Anti-Fraud Groups: Abolishing State's Fraud Unit Will Increase Cost of Insurance

WASHINGTON, Nov. 5 /PRNewswire-USNewswire/ -- Consumers in Arizona should expect to pay more for insurance in the future if a budget proposal to axe the state's fraud bureau goes through, three national anti-fraud groups warned today. A preliminary proposal being considered in the state would abolish the fraud unit in the Department of Insurance, and halt the state's investigations of a wide range of insurance crimes.

The three groups -- the National Insurance Crime Bureau, the Coalition Against Insurance Fraud and the International Association of Special Investigation Units -- urged Gov. Jan Brewer to resist the cutback, citing an increased level of insurance fraud during the current down economy. In the letter to Gov. Brewer, the groups said the state already has reduced the number of fulltime employees in the Fraud Unit from 14 to 4. "Since criminals seek the path of least resistance, any further cuts to the Fraud Unit would put the economic health of Arizona and its residents at risk," the groups warned.

Organized fraud rings will rush to fill the enforcement void left by the Fraud Unit's demise, the three groups predicted. "Without question, there will be an eventual and inevitable rise in insurance costs for Arizona businesses and Arizona residents," the letter to the governor further warned.

A total of 47 state bureaus around the country have been created to investigate and prosecute insurance fraud. Several have faced budget cuts this year, but none have been wholly eliminated. Arizona would be the first.