Senate hears SB 6,031 to expand insurance-fraud definitions and investigative authority
Summary
SB 6,031 would broaden the definition of insurance fraud, elevate it to a class B felony for certain acts, expand the Insurance Commissioner's investigative authorities and update reporting duties; the Office of the Insurance Commissioner and multiple industry and anti-fraud organizations testified in support.
Committee staff briefed SB 6,031, which would modernize Washington’s insurance-fraud statutes and the Office of the Insurance Commissioner’s (OIC) ability to detect and pursue fraud schemes that harm insurers and consumers.
Staff said the bill expands the definition of insurance fraud to include acts related to medical, automobile and property services, premium-finance abuses, appraisal-clause manipulation and other schemes; it would specify that insurance-fraud violations (as described) may be charged as a class B felony, clarify charging and restitution mechanisms, expand the scope of the Insurance Fraud program and broaden mandatory reporting duties to include additional entities such as certified public accountants and public-safety agencies. The bill would also permit the commissioner to employ specialists, contract for services and acquire technology to support complex investigations; a fiscal note had been requested but not yet posted.
Senator John Lubbock, the prime sponsor, said technology-driven fraud has increased and harms consumers by raising premiums. Insurance Commissioner Patty Kuderer and OIC staff said the bill strengthens the Criminal Investigations Unit (CIU) without expanding general regulatory authority or granting peace-officer powers; she emphasized coordination with prosecutors and stakeholders and said the bill is intended to be a model for other states.
Supporters testifying included the Coalition Against Insurance Fraud, the National Insurance Crime Bureau, the Washington Society of CPAs (which said an amendment would remove CPAs from coverage), and insurers’ trade groups. Panelists urged the committee to modernize definitions, add investigative resources and ensure the OIC has authority to share and acquire information needed for complex, technology-enabled fraud investigations.
No final committee vote was recorded during the hearing; the committee concluded public testimony and moved to executive session to consider other bills later in the agenda.
