Insurance stakeholders back mandatory fraud reporting; committee to draft NCOIL‑based bill (with modifications)

The committee considered an updated insurance‑fraud model act (NCOIL/NAIC‑style) calling for mandatory fraud reporting. Marian Smith of the National Insurance Crime Bureau said the model act’s updated definitions (including inflated billing) and civil‑immunity provisions address shortcomings of prior proposals and would improve detection and information sharing.

Insurance industry representatives told the committee they generally support mandatory reporting but urged changes before adopting the model verbatim. Members of the industry and legal counsel recommended removing or tailoring section 11, which in the model would require the Department of Insurance to create an anti‑fraud unit and mandate specific carrier anti‑fraud programs. The state insurance commissioner and department staff said the department is small and would prefer that the committee either remove the mandatory anti‑fraud unit language or permit alternatives (e.g., insurer plans and coordinated reporting with shared analytics) rather than expanding the department’s operational duties.

The committee voted to have staff convert the model act into Wyoming form, omitting or modifying the anti‑fraud unit provision for later negotiation, and to return a draft at the next meeting for stakeholder review.

The committee’s next steps: LSO will prepare a Wyoming‑style draft with the suggested deletions and clarifying language on immunity and reporting procedures so industry, regulators and consumer advocates can review it before further action.