In an effort to clamp down on automobile-insurance fraud, the state Senate is expected this week to pass a bill to increase penalties for people who help to stage fake accidents.

But that’s as far as the effort may go. The Senate has passed similar bills for the past few years, as auto-insurance fraud has grown into a billion-dollar problem for insurance companies and their policyholders, and New York has retained its position as one of the most expensive states in which to insure cars and trucks.

There is no indication the measure will gain traction in the Democrat-led Assembly, where it has never been allowed on the floor for a vote.

Many insurance companies aren’t taking full advantage of technology when it comes to fighting fraud, suggests a recently released report from Boston-based research and advisory firm Celent. “There really isn’t much excuse for an insurance company to not be using some of these technologies, depending on how big they are and what the extent of their exposure is,” says Donald Light, Celent senior analyst and author of the report, “Insurance Fraud Mitigation: Beyond Red Flags.”

Despite the fact that insurers have started to put more resources into fraud-mitigation technology, Light asserts, the traditional “red flag” method — in which adjusters use predetermined lists of about 30 circumstances to gauge if a claim may be fraudulent — is still over-used. “Red flags are one of the more traditional or legacy methods of identifying fraud,” he says. “The problem is they rely totally on experience and distilled best practices. They’re limited in terms of being able to scan the totality of the claims and discover complete sets of fraud methods.”

The legislature has built more consumer protections into the state’s insurance laws. One part of the new law focuses on the growing problem of title insurance fraud. The bill adds several consumer protections to state laws governing operations of title insurance companies.

Senator Scott Rupp of Wentzville, who handled the bill in the senate says title insurance companies or their agents cannot co-mingle escrow moneys paid by clients with other funds, make sure the funds can be identified on an individual basis, and make sure the money remains the property of the client.

Nearly one of every four Americans says it’s OK to defraud insurers, according to a 2003 survey by the consulting firm Accenture Ltd.

“Most people who commit fraud think of it as a victimless crime. It’s just the insurance industry, and they have plenty of money,” said Frank Dunton, director of investigations for Virginia Farm Bureau. “But it comes back to hurting each one of us who pays insurance premiums.”

Fraud is ranked second behind tax evasion as the most common and costly white-collar crime in the United States. It’s estimated to add between $200 and $1,000 per household per year in additional premiums due to fraudulent insurance claims.

Florida’s insurance fraud division ranks second in the country, leading the nation in criminal cases it sent to prosecutors for potential trial, and ranks near the top in other key fraud-fighting categories, a Coalition Against Insurance Fraud’s state fraud bureaus study shows.

“Florida has some of the largest insurance-fraud problems in the U.S. The fraud division has mounted an energetic response, but the state needs more resources, including fraud prosecutors, before it can begin turning the corner on this crime,” said Dennis Jay, the coalition’s executive director.

The Coalition Against Insurance Fraud conducts an annual study of the 47 state anti-fraud agencies as a barometer of progress in fighting insurance fraud nationally, said James Quiggle, director of communications.

California accounted for better than one in three of all insurance fraud convictions in the United States, according to a new study.

Among 47 states studied for the report by Coalition Against Insurance Fraud, California prosecutors successfully convicted 1,546 people of insurance fraud in 2005. Florida was second with 493 convictions.

California’s fraud bureau has the largest state budget in the country, with $36.8 million earmarked for investigating potential cases.

California targets fraud scams: Insurance chief says consumers pick up the tab for crimes

Steve Poizner figures insurance scams cost each California consumer an extra $500 a year for coverage.

Vowing to come down on insurance cheats “like a ton of bricks,” the insurance commissioner has put fraud high on his agenda during his first 100 days and launched a crackdown across the state.

“Insurance fraud is so rampant in California that it causes insurance to be more expensive than it needs to be,” Poizner said Tuesday during a noontime speech to the Sacramento Press Club. “We”re going to attack fraud aggressively and drive down costs.”

It can get a bit tedious, sitting in an idling car, pulled off to the side of a country road in the pre-dawn hours.

But for Robert Wojtylak, owner of Checkmate Investigation Agency, boredom is just part of the job.

Wojtylak, a licensed private investigator, deals mainly with insurance fraud, doing shifts of surveillance to weed out those who are abusing the worker’s compensation system.

The woman he was tailing on an early morning last week has claimed to have trouble walking. She’s been on workers’ compensation for years, collecting payments while on disability.

About halfway through the four-hour surveillance, Wojtylak got what he was looking for.

States are taking a more proactive approach to fighting insurance fraud, with a 6.4 percent overall rise in fraud convictions between 2004 and 2005, according to the Coalition Against Insurance Fraud.

In its recent study of 47 state agencies, CAIF said state fraud bureaus are delivering record results in combating swindles, but the positive figures may mask deeper weaknesses in some areas.

“For the most part, fraud fighters are priming the pipelines with fresh cases that could create a new generation of convictions in the years ahead,” the report indicated. “Still, the lack of growth in convictions and cases opened is cause for concern.”

A top Federal Emergency Management Agency official testified Wednesday that he does not believe that the more than $16 billion in flood insurance claims his agency paid out after Hurricane Katrina should have been instead covered by private insurers.

David Maurstad, FEMA federal insurance administrator, told members of the House Financial Services Oversight Subcommittee that he was unaware of any attempt to defraud the National Flood Insurance Program in the aftermath of Katrina and that his agency has a rigorous oversight process to prevent such problems.

Some panel members were skeptical, noting that private insurers had a financial incentive to label much of the structural damage along the coast as a result of flooding, which is covered under the federal government’s program, rather than under their wind damage policies.

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