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CA Department of Insurance

Insurance Commissioner Dave Jones Announces $1.7 Million in Grant Funding to Combat Disability and Health Insurance Fraud

News: 2012 Press Release

For Release: August 15, 2012
Media Calls Only: 916-492-3566
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Insurance Commissioner Dave Jones Announces $1.7 Million in Grant Funding to Combat Disability and Health Insurance Fraud
Funds will assist District Attorneys in investigation, prosecution

Insurance Commissioner Dave Jones today announced $1.7 million in grants to California District Attorneys aimed at combating fraudulent disability and health claims against insurance carriers. These funds assist them with the investigation and prosecution of insurance fraud.

"California's strained economy has resulted in an increase in insurance fraud schemes and local District Attorneys often have fewer resources at their disposal to fight fraud," said Commissioner Jones. "These additional funds will assist District Attorneys across the state in the ongoing fight to combat these types of fraud perpetrated against insurers."

"These funds are a shot in the arm for prosecutors," said Assemblymember Bob Blumenfield (D-San Fernando Valley). "Health insurance fraud is on the rise, leading to higher premiums for all of us. Unfortunately, fraudulent claims are increasing and there are frequently insufficient funds to investigate and prosecute these claims. We're working to change that."

The Department's Disability and Health anti-fraud program enables the investigation and prosecution of losses as a result of health insurance fraud. The current funding for this grant is generated from a 10-cent fee assessed for each insured under an individual or group health and disability insurance policy issued in the state. As a result, for every dollar invested in the pursuit of the disability and healthcare fraud program, $94 in chargeable fraud has been realized by prosecutors.

Pending legislation, AB 2138, authored by Assembly Budget Committee Chair Bob Blumenfield and sponsored by Commissioner Jones and the California Department of Insurance (CDI), proposes to increase this fee amount to up to 20 cents, which would more than double the potential funding that District Attorneys would receive from CDI in subsequent years.

The breakdown to individual counties is as follows:


FY 12/13 Grant Awards 

County Amount
Alameda $106,755
Contra Costa $20,000
Los Angeles $611,500
Orange $581,500
San Diego $207,245
Santa Clara $185,000
TOTAL $1,712,000

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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