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It was interesting to read a letter that I would guess the Insurance Federation wrote which is being mailed out by agencies to push their agenda. An example is :



Letter to the Editor:

Last week, one of those rare moments of bipartisanship shone through at the Minnesota Capitol. The issue? A problem that affects nearly every Minnesota family – insurance fraud. This form of theft costs the average Minnesota family $1400 per year in higher premiums. Minnesota is one of the worst offending states for these illegal activities. Schemes involving fraudulent therapies, concocted auto accidents, exaggerated damage from storms and prescription drug abuse add up and cost us dearly.

Thankfully, a coalition of insurers, legislators and prosecutors have stepped up to take a stand. Empowering our insurance regulators and prosecutors to take a more aggressive stand on financial crimes should be applauded. And while it may not be the most headline-grabbing issue in an election year, this is solid work that will benefit Minnesotans. We hope their efforts result in a new enforcement mechanism for Minnesota’s county attorneys, to make Minnesota a less desirable place to commit theft crimes that hurt Minnesota families.



The problem is that the numbers don’t add up:

The original quote came from Hubert Humphrey III of  1,000/family/year fraud that HHH used in his Senate race against Dave Durenberger. It seemed to be at most a  misspeak and he meant overall and not per year , and really it was an attempt to over emphasize what he had done as Attorney General since the quote was focused on a problem he had solved in the job. The quote really doesn’t hold up at 1000/year.

According too the census, in 2003 there were 2.0 million households in Minnesota. 66% of those are families.

So that would be 1,320,000 families. So at $1000 a year that would mean $1,320,000,000 in fraud. It looks like the total premiums in Minnesota for 2004 Accident and Health was 99,092,981.

That would put the deficit for Ins companies at 1,221,000,000/year. That would be a bad business to be in. It really doesn’t add up. Even if he did mean overall, it still seems outlandish.

They have now increased the fraud number by 50%  and apparently since 2004 , or by their numbers at lease 10,000,000,000 in loses,  the industry seems to still be doing ok.

Now fraud is bad and I would agree with anything that can be done to successfully combat it. However, I see my clients as real people who have been hurt and need help, which is different from the way plaintiffs are typically portrayed. The Federation’s  agenda wasn’t about that issue. They don’t want to talk about  wrongful cut offs or defense doctors who will say anything for money.

This whole issue is a way to fight true reform and help for Minnesota Consumers.  It is to bad the agencies are being used in this manner.

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Of Interest