Committee approves bill requiring insurers and related parties to report suspected fraud

The Corporations, Elections & Political Subdivisions Committee voted to pass a bill requiring persons in the business of insurance to report suspected insurance fraud to the Wyoming Department of Insurance and to cooperate with investigations.

The measure, presented by legislative staffer Josh Anderson, defines insurance fraud largely using language drawn from national guidance and requires reporting "in the manner prescribed by rule" within 60 days. Anderson told the committee the bill includes cooperation requirements and immunity from civil liability for reporters acting "in the absence of malice."

Marion Smith of the National Insurance Crime Bureau told the committee "Wyoming is the only state in the country that lacks either mandatory fraud reporting or an insurance fraud unit," and urged broad immunity for investigators and partner organizations. Kent Prose, NICB supervisory special agent, described interstate VIN‑swapping schemes and how coordinated reporting helps prosecution.

Lawmakers debated competing statutory language drawn from Idaho, Kansas and Wisconsin. After a failed attempt to adopt Idaho’s immunity language, the committee voted to replace the bill’s model fraud definition with the Kansas statutory wording. The committee then passed the bill as amended on a roll call.

The bill tasks the department with rulemaking to implement reporting mechanics and clarifies that cooperation with investigations is required. Committee discussion stressed tailoring definitions to Wyoming’s enforcement resources; the Department of Insurance said it prefers not to institute a separate formal rule process to create reporting access and would use existing reporting software where appropriate.

The committee recorded the passage of the bill and indicated the sponsor and the Department will work out technical rule details during the interim.