Volume 3 Number 12
March 20, 2006

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FRAUD DIVISION’S AGGRESSIVE PURSUIT OF WORKERS’ COMP FRAUD LEADS TO REDUCTION IN PREMIUMS

Tougher Laws Lead to More Fraud Arrests, Lowered Cost for Business Owners

Tom Gallagher, Florida’s chief financial officer, announced that the Department of Financial Services, Division of Insurance Fraud’s aggressive pursuit of workers’ compensation fraud is leading to increased arrests and lower costs for Florida’s small businesses.

In fact, the Division is on target to surpass last year’s record of 213 workers’ compensation fraud arrests. In February 2006 alone, the division made 25 workers’ compensation fraud arrests – almost one a day – and since July 1, 2005, has arrested more than 153 individuals on charges of workers’ compensation fraud.

Arrests, along with laws passed in 2003 that created tougher penalties for workers’ compensation fraud, have pushed workers’ compensation premiums down for three consecutive years. Gallagher spearheaded the passage of Senate Bill 50A in 2003 that reformed the state's workers’ compensation system, including tougher penalties for workers’ compensation fraud and premium evasion. Workers’ compensation rates have dropped by more than 30 percent in the last two years, generating nearly $1 billion in savings.

“Meaningful reforms, more aggressive investigation of workers’ compensation fraud and compliance efforts have led to dramatic savings for Florida’s businesses,” Gallagher said. “We will continue to aggressively investigate cases of suspected fraud to continue to improve the system for our small businesses and our workers.”

Recent arrests include:

The Department of Financial Services, Division of Insurance Fraud, investigates fraud in all types of insurance, including health, life, auto, property and workers’ compensation. To report information about this case or any other possible insurance fraud case, call the department’s Fraud Fighters hotline at 1-800-378-0445. A reward of up to $25,000 is offered for information leading to a conviction.