Driven by an annual fraud loss of $30 billion, the nation'sproperty and casualty insurance companies are taking aggressiveaction based on a two-year, industry-wide review of their fraudfighting efforts, the National Insurance Crime Bureau said.

The NICB said that while individual insurance carriers continueto refine and expand their aggressive anti-fraud processes intotheir claim-handling procedures, today's more sophisticatedcriminals continue to mutate their approaches. Fraudsters willsimultaneously target numerous companies with multiple fraudulentclaims generating millions of dollars in bogus payments. This kindof criminal enterprise, the NICB says, requires more than anindividual company is able to withstand.

With that in mind, various committees were created by the NICBand staffed with industry professionals who were charged withidentifying weak spots in existing fraud-fighting efforts. Thesegroups recently completed their work and found that the industry'sapproach to fraud was fragmented and inadequate. While there areisolated examples of effective anti-fraud programs, the NICB saysthat a nationwide, coordinated effort on multiple fronts isnecessary to reduce the crime.

They have identified five “pillars” as being critical componentsto an effective fraud-fighting structure. They are:

1. Public Awareness
2. Legislative Advocacy
3. Training
4. Data Analysis
5. Investigations

The NICB board of governors has been tasked to develop anIntegrated Business Plan (IBP) for a new fraud fightingorganization incorporating these five pillars. Overseeing theeffort is an executive steering committee staffed by Mark C.Russell, vice president and chief administrative officer, GrangeInsurance; Susan Q. Hood, claims vice president, State Farm MutualAutomobile Insurance Company; William J. Breslin, senior vicepresident, claims service, USAA; Robert M. Bryant, president andchief executive officer, NICB; and Dennis Jay, executive director,Coalition Against Insurance Fraud.

The five committees representing each of the pillars will bestaffed with professional law enforcement officers, state insuranceregulators, prosecutors, insurance executives, researchers, legalexperts and consumer advocates. They will examine the currentpractices within each of the five areas looking for successfuloperations, as well as missing elements and/or weaknesses. Thiswill be followed by a process of incorporating best practices intoeach committee's deliberations and, finally, producing a report offindings and recommendations, the NICB said.