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Hawaii bill would expand insurance fraud unit

The Hawaii senate has passed a bill that would expand the state's insurance fraud unit to include all types of insurance, not just auto insurance as under current law.

The bill grants the state's anti-fraud unit authority to investigate potential fraud in all lines of insurance except for workers comp.

"Rather than limit administrative, civil and criminal penalties for insurance fraud to only motor vehicle insurance, Hawaii's insurance fraud law should be expanded to include all lines of insurance," a draft of the law says.

The bill says expanded insurance fraud investigations will "deter perpetrators of insurance fraud by demonstrating that no line of insurance is a safe haven for those who commit insurance fraud."

According to the draft legislation, which must be reconciled with the state house of representatives before being sent to the governor, insurance fraud costs families in Hawaii an average of $500 annually.

Insurance fraud also increasingly affects health insurance costs, which the legislature said costs approximately $36 billion nationwide each year.

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