Unfortunately for the industry, insurance fraud is an everyday reality in the world of insurance.
Certain ne’er-do-wells seem to be always trying to pull a fast one over insurance companies, either by misrepresenting themselves during the original application process, or attempting to fraudulently file a claim or add more coverage. A perfect example was reported on this blog several weeks ago, in the form of a woman attempting to add more coverage to her automobile insurance policy from the inside of an ambulance, where she had just found herself following a car accident.
Due to the misdeeds of people like this, insurance professionals must always stay on their toes when investigating applicants and claims. However, there is such a thing as overkill – and it lives in Oklahoma.
Insurance Fraud Overkill
Among these lavish expenditures were five 2012 Dodge Chargers (each valued at $23,590) and two 2013 Chevrolet Tahoes ($26,205 each). Each of these cars was outfitted with souped-up suspensions and wiring for additional communication equipment.
For his part, OID Commissioner John Doak defended the purchases. He cited a case in Louisiana where two fraud investigators were shot and killed while attempting to collect records from a suspended insurance agent.
“We serve a lot of warrants, and people are very, very distressed when a fraud investigator shows up at their door,” Doak said. “I don’t want anyone at my office shot and killed because they weren’t adequately trained.”
Seems like a reasonable explanation, save for the fact that the OID’s anti-fraud team mostly investigates white-collar crimes. Lawmakers around the state are wondering aloud why the agency needs equipment that typically remains the sole privilege of police forces and SWAT teams.
“I don’t think Oklahomans as a whole are going to relish the day when their neighborhood is full of official police-package insurance department police cars as they’re executing an arrest on a guy who did a fraudulent insurance claim,” said Rep. Jason Murphey, (R-Guthrie), chairman of the House Government Modernization Committee.
“For the life of me, I never could come to grasp with why the Insurance Department couldn’t take a local sheriff’s deputy, or someone responsible to the local community, with them when they do these arrests.”
Of course, when it comes to large expenditures by government entities, larger forces may be at play. Commissioner Doak emphasized that the vehicles and equipment were not funded by taxpayer money, but instead by a special revolving fund created by Oklahoma lawmakers that receives money from fines, settlements and other fees issued in the state.
However, Murphey claims that OID officials told him they feared state lawmakers would utilize this fund for their own purposes, and perhaps spent the money themselves before anyone else could take advantage.
“I think the department was afraid that the Legislature would see [the fund’s] balance and raid the fund, so they went looking for investment opportunities, and this was one of them,” Murphey said. “I really counseled against it and expressed some concern.”
As one can see, questions remain following the purchase of this so-called “anti-fraud” equipment. Are Oklahoma insurance officials, who live in a state famously associated with the “Wild West” era of American history, electing to respond to insurance fraud with aggressive, cowboy-style tactics? Or was the Department worried that it might miss out on state funds, and decided to spend it on themselves before anyone could deprive them of the opportunity?
Whatever the case, insurance customers in Oklahoma shouldn’t be surprised if a SWAT team comes knocking on their door one day. It’s just the friendly Oklahoma Insurance Department, making sure you aren’t ripping them off.