Committee reviews bill to expand insurance‑fraud definitions and investigative powers
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Summary
HB 2394 would broaden the definition of insurance fraud to add acts such as false billing and improper coding, raise certain offenses to a Class B felony, and expand restitution and investigative authorities at the Office of the Insurance Commissioner; the OIC and industry stakeholders largely supported the substitute while clarifying limits on regulatory authority.
The Consumer Protection and Business Committee heard a staff briefing and stakeholder testimony Jan. 27 on House Bill 2394 and an offered substitute (HDash3207.1) that revises the crime and programmatic definition of insurance fraud and adjusts the Commissioner's authorities.
Committee staff Peter Clodfelter said the substitute corrects a scrivener’s error, narrows or clarifies certain duties (for example, removing certified public accountants from a disclosure requirement in the substitute), and adds acts to the crime of insurance fraud—such as submitting a bill or claim for services not rendered, using an inappropriate health‑care coding system code, or misrepresenting the scope of damages on property claims. The substitute also raises certain insurance‑fraud offenses to a Class B felony and extends prosecutorial discovery timelines in some cases.
Representative Roger Goodman (45th LD), prime sponsor and chair of the Community Safety Committee, described the bill as an agency request from the Insurance Commissioner to address increasingly organized, technology‑driven schemes and to allow the office’s criminal investigations unit to assemble cases and share evidence with prosecutorial partners. Dori Nikpond of the Office of the Insurance Commissioner emphasized that the bill recognizes consumers as potential victims and provides additional investigative tools while stating it “does not enlarge or expand the regulatory authority” of the OIC.
Industry groups such as the Northwest Insurance Council and the National Insurance Crime Bureau testified in favor, saying expanded tools will help detect and prosecute organized schemes and reduce costs borne by consumers. Witnesses noted the legislation clarifies the OIC’s criminal investigative role without supplanting its regulatory functions.
The committee did not take executive action on HB 2394 during this meeting; staff and stakeholders signaled willingness to refine technical language in the substitute.