New Anti-Fraud Language Required in Washington Forms
January, 2007
The Insurance Fraud Act, passed by the 2006 Washington legislature, established an insurance fraud program within the office of the Insurance Commissioner. The Act has reporting and other requirements for companies doing business in Washington. In addition, the Act provides as follows:
NEW SECTION. Sec. 10. No later than six months after the effective date of this section, or when the insurer has used all its existing paper application and claim forms which were in its possession on the effective date of this section, whichever is later, all applications for insurance, and all claim forms regardless of the form of transmission provided and required by an insurer or required by law as condition of payment of a claim, must contain a statement, permanently affixed to the application or claim form, that clearly states in substance the following:
"It is a crime to knowingly provide false, incomplete, or misleading information to an insurance company for the purpose of defrauding the company. Penalties include imprisonment, fines, and denial of insurance benefits."
The lack of a statement required in this section does not constitute a defense in any criminal prosecution nor any civil action.
Although the Act took effect July 1, 2006, this provision (codified at RCW 48.135.080) does not become effective until January 1, 2007, or until an insurer's current (as of July 1, 2006) supply of paper applications and claim forms runs out, whichever is later.
It was emphasized at a recent Rates and Forms Seminar presented by the WOIC that the anti-fraud language would be required in applications and forms filed after January 1, 2007. Several carriers asked if their existing language would suffice. The uniform response was that if the existing language did not contain the last sentence of the quoted language β noting the possible assessment of penalties, including imprisonment, fine and denial of insurance benefits β the language would not be deemed "substantially" equivalent to the prescribed language.