Organized Crime and Insurance Fraud

Jan 22, 2013, 06:00 ET from National Insurance Crime Bureau

"Field of Schemes—If Insurance Funds It; They Will Come"

DES PLAINES, Ill., Jan. 22, 2013 /PRNewswire-USNewswire/ -- The National Insurance Crime Bureau (NICB) today released a ForeCAST(SM) analysis that examines the impact that organized crime groups have on insurance fraud.  Covering the period from Jan. 1, 2008, through June 30, 2012, analysts reviewed 13,014 questionable insurance claims.

Questionable claims (QCs) are claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain up to seven referral reasons. For this report, just QCs with a referral reason of "organized group/ring activity" (OGA) were identified.

The NICB defines organized crime groups as "any specific group made up of entities and/or individuals who systematically and repeatedly conduct pre-planned activities for the purpose of generating fraudulent insurance schemes."

See the full report here.    

Overall, there were 13,014 OGA QCs referred to NICB during this period.  The top five states that generated the most were:  Florida (3,530), California (2,679), Michigan (1,080), Texas (1,050) and New York (765).  The top five cities generating the most were:  Los Angeles (752), New York (595), Miami (575), Detroit (545) and Tampa (545).

The insurance policy type most represented in the analysis was "personal automobile," accounting for 10,659 referrals.  This suggests a rather strong correlation between the kinds of alleged fraud schemes most perpetrated by OGAs—staged and caused accidents.  This is further evident when looking at these QCs by loss type.

The referral reason most often coupled with the OGA referral was by far "staged/caused accident."  It was indicated 4,347 times.  The loss type with the most referrals was bodily injury with 4,401 referrals.

The results of this QC analysis correlates with what NICB agents and analysts are seeing in their cases—particularly in the no-fault, personal injury protection (PIP) states like Florida, Michigan and New York.

Staged/caused accidents are perpetrated by individuals who are skilled in committing insurance fraud.  Those "accidents" set the stage for subsequent acts of fraud ranging from faked or exaggerated injuries to unnecessary or excessive medical treatment.  At each step in the process—from accident "victims" to medical treatment—individuals are receiving payments to feign injuries and undergo expensive treatments in order to continue the flow of money coming ultimately from insurance companies.

Insurance fraud is not a victimless crime; we all pay for this greed through higher insurance premiums.  If you suspect someone is committing insurance fraud, report it.

Anyone with information concerning insurance fraud can report it anonymously by calling toll-free 1-800-TEL-NICB (1-800-835-6422), texting keyword "fraud" to TIP411 (847411) or by visiting our website at  Or, iPhone or iPad users can download the NICB Fraud Tips to make it easy to quickly send a tip and get a response.

About the National Insurance Crime Bureau:  headquartered in Des Plaines, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, training, legislative advocacy and public awareness.  The NICB is supported by more than 1,100 property and casualty insurance companies and self-insured organizations.  NICB member companies wrote over $339 billion in insurance premiums in 2011, or approximately 80 percent of the nation's property/casualty insurance.  That includes more than 94 percent ($156 billion) of the nation's personal auto insurance. To learn more visit

SOURCE National Insurance Crime Bureau