Assistant state insurance chief will lead fraud probe

February 04, 1992|By Ross Hetrick

Joseph T. Kelly, assistant state insurance commissioner and a former state police officer, has been named to head a new panel to investigate the issue of insurance fraud in Maryland.

The new group, called the Governor's Panel on Insurance Fraud, is starting its work a few months after a similar investigation of insurance problems in the state by another gubernatorial commission.

Although the previous group made recommendations that became law, Mr. Kelly said more needs to be done.

The new panel will have 20 to 24 members and will include doctors, lawyers, insurance executives, financial consultants, marketing experts, investigators, consumer advocates and assistant attorneys general, Mr. Kelly said.

It will operate in conjunction with the Governor's Executive Advisory Council, a group of volunteer professionals that advises Gov. William Donald Schaefer.

The selection of the panel is expected to be completed by the middle of the month, and the group should finish its work in eight months to a year, Mr. Kelly said.

The earlier panel, called the Governor's Commission on Insurance, recommended last year that the General Assembly require insurance companies to create fraud programs and report incidents of fraud to law enforcement authorities.

The law passed, but some legislators were critical that the commission had not supported a state bureau to investigate insurance fraud.

Mr. Kelly said the new committee is not being created because of dissatisfaction with the previous commission, but rather to build on its work.

"They didn't have the time and wherewithal to get into it," he said. "We're taking it a step beyond."

The new panel will look at the creation of a fraud bureau and other changes in state law, Mr. Kelly said. "The law that was passed last year was a make-do law," he said.

One of the first objectives of the panel will be to determine how pervasive insurance fraud is in the state.

According to estimates by the Federal Trade Commission, Mr. Kelly said, insurance fraud nationwide costs the life and health insurance industry $10 billion a year and property and casualty insurers $17 billion a year. But there are no estimates for Maryland, he said.

Members of the committee will be volunteers, and Mr. Kelly does not expect to spend money on consultant reports, as the previous commission did.

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