Bill Text - HB659 (2009)

Relative to insurance fraud.


Revision: Feb. 17, 2009, midnight

HB 659-FN – AS INTRODUCED

2009 SESSION

09-0725

01/10

HOUSE BILL 659-FN

AN ACT relative to insurance fraud.

SPONSORS: Rep. DeStefano, Merr 13

COMMITTEE: Commerce and Consumer Affairs

ANALYSIS

This bill modifies certain laws relative to insurance fraud and forgery.

This bill is a request of the insurance department.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0725

01/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT relative to insurance fraud.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Insurance Companies; Fraud. Amend RSA 402:78, I to read as follows:

I. Any law enforcement investigator may request an insurance company to release any information in its possession relative to the disappearance, theft or loss of any motor vehicle, or other personal property or relative to a violation of RSA 260:10, RSA 261:30, RSA 261:46, RSA 261:52, RSA 261:178, RSA 262:1, I(d), RSA 263:5-a, VI, RSA 263:5-e or RSA 263:12, V. The insurance company shall release the information and cooperate with any official authorized to request such information pursuant to this section. The information may include but not be limited to:

(a) Any relevant insurance policy;

(b) Policy premium payments records;

(c) History of previous claims made by the insured for the theft, loss or disappearance of any motor vehicle or other personal property;

(d) Any other material relating to the investigation of the theft, loss or disappearance, or violation of the RSA provisions listed in paragraph I.

2 Fraud; Forgery. Amend RSA 638:1, I-III to read as follows:

I. A person is guilty of forgery if, with purpose to defraud anyone, or with knowledge that he or she is facilitating a fraud to be perpetrated by anyone, he or she:

(a) Alters any writing of another without his or her authority or utters any such altered writing; or

(b) Makes, completes, executes, authenticates, issues, transfers, publishes or otherwise utters any writing so that it purports to be the act of another, or purports to have been executed at a time or place or in a numbered sequence other than was in fact the case, or to be a copy of an original when no such original existed or that purports to be a valid insurance document when it is not.

II. [As used] In this section[,]:

(a) “Insurance document” means an insurance application or any supporting documentation, an insurance policy or contract or any supporting documentation, a policy amendment or change form, an illustration, a delivery receipt, a declaration page, or a certificate, or any other document related to a contract for insurance or that demonstrates the existence of an insurance policy.

(b) “Writing” includes printing or any other method of recording information, checks, tokens, stamps, seals, credit cards, badges, trademarks, and other symbols of value, right, privilege, or identification.

III. Forgery is a class B felony if the writing is or purports to be:

(a) A security, revenue stamp, or any other instrument issued by a government, or any agency thereof; [or]

(b) A check, an issue of stocks, bonds, or any other instrument representing an interest in or a claim against property, or a pecuniary interest in or claim against any person or enterprise; or

(c) An insurance document.

3 Insurance Fraud. Amend RSA 638:20, I-a-IV to read as follows:

I-a. For purposes of this section, “insurer” includes any insurance company, health maintenance organization, or reinsurance company, or [broker or agent] producer thereof, or insurance claims adjuster, or other person or entity regulated under title XXXVII.

II. A person is guilty of insurance fraud, if, such person knowingly and with [intent] a purpose to injure, defraud or deceive any insurer, conceals or causes to be concealed from any insurer a material statement or fact, or presents or causes to be presented to any insurer, or prepares with knowledge or belief that it will be so presented, any written or oral statement including computer-generated documents, knowing that such statement contains any false, incomplete or misleading information which is material to:

(a) An application for the issuance, renewal, or reinstatement of any insurance policy.

(b) The rating of any insurance policy.

(c) A claim for payment or benefit pursuant to any insurance policy.

(d) Premiums on any insurance policy.

(e) Payments made in accordance with the terms of any insurance policy.

(f) Any investigation conducted relative to any claim for payment or benefit pursuant to any insurance policy.

III. A person is guilty as an accomplice to insurance fraud, if, with a purpose to injure, defraud or deceive any insurer, the person assists, abets, solicits or conspires with another to commit insurance fraud, as defined in paragraph II of this section.

IV.(a) Insurance fraud is:

(1) A class A felony;

(A) If the value of the fraudulent portion of the claim for payment or other benefit pursuant to an insurance policy is more than $1,000[.];

(B) If the difference between the premium actually charged and the premium amount that would have been charged if accurate information had been provided is more than $1,000; or

(C) If the violation involves subparagraph II(a).

(2) A class B felony:

(A) If the value of the fraudulent portion of the claim for payment or other benefit pursuant to an insurance policy is more than $500, but not more than $1,000.

(B) If the difference between the premium actually charged and the premium amount that would have been charged if accurate information had been provided is more than $500 but not more than $1,000.

(3) A misdemeanor in all other cases.

(b) The value shall be determined according to the provisions of RSA 637:2, V.

4 Effective Date. This act shall take effect upon its passage.

LBAO

09-0725

Revised 02/17/09

HB 659 FISCAL NOTE

AN ACT relative to insurance fraud.

FISCAL IMPACT:

      The Judicial Branch, the Judicial Council, the Department of Justice, the Department of Corrections, and the New Hampshire Association of Counties state this bill may increase state and county expenditures by an indeterminable amount in FY 2009 and each year thereafter. There will be no fiscal impact on local expenditures or state, county, and local revenue.

METHODOLOGY:

    The Judicial Branch states this bill would amend various laws dealing with insurance fraud. The Branch states the proposed amendments with a potential fiscal impact are the addition of insurance documents to the items covered under the forgery statute and the expansion of the definition of acts constituting insurance fraud. These changes could increase the incidence of both misdemeanor and felony cases, however the Branch has no information to estimate how many charges would be brought as a result of the changes contained in the bill to determine the actual fiscal impact on expenditures. The Branch states the average cost of a misdemeanor case in the district or superior court is $35.75 in FY 2009 and each year thereafter, and the average cost of a routine felony case is $335.98 in FY 2009 and each year thereafter. Also, if even a single case were to be appealed to the New Hampshire Supreme Court, the fiscal impact would be in excess of $10,000.

    The Judicial Council states this bill may result in an indeterminable increase in general fund expenditures. The Council states if an individual is found to be indigent, the flat fee of $275 per misdemeanor or $756.25 per felony is charged by a public defender or contract attorney. If an assigned counsel attorney is used the fee is $60 per hour with a cap of $1,400 for a misdemeanor charge and $4,100 for a felony charge. The Council also states additional costs could be incurred if an appeal is filed. The public defender, contract attorney and assigned counsel rates for Supreme Court appeals is $2,000 per case, with many assigned counsel attorneys seeking permission to exceed the fee cap. Requests to exceed the fee cap are seldom granted. Finally, expenditures would increase if services other than counsel are requested and approved by the court during the defense of a case or during an appeal.

    The Department of Justice states the criminal offense created by the bill may increase the Department’s expenditures by an indeterminable amount, as the bill may increase insurance fraud prosecutions. If any appeals are filed, the Department would have expenditures increased further. The Department is unable to estimate how many cases would be prosecuted by the Department or appealed to the Supreme Court.

    The Department of Corrections states the average annual cost of incarcerating an individual in the general prison population for the fiscal year ending June 30, 2008 was $32,753. The average cost to supervise an individual by the Department’s division of field services for the fiscal year ending June 30, 2008 was $779. As the proposed amendments may increase convictions, the Department states this bill may increase expenditures by an indeterminable amount, but is unable to predict the number of individuals that might be impacted.

    The New Hampshire Association of Counties states to the extent the proposed amendments lead to an increase in individuals prosecuted, convicted, and sentenced to incarceration, the counties may have increased expenditures. The Association is unable to determine the number of individuals who might be detained or incarcerated as a result of this bill. The average cost to incarcerate an individual in a county facility is $30,165 a year.

    The Insurance Department states the bill would not have a fiscal impact, as any costs related to an increase in insurance fraud violations could be absorbed without any additional funding.

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