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Commissioner Rothman keynote speaker at Minnesota Insurance Fraud Summit

October 15, 2012

For Immediate Release

Large and pervasive problem costing Minnesota rate payers

SAINT PAUL, MN – The Coalition Against Insurance Fraud estimates that fraud costs insurance carriers and consumers $80 billion a year.  That averages out to about $950 per family in the United States. On October 16, Commissioner Mike Rothman will address this problem as the keynote speaker at the Minnesota Insurance Fraud Summit. 

The Insurance Fraud Summit is an event organized by the National Insurance Crime Bureau and the Insurance Federation of Minnesota.  The purpose of the summit is to identify the scope of insurance fraud in Minnesota as well as identify potential solutions.  Nearly 200 representatives of the insurance industry, law enforcement leaders, and other stakeholders are expected to attend.

“Insurance fraud is a crime that impacts nearly all Minnesota families,” said Commissioner Mike Rothman. “This summit is an excellent opportunity for Minnesota to focus on this large and pervasive problem. We know partnerships are critical, and our department looks forward to working alongside the law enforcement community and the insurance industry.”

The Minnesota Department of Commerce, Division of Fraud Prevention was created by the State Legislature and signed into law in 2004. The Insurance Fraud Division currently has eight licensed police detectives with extensive experience investigating white-collar fraud cases in law enforcement. 

The Division of Fraud Prevention responsibilities include:

  • Reviewing reports of insurance fraud submitted by authorized insurers, their employees and/or agents;
  • Responding to complaints of suspected insurance fraud generated by other law enforcement agencies, or any other person;
  • Initiating inquiries when the division has reason to believe that insurance fraud has been or is being committed;
  • Referring alleged insurance fraud to appropriate law enforcement agencies including county attorneys, the U.S. Attorney's Office or any other regulatory agency for criminal prosecution; and
  • Assembling evidence, preparing charges or otherwise assisting any law enforcement authority having jurisdiction over a case.
What is insurance fraud?

Insurance fraud occurs when people deceive an insurance company or agent to collect money to which they are not entitled.  There are two types of insurance fraud, internal and external.

Internal Fraud occurs when the fraud is perpetrated against the insurance company or its policyholders by insurance agents, managers, executives or other insurance employees. Examples include:

  • Issuing fake insurance policies, certificates, insurance identification cards or binders;
  • Making false statements in filings with the Minnesota Department of Commerce
  • Pocketing premiums then issuing phony policies or failing to issue any policy at all
External Fraud schemes are orchestrated against insurance companies by individuals or entities such as policyholders, medical providers, beneficiaries, vendors, chiropractors and career criminals. Examples include:
  • Arson for profit - An owner of a property, or someone hired by an owner, deliberately burns a business, home or vehicle to collect insurance money;
  • Falsifying theft reports - A property owner falsely reports that items were stolen or exaggerates the value of items taken in a burglary so they can collect insurance money;
  • Medical mills - Unethical medical providers working in concert with patients to create fictitious, accident-related work injuries for the purposes of filing fraudulent disability, workers' compensation and personal-injury claims;
  • Property fraud - An owner buys multiple policies on the same property or vehicle then purposely damages or destroys the property or vehicle and collects insurance money from all the policies;
  • Workers' compensation fraud - Business owners operating with inadequate or no workers' compensation insurance; or employees collecting benefits on phony work-related injury claims.

Minnesotans that suspect someone is committing insurance fraud are encouraged to call the Fraud Tip Line at 1-888-FRAUD MN (1-888-372-8366) or visit the Insurance Fraud Division webpage. Complaints can also be sent by mail to Minnesota Department of Commerce, 85 7th Place East, Suite 500, Saint Paul, MN 55101, or by email to

Mike Rothman, Commerce Commissioner

Minnesota Insurance Fraud Summit

Tuesday, October 16
8:30 a.m.

Minneapolis Airport Marriot
2020 American Boulevard East
Minneapolis, MN 55425