CANOGA PARK -- Investigators from the California Department of Insurance Criminal Investigations branch, Fraud Division, arrested Nasratullah Mohammad, of Canoga Park, on January 9, 2002, on five felony counts of grand theft and insurance fraud. He was booked into the L.A. County jail and is scheduled for arraignment on January 11, 2002. Bail was set at $30,000.

The charges stem from an investigation into Mohammad’s 1996 workers’ compensation claim where he alleged he suffered cumulative trauma injury to his back as a result of heavy lifting and stocking merchandise. He was employed at a 7-Eleven food store as a clerk/cashier.

Great American Insurance Company accepted the claim and paid for a prolonged course of medical treatment and vocational rehabilitation. On March 26, 1998, Mahammad informed his vocational rehabilitation counselor he was not working and had no other source of income beyond the vocational rehabilitation maintenance allowance.

On June 4, 1998, Mohammad informed an agreed-upon medical examiner that he had not returned to work since his employment at the 7-Eleven food store. However, the investigation revealed Mohhammad was working full time as a clerk/cashier at an AM-PM Mini Mart while collecting workers’ compensation benefits.

Great American Insurance Company paid approximately $20,240.00 for vocational rehabilitation benefits for the period October 1997 through September 1998. Additionally, Great American paid approximately $41,000.00 for medical, indemnity and investigative costs.

Source: State of California

Atlanta -- Georgia Insurance Commissioner John W. Oxendine today fined Humana Employers Health Care of Georgia, Inc., for violating Georgia’s prompt pay law, the second time in as many years that Humana has been reprimanded for delaying claims payments.

Commissioner Oxendine ordered the HMO to pay a penalty of $400,000. The fine is the latest, and largest, in a series of fines against health maintenance organizations and other healthcare plans resulting from ongoing reviews by Commissioner Oxendine’s office of claims data that the plans are required to submit quarterly.

"I am disappointed that Humana hasn’t been more conscientious in its claims payment practices," Commissioner Oxendine said. "After our initial reviews in 1999 and 2000, I gave Humana ample time to make necessary changes in its procedures before initiating new examinations. Now we’ve started a new round of examinations on all managed care plans, and if we don’t find significant improvements, more fines will be forthcoming. The bottom line is we expect all insurers to expedite the payment process."

The purpose of the reviews is to ensure that managed care plans are paying claims within 15 working days, or notifying the provider or policyholder why a claim can’t be paid, as Georgia law requires. In August 1999, Oxendine issued a directive to all healthcare plans licensed in Georgia that his office would begin examining claims data every quarter, beginning with the quarter ending September 30, 1999. Since then no HMO reviewed to date has been in 100 percent compliance with the law. HMOs and other healthcare plans have been repeatedly warned by Commissioner Oxendine that nothing less than strict compliance with the law is expected.

A number of HMOs, including Humana, were fined following initial examinations in 2000 and 2001.

At the time Commissioner Oxendine fined Humana $15,039. The fine announced today is the first based on new reviews. Consumers having difficulty with their HMO or with any insurer should contact Commissioner Oxendine’s Consumer Services Division at 404-656-2070 or 1-800-656-2298 from 8 a.m. to 7 p.m., Monday through Friday, or they may visit the Web site at the above address to obtain a complaint form and instructions for submitting it.

Source: State of Georgia

Springfield, IL - Illinois Director of Insurance Nat Shapo is urging Illinois consumers to review and evaluate their insurance coverage during Get Smart Week, January 14-18, 2002. Get Smart Week is a national consumer education program being sponsored by the National Association of Insurance Commissioners (NAIC) in conjunction with state insurance departments across the country.

According to a recent NAIC survey, 67 percent of Americans believe they have about the right amount of insurance coverage, but only 28 percent say they understand the details of the coverage "very well."

"During Get Smart Week, we are urging consumers to recognize that when it comes to insurance, knowledge is their best policy," Shapo says. "Consumers should begin by reviewing their insurance coverage and evaluating whether they have adequate protection for their families and their property. If questions arise during this process, our Department stands as a resource to help."

Illinois residents can contact the Department's Consumer Assistance Hotline toll-free at 866-445-5364 or visit the Department's website at www.state.il.us/ins/consumerinfo.htm for information on a variety of insurance topics or to take an interactive quiz to test their "insurance smarts." During Get Smart Week, the NAIC will also operate a toll-free hotline at 1-866-SMARTWEEK (1-866-762-7893) and offer information on its website at www.naic.org.

Other survey findings

To gauge Americans' understanding and perceptions of their insurance coverage, the NAIC commissioned national research company OCR International to conduct a telephone survey of 1,021 adults. Respondents were asked a range of questions based on the various types of insurance coverage they may have, including life, home, auto, health, personal liability, disability, and others.

For example, when asked about annual reviews of insurance policies, the vast majority (83 percent) believe it is a good idea. Shapo concurs, adding: "Regular insurance check-ups are important to a person's financial health at all stages of life. Events such as marriage, divorce, birth or death, the purchase of a new car or home, a child going off to college, or even retirement, as well as changes in insurance products and services, can trigger adjustments in a family's insurance needs."

And, Shapo notes, policy changes don't necessarily translate to higher premiums. "An insurance check-up may alert the agent to the policyholder's eligibility for discounts that will actually lower overall costs."

The survey also found that for 90 percent of respondents in all age groups, a primary benefit of having insurance is peace of mind. However, not all are convinced their coverage is adequate. Overall, the survey found perceptions of coverage adequacy are linked to a household's financial resources. Thirty-two percent of households with less than $15,000 annual income believe they have too little coverage. That figure drops to 16 percent in households with incomes of $50,000 or more.

At the same time, the survey found most Americans don't take advantage of the services offered by their states' insurance departments. Only half of adults were aware of a specific insurance department in their states - and only 14 percent had ever contacted the department for help.

"Although insurance provides peace of mind for many Americans, they don't always know where to turn for unbiased information," Shapo says. "That's where we come in. While we can't recommend specific companies or products, we can answer questions and provide assistance when consumers have problems." How consumers can "get smart"

In addition to contacting the Department of Insurance, Shapo says consumers can take several other steps to get smart about their insurance coverage:

• Do your homework. Determine the kind of coverage you need. The Department of Insurance offers a variety of information on health, life, auto, home, and other insurance coverage that can help in making purchase decisions.
• Shop around for identical products and services. Not every company charges the same rate. The Department's website offers premium comparisons for auto, homeowners and Medicare supplement insurance.
• Schedule a routine "check-up" with your insurance providers at least once a year.
• Look for ways to lower your costs: e.g., by increasing deductibles or qualifying for discounts.
• Remember: an insurance policy is a legal document. Read it carefully.

"Get Smart Week is the perfect opportunity for the Department of Insurance to connect with consumers and make them aware of our services," Shapo adds. "Whether they need an explanation of how a particular type of coverage works, have questions about their rights as policyholders, or want to file a formal complaint about an insurance problem, we are here to help them get smart about insurance."

Source: Illinois

(St. Paul) - Commerce Commissioner Jim Bernstein announces the following appointments to the Minnesota Comprehensive Health Association board. Each new member will begin their term on February 1, 2002 and serve until January 31, 2006. The board governs the activities of the Minnesota Comprehensive Health Association which provides basic health insurance coverage to Minnesota residents unable to obtain coverage through the standard market. The board consists of nine members, four of which are public members. Two of the public members must also be current policyholders.

Re-appointed, public member/current policy holder: Carol Mollner, St. Paul

New Appointments - public member/current policy holder: Sharon Behrens, Bloomington

New Appointments - public member: Roger Boughton, Austin / Peter Schmitz, Nerstrand

Source: State of Minnesota

Superintendent of Insurance Gregory V. Serio today announced that a former New York Police Department administrative aide, Belinda Lovander, plead guilty Tuesday to using a police computer to operate a multimillion-dollar insurance scam.

At a hearing in Queens Supreme Court, Lovander admitted to filing 22 phony accident reports that allowed the ring to put in for $900,000 in fake medical bills and a potential $3 million in bogus liability. Lovander, 30, said she fabricated the reports from her computer terminal at the 113th Precinct station house in Jamaica.

She pleaded guilty to enterprise-corruption charges and is facing a sentencing of two to six years in jail. In December of last year, Lovander was one of 112 charged in a massive undercover automobile insurance fraud investigation by the Department, Queens District Attorney’s Office, New York City Police Department and New York State Police Department.

The investigation resulted in the indictment of nineteen individuals and four corporations in connection with the operation of a multi-million dollar automobile insurance fraud ring in the New York metropolitan area. Seven of the individuals and one of the corporations indicted were charged under the State’s Organized Crime Control Act with operating one of the largest no-fault insurance fraud rings ever uncovered in New York. In addition to Lovander, three medical doctors, two medical clinics, two chiropractors, a physical therapist, an acupuncturist, and two lawyers were charged. Ninety-three others were charged in separate criminal complaints with being participants in the scheme.

Source: State of New York

COLUMBUS -Director Lee Covington announced today that the Ohio Department of Insurance will approve certain limited exclusions - beginning immediately - for acts of terrorism, and will provide a procedure for property and casualty insurers writing commercial lines insurance products to use to expedite the filing and timely review of these limited exclusions.

"Because the U.S. Senate has not yet passed terrorism insurance legislation, we have been placed in the position of having to approve these limited exclusions in order to protect the solvency of insurance companies," Director Covington said. "As important, this will ensure the continued availability of commercial coverages other than terrorism."

Instead of allowing the very broad exclusions of coverage for acts of terrorism filed by some companies, the Department intends to grant approval to exclusions developed by the Insurance Services Office, Inc. (ISO). "Companies that have already filed must amend their filings and use the ISO terrorism exclusion language," Director Covington said.

In recognition of the seriousness of the situation, ISO has indicated it will permit the use of its copyrighted language by any insurer, including any that are not current licensees of the ISO for policy forms. Insurers that are current licensees of ISO for policy forms can use the new language pursuant to their current ISO agreements and approval by the Ohio Department of Insurance of its forms. Properly affiliated ISO insurers who have given ISO the authorization to file on their behalf need to take no further action.

Insurers can refer to the Property and Casualty section of the Department`s website at www.ohioinsurance.gov to obtain an expedited filing application, and/or call 614-644-2635 with questions.

"Chairman Michael Oxley (R-Ohio) has provided tremendous leadership on this issue by developing and passing terrorism insurance legislation in the House, and I urge the Senate to act on this issue as soon as possible to bring stability back to the market," Director Covington said.

The Ohio Department of Insurance is committed to providing the highest level of service to the citizens of Ohio by fulfilling its mission of consumer protection through financial solvency, market conduct regulation, and consumer education.

Source: State of Ohio

January 18, 2002

The nation's iron workers have enhanced workplace safety protections as a result of the Occupational Safety and Health Administration's new steel erection standard, which goes into effect today.

"This standard focuses on the most dangerous hazards in the industry and the hazards posed by evolving work practices and new technologies," said OSHA Administrator John L. Henshaw. "This emphasis will help prevent many of the 2,300 unnecessary injuries and 35 fatalities that occur in this industry every year."

This rule is the first OSHA safety standard developed under the Negotiated Rulemaking Act of 1990 and the Department of Labor's negotiated rulemaking policy. Developed in conjunction with industry and union groups, the new rule is expected to save employers nearly $40 million a year.

The new standard improves protection to iron workers by placing special emphasis on the most serious hazards in the steel erection industry. These include hazards associated with working under loads; hoisting, landing and placing decking; column stability; double connections; landing and placing steel joists, and falls to lower levels.

Although the new steel erection requirements are now in effect, OSHA will not conduct general schedule inspections for 60 days, until March 19, 2002. During this period, the agency will emphasize outreach and education to assist the industry in training employees on the new requirements.

Source: Occupational Safety and Health Administration