Organizations urge Arizona to keep fraud unit

posted by Lawrence Shipman

Three organizations are urging the governor of Arizona to avoid any budget cuts that could eliminate the fraud unit in the state's Department of Insurance.

The National Insurance Crime Bureau, the Coalition Against Insurance Fraud and the International Association of Special Investigation Units all sent a letter to Arizona Governor Jan Brewer in which they said eliminating the fraud unit could end up increasing insurance quotes for consumers in the state.

The letter from the groups noted that criminals seeking to commit insurance fraud may end up flocking to the state if the unit is eliminated. The organizations said the state's fraud unit has already been reduced from 14 to 4 members.

"Without question, there will be an eventual and inevitable rise in insurance costs for Arizona businesses and Arizona residents," the letter stated.

The Arizona Department of Insurance itself recognizes how much insurance fraud can affect the cost of coverage. According to its website, the estimated losses from insurance fraud amount to $100 billion a year, and 10 percent of all insurance claims may end up being fraudulent.