Senate Bill No. 167

(By Senators Wiedebusch and Kimble)

____________

[Introduced January 24, 1995; referred to the Committee
on the Judiciary.]
____________




A BILL to amend chapter sixty-one of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article five-b, relating to establishing the West Virginia insurance fraud act; defining legislative intent and terms; creating misdemeanor and felony offenses for the filing of fraudulent insurance applications, statements, claims, reports or other such documents; establishing penalties; and creating exceptions and immunities.

Be it enacted by the Legislature of West Virginia:
That chapter sixty-one of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article five-b, to read as follows:
ARTICLE 5B. WEST VIRGINIA INSURANCE FRAUD ACT.
§61-5B-1. Short title.
This article may be known and cited as the "West Virginia Insurance Fraud Act."
§61-5B-2. Legislative intent.
The Legislature of the state of West Virginia hereby recognizes that insurance fraud is inherent in all aspects of the industry, from policyholders to claimants and providers to insurers themselves. Such practices are a violation of the public policy of this state and, ultimately, result in an increase in insurance costs to consumers. The intent of the West Virginia Insurance Fraud Act is to prohibit the giving of false or fraudulent information by any person in any capacity; to assist public officials, government agencies and insurers in the investigation of fraudulent activities; and to establish penalties for violation of this article in an effort to deter such activities and reduce costs.
§61-5B-3. Definitions.
For purposes of this article the following definitions shall apply:
(a) "Authorized government agency" means:
(1) The division of public safety of this state, the police department of any municipality, any county sheriff's department, and any duly constituted criminal investigative department or agency of the United States;
(2) The prosecuting attorney of any county of this state or of the United States or any district thereof; or
(3) The state insurance commissioner or the division of motor vehicles.
(b) "Claimant" means any person, as defined herein, who submits a claim for payment to an insurer as either an insured under an insurance policy, a beneficiary of the policy or a provider of services to an insured, including, but not limited to, policyholders and family members included as insureds in the policy; persons entitled to payment under property or liability coverage provisions; administrators, devisees and legatees of a deceased policyholder; hospitals, physicians and other providers of medical services; and banks, credit unions, lienholders or other creditors of an insured.
(c) "Commissioner" means the insurance commissioner of West Virginia.
(d) "Insured" means any person, as defined herein, who is entitled to insurance coverage, benefits or protection pursuant to a policy of insurance issued by any insurer, including, but not limited to, the policyholder, family members included as insureds or beneficiaries and any person entitled to property or liability coverage pursuant to the terms of such policy.
(e) "Insurer" means any entity, firm or corporation licensed to do business in this state which issues any policy of insurance as defined by section ten, article one, chapter thirty-three of this code, including, but not limited to, life, accident and sickness, automobile, fire, property or casualty and credit insurance.
(f) "Insurance representative" means any insurer or officer, employee, adjuster, investigator or agent acting on an insurer's behalf.
(g) "Person" means any individual, company, insurer, insurance representative, agent, adjustor, physician, nurse, technician, medical services provider, hospital, association, organization, society, reciprocal, partnership, syndicate, business trust, corporation or any other legal entity.
(h) "Statement" includes, but is not limited to:
(1) Any oral report, representation or summary made or given to any insurer, insurance representative or authorized government agency; or
(2) Any written application; report; representation; accounting; notice; claim; notice or proof of loss, injury, expense, condition or title; estimate of property damage; bill for services, diagnosis, prescriptions, X rays, test results, records or other such expenses; assignment of title; bill of sale; release of lien; bill of lading; receipt for payment; invoice; or other such writing or document made or given to any insurer, insurance representative or authorized government agency.
§61-5B-4. Fraudulent acts prohibited.
(a) Any person who, with the intent to injure, defraud or deceive any insurer presents or causes to be presented to any insurer or insurance representative, any written or oral statement as part of or in support of an application for insurance or a claim for payment or other benefit pursuant to an insurance policy, knowing that such statement contains any false, incomplete or misleading information, is guilty of a misdemeanor or felony, as determined by the provisions of section five of this article, and, upon conviction thereof, shall be fined, imprisoned or both, as more particularly provided in said section five.
(b) Any person who assists, abets, solicits or conspires with another to prepare or make any written or oral statement that is intended to be presented to any insurer in connection with or in support of any application for insurance or any claim for payment or other benefit pursuant to an insurance policy knowing that such statement contains any false, incomplete or misleading information concerning any fact or thing material to such claim, is guilty of a misdemeanor or felony, as determined by the provisions of section five of this article, and upon conviction thereof, shall be fined, imprisoned or both, as more particularly provided in said section five.
(c) Any insurer or insurance representative who submits or causes to be submitted to any authorized government agency any written or oral statement as part of or in support of any application, audit, report, valuation, statement, appraisal, estimation of loss, publication, certificate, actuarial report or study, filing, financial statement, tax return, rate request, petition or any other such document knowing that such statement contains any false, incomplete or misleading information concerning any fact or material issue, is guilty of a felony, and, upon conviction thereof, shall be fined not more than five thousand dollars, or confined in the penitentiary not less than one year nor more than five years, or both fined and imprisoned: Provided, That the commissioner may, after notice and hearing, refuse to renew or revoke or suspend the license of any insurer convicted of a violation of this subsection as provided by article three, chapter thirty-three of this code.
§61-5B-5. Penalties.
(a) Except as otherwise provided, if any person violates the provisions of this article and such act results in a payment, benefit or loss with a value of two hundred dollars or more to any person, such person is guilty of a felony, and, upon conviction thereof, shall be fined not less than five hundred dollars nor more than five thousand dollars, or confined in the penitentiary not less than one year nor more than five years, or both fined and imprisoned.
(b) Except as otherwise provided, if any person violates the provisions of this article and such act results in a payment, benefit or loss with a value of less than two hundred dollars to any person, such person is guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than five hundred dollars, or confined in the county jail for a term not to exceed one year, or both fined and imprisoned.
§61-5B-6. Immunities and exceptions.
(a) The provisions of this article are not applicable to an accused in any criminal case who, under the provisions of article three, section five of the Constitution of the state of West Virginia, could not be compelled to be a witness against himself, unless such accused shall have voluntarily and intelligently waived the right to remain silent prior to making or giving such statement or representation.
(b) The provisions of this article are not applicable to a person in the relation of husband and wife, parent or grandparent, child or grandchild, brother or sister, by consanguinity or affinity, of an accused in any criminal case, when such person, after the commission of an offense shall aid or assist the accused to avoid or escape from prosecution or punishment.



NOTE: The purpose of this bill is to create the West Virginia Insurance Fraud Act.

This article is new; therefore, strike-throughs and underscoring have been omitted.