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KANSAS CITY, Mo., Jan. 27, 2005 – LAWFUEL – The Law News Network – As …

KANSAS CITY, Mo., Jan. 27, 2005 – LAWFUEL – The Law News Network – As part of the ongoing steps to proactively address issues surrounding the use of
compensation arrangements by insurance brokers, the National
Association of Insurance Commissioners (NAIC) announced
today that an online insurance fraud reporting system is now
featured on the association’s Website, http://www.naic.org.

The online fraud reporting system – which allows consumers
to provide detailed information anonymously – is one part of
the NAIC’s three-prong action plan, developed by the NAIC
Executive Task Force on Broker Activities over the preceding
months to protect consumer interests.

“State insurance regulators continue to move forward on a
coordinated mission to deal with the issue of broker
compensation aggressively,” said Diane Koken, NAIC president
and Pennsylvania Insurance Commissioner. “The addition of
online fraud reporting capabilities to the NAIC’s Website is
another step toward our goal of addressing alleged
misconduct and violation of existing insurance laws
involving insurance companies and insurance brokers.”

The insurance fraud reporting system is available via the
NAIC Website or directly at
https://external-apps.naic.org/fraud/ofrs_entry.jsp. It is
accessible from two links on the NAIC home page: under the
“New and Noteworthy” section and through the Consumer
Information Source.

No personal identifying information is required to submit an
allegation of suspected fraud. A consumer wishing to receive
verification of the NAIC’s receipt of the report is required
to provide a name and e-mail address. Consumers also may
choose to provide additional contact information to
facilitate additional communication from the state insurance
department that investigates this report.

To file a suspected insurance fraud report, consumers are
required to indicate the state where the suspected fraud
occurred, name of the business or individual, with a
complete mailing address. Other optional fields include the
phone number and date of birth, as well as date of suspected
fraud and amount of loss. The report also includes a text
box allowing the consumer to provide additional details of
the suspected fraud.

In addition to the online fraud reporting system, the Task
Force – which was formed by the NAIC last fall – developed
two more components to address the issue of broker
compensation. These components are: development of a model
act to create more transparency for insurance consumers
through better disclosure of broker compensation
arrangements; and coordination of state insurance
departments’ efforts to address improper conduct by brokers
and insurers through investigation and collection of
relevant information.

The NAIC has worked quickly to ensure consumers have the
information they need when purchasing insurance, since the
October findings of a joint investigation by the New York
Attorney General and the New York Insurance Department led
to the filing of a complaint against a large insurance
brokerage firm surrounding issues of broker compensation.

“As the investigation into alleged criminal conduct and
violation of insurance laws moves ahead, state insurance
regulators continue to work together to provide guidance and
insight for law enforcement officials,” said Koken. “As the
national consumer watchdog on the insurance industry, the
NAIC is committed to quickly addressing the issues and
protecting consumer interests.”

About the NAIC

Headquartered in Kansas City, Missouri, the National
Association of Insurance Commissioners (NAIC) is a voluntary
organization of the chief insurance regulatory officials of
the 50 states, the District of Columbia and U.S.
territories. The association’s overriding objective is to
protect consumers and help maintain the financial stability
of the insurance industry by offering financial, actuarial,
legal, computer, research, market conduct and economic
expertise. Formed in 1871, it is the oldest association of
state officials. For more information, visit the NAIC on the
Web at http://www.naic.org/pressroom.

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