Anti-Fraud Laws Slow Claim Frequency
Wednesday, December 15th, 1999 Fraud Legislation & RegulationThe special emphasis states have placed on fraud prevention, characterized by the enactment of anti-fraud statutes in workers' compensation, has helped to slow the growth trend in claim frequency and costs, according to the National Council on Compensation Insurance, based in Boca Raton, Fla. The study, "Deterring Insurance Fraud: Implications for Workers Compensation System Costs," found statistical evidence that, without the passage of such statutes, system costs would have been 18.5 percent greater in 1997, while claim frequencies would have been 10.4 percent greater and average claim costs 7.3 percent greater. The analysis was based on data from NCCI Financial Calls from 1980 through 1997 in 35 NCCI states and the District of Columbia. System costs were divided into case frequencies and average claim costs or severity.
