guys we put in jail, the more convictions we get, that will be a disincentive to people who want to perpetuate fraud.”