71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2683
House Bill 3390
Sponsored by Representative KRUMMEL
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Creates crime of engaging in fraudulent insurance act.
Punishes by maximum of five years' imprisonment, $100,000 fine,
or both.
Creates crime of trafficking in insurance claims. Punishes by
maximum of one year's imprisonment, $5,000 fine, or both.
Enhances penalty for repeat offenders.
Imposes reporting requirements regarding insurance fraud.
Grants civil immunity for making certain reports.
A BILL FOR AN ACT
Relating to insurance.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 3 of this 2001 Act:
(1) 'Claimant' means a person who has an insurance claim.
(2) 'Health care payor' means an insurance company authorized
to provide health insurance in Oregon, a health care service
contractor, a health maintenance organization, a legal entity
that is self-insured and provides health care benefits to its
employees and a person responsible for paying for health care
services.
(3) 'Health care service' means a service provided to a
claimant for treatment of physical or mental illness or injury
arising in whole or substantial part from trauma.
(4) 'Insurance claim' means a claim for payment, benefits or
damages under a contract, plan or policy of casualty, property,
health or life insurance.
(5) 'Insurer' includes a person engaged in the business of
entering into policies of insurance and soliciting or procuring
insurance business.
(6) 'Material' means something that could affect the course or
outcome of a proceeding or transaction.
(7) 'Provider' means any person lawfully licensed or authorized
to tender any health service.
(8) 'Service provider' means a person who directly or
indirectly provides or advertises or otherwise claims to provide
services.
(9) 'Services' means health care services, motor vehicle body
or other motor vehicle repair, repair of personal and real
property and preparing, processing, presenting or negotiating an
insurance claim. + }
SECTION 2. { + (1) A person commits the crime of engaging in a
fraudulent insurance act if the person:
(a) Knowingly, and with the intent to defraud an insurer for
the purpose of obtaining money, property or benefit, presents,
causes to be presented or prepares with the knowledge that it
will be presented to an insurer, broker or agent any written
statement as part of, or in support of, an application for
issuance of an insurance policy or a claim for payment or other
benefit under an insurance policy knowing that the statement
contains false information concerning a material fact;
(b) Knowingly abets, solicits or conspires with another person
to commit an act described in paragraph (a) of this subsection;
(c) Accepts something of value, or induces another person, to
engage in an act described in paragraph (a) of this subsection;
(d) With the intent to defraud an insurer, damages property
that, at the time it is damaged, is insured against damage;
(e) Is a service provider and:
(A) Knowingly and with intent to defraud submits or causes to
be submitted a request for payment containing:
(i) Charges or costs for an item or service knowing that the
request is substantially in excess of customary charges or costs
for the item or service; or
(ii) Itemized or delineated fees for procedures or services
that would customarily be considered a single procedure or
service;
(B) Knowingly and with the intent to defraud furnishes or
caused to be furnished to a person an item or service knowing
that the item or service is substantially in excess of what is
required by objective findings or is of a quality that fails to
meet state professional licensing board standards;
(C) Accepts a benefit from any person knowing that the benefit
is derived from an act described in subparagraph (A) or (B) of
this paragraph; or
(D) Knowingly abets, solicits or conspires with another person
to commit an act described in subparagraph (A) or (B) of this
paragraph; or
(f) Is an insurer or an agent, employee or producer of an
insurer and knowingly:
(A) Abets, solicits or conspires with another person to commit
an act described in this subsection;
(B) Supplies false material information in a document or
statement; or
(C) With intent to defraud or deceive an insurer, presents or
causes to be presented a materially false or altered application
for insurance.
(2)(a) Except as otherwise provided in paragraph (b) of this
subsection, engaging in a fraudulent insurance act is a Class C
felony.
(b) Engaging in a fraudulent insurance act is a Class B felony
if, while committing the crime, the defendant threatened or
caused physical injury to another person. + }
SECTION 3. { + (1) A person commits the crime of trafficking
in insurance claims if the person:
(a) Knowingly employs persons to procure clients or patients
for the purpose of performing legal, medical or health care
services under a contract of insurance or of providing the basis
for a claim against an insurer; or
(b) Accepts payment from a service provider or, if the person
is a service provider, pays another person knowing the payment is
for the referral of a claimant.
(2)(a) Except as otherwise provided in paragraph (b) of this
subsection, trafficking in insurance claims is a Class A
misdemeanor.
(b) Trafficking in insurance claims is a Class C felony if the
defendant has at least one prior conviction for trafficking in
insurance claims.
(3) Subsection (1)(a) of this section does not apply if the
solicitation, procurement or referral of clients or patients is
otherwise customary and legal and is unrelated to the furtherance
of a corrupt practice. + }
SECTION 4. { + (1) The Attorney General, the Director of the
Department of Consumer and Business Services or any aggrieved
person may bring a civil action for a violation under section 2
or 3 of this 2001 Act.
(2) In an action under this section, the court may award, in
addition to any other penalties that may be prescribed by law, a
civil penalty of not less than $5,000 nor more than $25,000 plus
an assessment of not more than three times the amount of each
claim for compensation. The court may grant any equitable relief
as is necessary to prevent the transfer, concealment or
dissipation of illegal proceeds of the unlawful act or to protect
the public. + }
SECTION 5. { + No later than 60 days after a person who is
required to be licensed by the state to practice an occupation or
profession is convicted of engaging in a fraudulent insurance act
or of trafficking in insurance claims, the district attorney who
prosecuted the case shall notify the appropriate licensing agency
of the conviction and may notify licensing agencies in other
states in which the defendant is licensed. + }
SECTION 6. { + (1) A person who has reason to believe that a
violation of section 2 or 3 of this 2001 Act has been or is being
committed shall provide written notice of the violation to the
Director of the Department of Consumer and Business Services no
later than 60 days after developing such belief.
(2) A person acting with reasonable care is not subject to
civil liability for providing information concerning possible
violations of section 2 or 3 of this 2001 Act if the information
is provided to:
(a) The Department of Consumer and Business Services, a law
enforcement agency or an officer, agent or employee of the
department or agency; or
(b) The National Association of Insurance Commissioners. + }
SECTION 7. { + (1) By July 1, 2002, all claim forms and
applications for insurance must contain a statement permanently
affixed to the form or application that states: + }
_________________________________________________________________
{ + ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT
CLAIM FOR PAYMENT OR WHO KNOWINGLY PRESENTS FALSE INFORMATION IN
AN APPLICATION FOR INSURANCE MAY BE SUBJECT TO CIVIL FINES AND
CRIMINAL PENALTIES. + }
_________________________________________________________________
{ + (2) Failure to include the statement required by
subsection (1) of this section is not a defense against a
prosecution for violating section 2 or 3 of this 2001 Act. + }
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