Secretary of State Ruth Johnson's anti-fraud task force issues

recommendations
SEPTEMBER 17, 2014
Secretary of State, Michigan State Police, prosecutors,
state officials and industry leaders outline 17 proposals
to fight auto insurance scams, protect drivers
LANSING, Mich. A task force launched by Secretary of State Ruth Johnson to fight auto insurance
scams today released its recommendations, which include proposals to streamline prosecution of
offenders, assist law enforcement in verifying insurance during traffic stops and crack down on
unlicensed insurance agents.
Johnson, along with her partners in the effort, formally received the recommendations and
commended the work of theFAIR (Fighting Auto Insurance Rip-offs) Task Force.
These proposals are the tools needed to help stop criminals who are preying on unsuspecting
Michigan drivers and help reduce the number of uninsured drivers on the road something we all
pay for, said Johnson. One of the biggest benefits of this effort is that were seeing more
cooperation, more communication than ever before on a problem that must be addressed. Ive been
honored to fight for Michigan drivers and will continue to do everything I can to make sure that
criminals cant take advantage of them.
The Task Force included representatives from the Secretary of States Office, the Michigan State
Police, the Michigan Department of Insurance and Financial Services, insurance industry leaders
and prosecutors.
Fraudulent insurance documents are used to deceive not only police officers, but also court clerks,
Department of State personnel, insurance carriers, and in some cases citizens who purchase what
they believe to be legitimate insurance policies, said MSP Director Col. Kriste Kibbey Etue. We
appreciate the dialog and information sharing that was started as a result of this task force and we
look forward to continuing to work with the Department of State and the insurance industry to reduce
auto insurance fraud in our state.

Recommendations range from administrative changes to potential legislative solutions and
strengthening partnerships. They include:
Intra-agency sharing of data, improved communication.
Additional fraud detection training for police and Secretary of State staff.
Improved technology for data analysis and tracking.
Johnson announced the creation of the independent panel last year after supporting a change in
law, which required all insurance companies to send electronic insurance verification to her office
twice a month, helped expose a significant amount of invalid insurance.
A one-day snapshot in July 2013 found more than 16 percent of insurance certificates presented that
day were invalid or fraudulent. The issue was not an urban one, with fakes and forgeries turning up
in more than half of Michigans 83 counties.
But the number of fraudulent or invalid certificates dropped by more than half in the latest sampling.
Johnson credited more staff training, tough new policies on cancelling plates and a public awareness
campaign for discouraging some fraudulent activity. According to Johnson, criminals have been
surprisingly sophisticated in selling fake auto insurance, setting up fake websites and even bogus
help desks where agents pretend to verify insurance policies. Some are large-scale operations:
Johnsons office shut down one auto dealer in southeast Michigan which was selling fake
certificates.
In 2013, a Michigan woman who sold more than 300 fake auto insurance policies to drivers
was charged with several felonies after being identified by Johnsons staff.
Earlier this year, a woman was charged with selling fake policies out of a church-owned
building in southeast Michigan. Police said she was making at least $30,000 a month selling
fake car insurance.
Johnson said its clear some drivers knowingly purchase bad insurance but others purchase
fraudulent policies and believe they are covered until they are in an accident and file a claim. She
said every honest Michigan motorist, required by law to carry no-fault insurance, has to pay the
costs of having uninsured motorists on the road.
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For media questions, please call Gisgie Dvila Gendreau at 517-373-2520.

Customers may call the Department of State Information Center
to speak to a customer-service representative at 888-SOS-MICH (767-6424).

Editors Note: The FAIR Task Force Report is available online.