Report Title:

Health Care Insurance Fraud

Description:

Establishes immunity from civil liability for a person who reports insurance fraud, except in the case of malicious reporting or perjury.

HOUSE OF REPRESENTATIVES

H.B. NO.

43

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO INSURANCE FRAUD.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Insurance fraud is on the rise both locally and nationally. Everyone is adversely affected by insurance fraud, whether impacted directly as victims of insurance fraud or indirectly through the payment of increased insurance premiums. Insurance fraud costs every household throughout the United States an average of more than $500 annually. In New Jersey, the cost for no-fault insurance fraud alone was estimated to be over $246 annually per household.

Insurance fraud has also increasingly affected costs within the health insurance industry. Industry health care fraud losses are estimated at three to fourteen per cent of the $1,200,000,000,000 in annual national health care costs. This is equivalent to approximately $36,000,000,000 to $144,000,000,000 annually. In Hawaii, based on the conservative estimate that insurance fraud amounts to three per cent of annual Hawaii health care costs, insurance fraud causes losses that exceed $60,000,000 annually.

In 1998, the legislature passed Act 155, Session Laws of Hawaii 1998, to address motor vehicle insurance fraud. Act 155 established an insurance fraud investigations unit in the motor vehicle provisions of the insurance code. The Act established penalties for the offense of insurance fraud and provided immunity from civil liability for persons reporting insurance fraud.

However, insurance fraud is not exclusively a motor vehicle insurance problem and occurs across all lines of insurance. Encouraging fraud reporting across a larger portion of the health insurance industry would cut fraud losses and further reduce costs to the consumer.

The purpose of this Act is to provide immunity from civil liability for persons reporting health insurance fraud.

SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10A, part I, to be appropriately designated and to read as follows:

"431:10A- Limitation of liability. (a) A person shall not be subject to civil liability for providing information, including filing a report, furnishing oral or written evidence, or giving testimony concerning suspected, anticipated, or completed insurance fraud, to the commissioner, the National Association of Insurance Commissioners, any federal, state, or county law enforcement or regulatory agency, or another insurer, if the information is provided only for the purpose of preventing, investigating, or prosecuting insurance fraud, except where the person has acted with malice or committed perjury.

(b) As used in this section:

"Insurance fraud" shall have the meaning provided in section 431:10C-307.7.

"Malice" means having actual knowledge regarding the falsity of any information being provided under this section."

SECTION 3. Chapter 432, Hawaii Revised Statutes, is amended by adding a new section to article I, part I, to be appropriately designated and to read as follows:

"432:1- Limitation of liability. (a) A person shall not be subject to civil liability for providing information, including filing a report, furnishing oral or written evidence, or giving testimony concerning suspected, anticipated, or completed insurance fraud, to the commissioner, the National Association of Insurance Commissioners, any federal, state, or county law enforcement or regulatory agency, or another insurer, if the information is provided only for the purpose of preventing, investigating, or prosecuting insurance fraud, except where the person has acted with malice or committed perjury.

(b) As used in this section:

"Insurance fraud" shall have the meaning provided in section 431:10C-307.7.

"Malice" means having actual knowledge regarding the falsity of any information being provided under this section."

SECTION 4. Chapter 432D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"432D- Limitation of liability. (a) A person shall not be subject to civil liability for providing information, including filing a report, furnishing oral or written evidence, or giving testimony concerning suspected, anticipated, or completed insurance fraud, to the commissioner, the National Association of Insurance Commissioners, any federal, state, or county law enforcement or regulatory agency, or another insurer, if the information is provided only for the purpose of preventing, investigating, or prosecuting insurance fraud, except where the person has acted with malice or committed perjury.

(b) As used in this section:

"Insurance fraud" shall have the meaning provided in section 431:10C-307.7.

"Malice" means having actual knowledge regarding the falsity of any information being provided under this section."

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

 

INTRODUCED BY:

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