History of the Fraud Division
Insurance Fraud Costs Consumers
According to the National Insurance Crime Bureau (NICB), insurance fraud nationwide totals $20 billion annually. In California alone, it is estimated that from $1 to $3 billion is attributable to workers' compensation fraud annually. Insurance fraud results in higher insurance premiums and contributes to higher prices of goods and services to the consumer. It is estimated that auto insurance fraud alone costs each consumer an additional $200 a year per policy.
All licensed California insurance companies (approx. 1,500) are required by law to report suspected fraudulent claims to the Fraud Division for review and possible investigation. Citizen complaints and Division-initiated cases round out the sources of investigations.
Basic funding for the Fraud Division is derived from an annual assessment on insurers recently increased to $1,300 in 2000 as per Senate Bill 1988. Additional special assessment funding is provided for the enhanced investigation and prosecution of automobile and workers' compensation fraud. No general tax revenue is used.
Organization
Fraud Division Regional Offices are located in Sacramento, Benicia, City of Commerce, Orange, San Diego, Fresno, San Jose, Rancho Cucamonga and Valencia.
Each regional office maintains a staff of criminal investigators, which investigates cases from all three fraud programs, and provides training and assistance to allied law enforcement agencies. Prosecutable fraud cases are presented to the appropriate county and federal prosecutors served by the regional offices.
Fraud Division investigators are trained peace officers who are required by law to maintain Peace Officer Standards and Training (POST) certification. Division investigators are authorized to carry firearms, serve warrants and make arrests.
